Motor Vehicles (Compulsory Insurance) Bill

I beg to move, That the Bill be now read the Third time.

I thank my right hon. Friend the Member for Hemel Hempstead (Sir Mike Penning) for giving the Queen’s consent. I thank all those who have supported the Bill, particularly those were selected for and attended the Bill Committee without whom it could not have progressed. I was thinking that to speed things up, I could just say, “This Bill is going to save the average motorist 50 quid a year and is one in the eye for the European Court of Justice”, but we probably need to do a bit more than that. The expressions of Opposition Members tell me that I better press on.

My Bill, which received Second Reading on 29 October last year and passed Committee stage on 5 January this year, deals with an issue that was considered in detail during a Westminster Hall debate entitled “Motor Insurance: Court Judgments” on 22 September 2021. That debate was led expertly by my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), who cannot be here today, but I thank her for all her continued support for the Bill.

As an aside, when we have presentation Bills, it is a very good idea, if there is not time in this Chamber for us to debate Second Reading for as long as we would like, to obtain a Westminster Hall debate so that we can get the issue discussed at length before coming to this Chamber. That is a very good example of what happened.

The Bill’s purpose is to remove the requirement for compulsory motor insurance for vehicles used exclusively on private land and for a wide range of vehicles not constructed for road use. People might say, “You don’t have to have motor insurance for vehicles used on private land or for vehicles that are not a motor vehicle.” They would be right that that is the interpretation of the Road Traffic Act 1998 that has stood since its inception. That interpretation was held to be correct by the Government, motor insurance and motorists alike, but then along came the ECJ and the Vnuk case.

In 2014, the ECJ made a decision that confounded the European Union and the British Government. The case of Vnuk extended the requirement for compulsory third-party motor insurance far beyond the scope of the Road Traffic Act. If the ruling is allowed to be enforced in our courts, it will put ordinary people in breach of the law for not having motor insurance for their vehicles used exclusively on private land. To give just a few examples, motor insurance will become compulsory for a golf cart that never leaves the golf course, a ride-on lawnmower that someone uses in their back garden and a tractor-trailer that is never designed to leave the farm. It would also extend compulsory motor insurance to machines that were never intended to be used on any road.

The Road Traffic Act 1988 requires that motor vehicles intended for use on roads and other public land must be insured. It does not require compulsory insurance for vehicles on private land, nor does it require compulsory insurance for vehicles not intended to be used on roads. The whole purpose of this Bill is to return the law of this land to that envisaged in the 1988 Act.

I congratulate my hon. Friend on getting so far with his Bill. I chair the all-party parliamentary historic vehicles group and meet many motorists and motoring organisations, including those connected with motorsport, and I have yet to hear a single objection to the measure he proposes. Is he aware how much widespread support he has?

I am very grateful to my right hon. Friend, who has been a staunch supporter of this Bill. To his point, there has been no objection; in fact, there has been tremendous support. I am afraid that in the whole process, the only person who has bowled a bouncer is him—but I will come to that later.

Can the hon. Gentleman clarify what would happen? We know that many accidents take place on farmland. Does public liability insurance apply? Could he confirm what would happen to somebody who was the victim of an awful accident on that farmland, for example?

The hon. Lady goes to the crux of the matter. That question was brought up in Committee by the right hon. Member for Warley (John Spellar), and I will discuss it in some detail later on; if I may, I will deal with it when I get to it.

This Bill will restore the interpretation to British statute that this sovereign Parliament always intended. Most importantly, it will end any associated liability for insurance claims against the Motor Insurers’ Bureau for the cost of accidents on private land when motor insurance was not held. Importantly, the Bill does not seek to invent new policy, nor, to the point the hon. Member for Cardiff North (Anna McMorrin) raised, would it limit the Government or Parliament in changing insurance regulations for motor vehicles in the future, if that is what Parliament decides to do.

How did we get into this mess? Under the European Union withdrawal agreement, the Vnuk decision has become retained EU case law. In other words, it is the law of the land unless we change it. We cannot just ignore it, because it is an EU Court decision and has now become the law of the land. Therefore, it is essential that we act to prevent this European Court of Justice decision from punishing motorists through higher premiums. At a time when the cost of living is at the forefront of all our minds, this is an opportunity to save ordinary people from an unnecessary burden.

