Review of Part 1

Automated and Electric Vehicles Bill – in a Public Bill Committee at 11:30 am on 16 November 2017.

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‘(1) By September 2019, the Secretary of State must lay a report before Parliament assessing the effectiveness of the system for defining and insuring automated vehicles introduced by Part 1 of this Act.

(2) The report must consider—

(a) the impact on the insurance industry,

(b) the impact on the cost of insurance premiums for automated vehicles,

(c) the impact on the uptake of automated vehicles, and

(d) the levels of disagreement between manufacturers and insurers on liability.’—

This new clause would require the Government to lay a report before Parliament assessing the effectiveness and impact of the system introduced in Part 1.

Brought up, and read the First time.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

I beg to move, That the clause be read a Second time.

The new clause, which stands in my name and that of my hon. Friend the Member for Lewisham, Deptford, is self-explanatory, so I will not talk at great length about it. We agree that in future automated vehicles have the potential to improve personal transport arrangements, as well as air quality—which is crucial, given the dire state of the environment and its impact on health—and to provide many other benefits mentioned by Committee members and witnesses during our evidence sessions.

The Bill could lead to a transport revolution. I know from debates in Committee and private discussions with the Minister and his officials that the Government are keen to ensure that that is the reality arising from the Bill. Answering the question of how automated vehicles can be insured, however, is essential. I welcome the Government setting out how to do that, but it is important to consider how the measures will work in practice and not just as legislation. It is also important for the Government to ensure that regulations work as intended, monitoring unexpected impacts—which there always are—before attitudes and practices become entrenched and before automated vehicles become common on our roads.

The list in the new clause is not exhaustive, but given the focus on part 1 of the Bill, it makes sense to review, report on and seriously consider not only the impacts listed but any disagreements about liability. I will not press for a vote on the new clause, but this will be a fast-moving area and primary legislation is not necessarily the way forward. We may well have to revisit this overall area as and when advances in the technology take place, and we will have to look at how they affect the way vehicles are insured.

It is important for the Minister to give an assurance today that he will keep Parliament informed about the effectiveness and impact of the legislation to ensure that we keep it as up to date as possible, given the new technologies in this area.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

The shadow Minister once again does credit to the Committee by insisting that these matters should be carefully considered not just now but as they develop. He is right that this is a developing technology, and the whole Committee recognises the Government’s attempt to do sufficient, but not too much—that is to say, sufficient to create the certainty that will allow the development of the insurance framework, but not so much that we constrain those developments. It is right, of course, that we continue to bring these matters to the attention of the House, which is essentially what the new clause would do. He argues rightly that we need to ensure that the purpose of the legislation is being fulfilled. It is as simple as that.

I risk repeating myself—I know that many rather enjoy the repetition of my arguments; I am not one of them—but I drew the Committee’s attention to the Small Business, Enterprise and Employment Act 2015, which specifically makes provision to review secondary legislation in which the requisite provisions are made. It confers that duty on Ministers. There is some advantage to be gained from that. None the less, I have made it clear during the course of our consideration that I am not in any way ill disposed to other means by which we can continue to consider these matters. It is important that we recognise that, in a rapidly changing field, further consideration may be efficacious. On that basis, I hope the hon. Member for Kingston upon Hull East will withdraw his new clause.

Talking of sufficiency, I do not feel that that is quite sufficient an argument. I want to talk a little bit about how we envisage the system working, which might offer further reassurance to the hon. Gentleman and other Committee members. The international standards by which these vehicles will be approved for safe sale and use are still being considered, as I said previously, by the United Nations Economic Commission for Europe, in which the UK plays a leading role. Those standards will form the basis of the type approval process. That means that nothing will be sold or used on our roads that does not meet those standards, and it is vital that standards are agreed internationally, for obvious reasons: the nature of the automotive industry and of the vehicles’ use means that it must be done in that way.

The Government take the view that it is not appropriate at this early stage to set criteria that are too precise or to constrain the identification process until we know what those standards are. We certainly need to maintain sufficient flexibility to ensure that all vehicles relevant to the clause can quickly be identified and included on the list that the Secretary of State is missioned to draw up in clause 1.

Photo of John Hayes John Hayes Minister of State (Department for Transport)

I see my right hon. Friend indicating that he wants to intervene. I know that whatever he says will add value to our consideration, so I happily give way.

Photo of Oliver Letwin Oliver Letwin Conservative, West Dorset

Can my right hon. Friend confirm that, as he says in the first of the three letters he has helpfully written to the Committee, it will be high on the Government’s agenda that the type approval process will be used as the means for ensuring the cyber-security of the vehicles, in addition to their safety? Can he also confirm that he is confident that the international negotiations will result in a type approval system that covers security as well as safety?

Photo of John Hayes John Hayes Minister of State (Department for Transport)

Yes. That was debated at some length when we last met. My right hon. Friend is right that because of the character of the software we use to make these vehicles work, data and cyber-security become ever more significant. My letter addresses this, as he helpfully reminded the Committee, but I can confirm that the discussions we are having have at their heart all the considerations to which he has drawn the Committee’s attention.

We will continue to engage with the Driver and Vehicle Licensing Agency and other stakeholders to ensure that the system works effectively once in place. In addition, we have produced a detailed impact assessment that looks at potential direct economic impacts on the insurance industry. Hon. Members will remember that we rehearsed the effect that this will have on insurance premiums and the industry as a whole in oral evidence. The industry is already preparing for those effects, because it knows that the shape and character of the insurance industry will alter as a result of all this. Indeed, one of the UK’s major insurers has stated that it expects insurance premiums to become cheaper because automated vehicles will be safer. That view was echoed by the Bank of England, which reported in March this year that the safety benefits from automated vehicles could see insurance premiums become more than 20% cheaper by 2040.

As part of this regulatory programme, we will continue to work with the industry to ensure that, as the new insurance framework is implemented, we still meet our intended policy objectives. I therefore hope I have made it clear that we entirely agree with the hon. Member for Kingston upon Hull East that these matters need to be considered now and in the future, and I have no doubt that there will be a need for the House to be involved in that process. With those assurances, I hope the hon. Gentleman might see fit to withdraw the new clause.

Photo of Karl Turner Karl Turner Shadow Minister (Transport)

I beg to ask leave to withdraw the clause.

Clause, by leave, withdrawn.

New Clause 12