I will explain further: if the status quo is allowed to continue, to account for its liability for accidents on private land, the Motor Insurers’ Bureau will have to increase its charging levy. That levy is paid by the motor insurers, which in turn will pass on the cost to the motorist.

That is all well and good, but how much will the extra cost be reflected in the average motorist’s insurance premium? The Government actuaries have got out their bean counters, pressed a few buttons on the computer and estimated the cost. By removing the Vnuk judgment, the average motorist will be saved from a £50 price hike to their insurance premiums. Let me say that again: the Government experts say the Bill will save the average motorist £50 each and every year.

My hon. Friend mentions that motorists might benefit from reduced insurance by getting rid of the clause. Will those of us who have just renewed our car insurance, including me, get some sort of discount as a result?

Nice try! It is important that the motor insurance industry knows that the Bill is making progress, so it has not put the £50 on. If we do not do it, that will happen. It is not that people will see their motor insurance go down by £50 per year, but that they will not see it go up by £50 a year. My hon. Friend can go ahead and renew his motor insurance.

I believe that I am correct in saying that, if passed, the Bill will be the first Act of Parliament to remove retained EU law. It will certainly be the first to remove retained EU case law, so it will be a landmark step in taking back control of our own laws. It is just one of the clear advantages of leaving the European Union that we can now alter our laws to ensure that they are interpreted the way that this sovereign Parliament intends.

The Bill will be the first of many post-Brexit dividends to be established in primary legislation. We will deliver the independence that the British people voted for and put pounds back into their pockets. In fact, it would not be a bad idea for the Government to have a Brexit Minister whose sole responsibility it was to root out such savings across the whole of Whitehall—and for that person to be a Brexiteer who had consistently supported that point of view, maybe even a Spartan, and clearly not someone who is a member of the current Government. Does that give the Minister any clues?

The Vnuk judgment has also led the European Union to revise its European directive, because it was as surprised by the decision as we were, although, as with many decisions taken at EU level, the interest of the ordinary motorist has been sacrificed in the name of greater harmonisation between states. The revisions it has made will fail to protect motorists in the EU from the associated costs of the compulsory insurance requirement on private land. Because of Brexit, this Parliament has the opportunity to do better, and that is just what we are doing with the Bill.

Will my hon. Friend give way?

I feel another bouncer coming.

I am trying to be helpful, actually. Although it is, as my hon. Friend says, not a debate for today, does he agree that there is a good case that if electric scooters are allowed on the public highway, they should be insured?

I think the law as it stands requires them to be compulsorily insured, even though they are not allowed on the road. That is a dilemma for the Government to sort out, but it is not, happily, for this debate.

I will move on to a second similar thing. I understand that there is a bespoke arrangement in place for electric bikes, whereby insurance is not compulsory. Although these bikes are used on public roads, they do not have to be compulsorily insured. It is also true that given how expensive the equipment is, many electric bike owners still opt to take out an insurance policy. It may be possible to look at expanding the arrangement to electric scooters, but again that will be a matter for Parliament to consider, and it is not relevant to what the Bill does. My right hon. Friend has brought it up, and it needs to be looked at by the Government.

Finally, clause 2(2) sets out the jurisdictions of the Bill. The provisions in the Bill extend and apply to England, Wales and Scotland only. The exclusion of Northern Ireland is consistent with the convention that Westminster will not normally legislate for matters that are within the legislative competency of any of the devolved Administrations. The Bill therefore does not legislate for Northern Ireland, as the matters to which the provisions of the Bill relate are within the legislative competency of the Northern Ireland Assembly. I understand, however, that the Northern Ireland Assembly is closely following the passage of this Bill, which will set an example that it might want to follow.

I am thrilled that leaving the European Union has given us this opportunity to deliver a clear Brexit dividend and to finally take back control of our laws. I hope this Bill will be the first of many over the course of this Government to deliver on our key post-Brexit objective.

I rise to support the Bill from my hon. Friend the Member for Wellingborough (Mr Bone). I thank him for such a detailed speech that made me fully understand exactly the content of the Bill.

I was reading up on this, and the ECJ ruling and the subsequent rulings that upheld the Vnuk ruling are simply impractical. The ECJ’s ruling was based on the Vnuk case of 2007, whereby the eponymous farm worker from Slovenia was injured because of being knocked off a ladder by a trailer that was attached to a reversing tractor. The incident occurred on private property, and compulsory motor insurance was already purchased to comply with Slovenian law. Mr Vnuk’s claim for damages against the insurance company that provided the tractor’s compulsory motor insurance policy was initially rejected by the Slovenian courts. However, the European Court of Justice, in its infinite wisdom, overturned the decision of the Slovenian courts, and ruled in favour of Mr Vnuk—quite unbelievable. Now that we are out of the European Union, as my hon. Friend mentioned many times in his speech, we can pass this important Bill, so that we will have a common-sense approach to motor insurance claims—indeed, a common-sense approach to much of everything, now that we have left the European Union.

The Vnuk case led to the extension of the 2009 EU motor insurance directive on compulsory motor insurance for vehicles used on private land. In addition, the definition of a motor vehicle, as defined in the Road Traffic Act 1988, was widened to include vehicles that were not adapted for use on the roads. Were it not for the introduction of the Bill, motor vehicles would now include agricultural machinery such as tractors, motorsports vehicles, and light electric vehicles, all of which are not commonly used on public roads. The European Court of Justice’s broad interpretation of the 2009 EU directive has led to excessive liabilities, and the implementation of the Vnuk decision would have had a hugely detrimental impact on insurance providers and motorists, as my hon. Friend clearly said.

The Government Actuary’s Department has analysed the financial impact of the Vnuk ruling, and the figures do not make good reading for insurance providers and motorists. Based on an increased frequency of claims due to an increased number of both legitimate and fraudulent claims relating to incidents on private land, the insurance industry would have faced costs in the region of £2 billion. Those costs would have been passed on to motorists who were facing an approximate additional cost of more than £1.2 billion. That would have translated into a £50 increase in insurance premiums for the average car user. At a time when motorists are feeling the pinch with rising prices at the pumps, the removal of the European Court of Justice ruling on the Vnuk case from British law by the Bill will be welcomed by my constituents. More than 64% of voters in Stourbridge voted leave, and this Bill will be welcomed by them as a prime example of the UK, and this Government, taking back control of our laws.

It is always a pleasure to follow my hon. Friend the Member for Stourbridge (Suzanne Webb), and I congratulate my hon. Friend the Member for Wellingborough (Mr Bone) on this excellent Bill. I have been in my place for only a couple of years, but in this House it sometimes feels as if the job of Parliament is to add to legislation, and it is also really important that we look at deregulation. When we see regulation that is costly and has no support from industry or consumers, and that does not work practically, it is very much the business of this House to root it out.

We have talked a bit about the Vnuk ruling and how it will apply to the EU 2009 motor insurance directive, which would extend compulsory insurance to vehicles on private land and possibly to vehicles not constructed for road use. My hon. Friend the hon. Member for Wellingborough mentioned golf buggies, tractors and ride-on mowers, but there is also a real possibility that it might affect mobility scooters.

I support the Bill because not only would that regulation add huge costs to motor insurance, but it is not wanted in this country and, practically, it does not work. We have heard about some of the costs; I agree with my hon. Friend the Member for Stourbridge that, at this time, adding a motor insurance hike of £2 billion—an average £50 rise for 25 million people—is not something we want to pursue. Although we may have different views across the House, and indeed across our party, on how to address the cost of living issue, we can all agree that it is a real issue this year and we do not want to add to that through unnecessary regulation.

The Department for Transport did run a consultation in 2016-17. There were 902 respondents, 94% of whom rejected the policy. That consultation was not just industry-based but included members of the public. When regulation is not wanted by industry or the consumer, we have to wonder why we feel we can impose that on the British people.