Examination of Witnesses (Questions 260-296)
Q260 Chair: Good
morning, Minister, and welcome to our Transport Select Committee.
I think this is the first time you have been here.
Mike Penning: It
is. It is an honour and a privilege.
Q261 Chair: I
want to congratulate you on your position. I apologise for keeping
you waiting so long, but you might not be surprised to hear that
is to do with the interest generated by the topic of this inquiry.
I hope that you are going to help us to provide some of the answers
to some of the questions that have been raised in the previous
sessions.
Mike Penning: I
hope so.
Q262 Chair: We
have heard a great deal of evidence about the high cost of motor
insurance, particularly for young people. We have heard a number
of points put to us on the reason for this increase. Could you
tell us what actions, if any, the Government is proposing to deal
with this problem? I am aware that today you are taking action
on implementing continuous enforcement insurance, which we do
welcome. Our previous Committee in fact did call for this so we
are pleased to see this happen, but could you give us any information
on what else the Government might be considering in this whole
area?
Mike Penning: By
all means I would love to and of course I would love to explain
perhaps a little bit better than some people have realised what
continuous insurance means and the importance of it. But at the
same time it's not my job to defend the insurance companies, even
though we are working very closely with them, and we need to work
very closely with them to defend their premiums. It is a competitive
market out there. But there are some real issues to do with the
cost of insurance and why it is so expensive. One of the reasons
of course is that there are in excess of 1 million people, we
think, driving without insurance on a regular basis. I say "we
think" because we pick up a huge amount with the police and
other measures, but we do not really know exactly how many vehicles
are registered with DVLA but are off the road but not SORN. In
other words, they are not registered off road. Of course, the
other percentage is those that are driving.
The evidence we pick up from the police and other
local authorities as to the amount of people that are driving
without insurance indicates that it is probably in excess of one
million. The legislation orders were laid today, which is why
I wanted desperately to lay them today so that I could come before
the Committee first and explain what was laid. The continuous
insurance legislation was laid today and will come into force,
I believe, in April. That will mean that, if you have a vehicle
registered with DVLA, that will have to be insured, at least third
party, unless you have registered it off road. If DVLA are told
by the insurers that it is not insured, that will trigger a letter
initially from the MIB. If you have been on holiday or if you
are in hospital or something like that, you are not immediately
going to get a summons and a problem. You will get a letter from
them saying, "Your vehicle is registered with DVLA but it
is indicated to us that you are not insured." It is then
up to the owner of that vehicle, or the registered owner of that
vehicle because it is on the register of ownership, to come forward
to DVLA and either to insure, which we will know about usually
within seven days once they have insured, at the minimum, or to
register it off road.
I think that will make one of the most dramatic changes
in motor insurance in this country that we have probably seen
since insurance was brought in. It is a huge culture shock. It
is a move on which we are going to have to work very closely and
do a lot of advertising and marketing to make sure people understand
what we are doing. But it is fundamentally unfair that motorists
are being penalised by those who are not going to be insured in
cost and in injury terms, because the figures for those that are
involved in accidents and other crimes who are not insured is
very high.
Q263 Chair: I
am sure the Committee would join me in welcoming your action,
but the evidence that we have had suggests that uninsured driving
adds about £30 to the average premium.
Mike Penning: Yes,
it does.
Q264 Chair: That
suggests that, while it is something that is certainly very important
for financial as well as other very serious reasons, it is not
the main driver of escalating premiums. Is there any other action
you have in mind to deal with that?
Mike Penning: There
is fraud and there is the cost of personal injury, which represents,
I am sure you have heard already, 30% of all claims now. I am
sure you have had the lawyers and others in explaining that. Of
course, people need to be looked after and compensated should
the injury not be their fault. But the sheer culture we have in
the UK at the moment, which we seem to have inherited from America,
is really quite frightening. That is where the huge burden is.
I can't legislate on that and nor can the Justice Department,
but we must try and make sure that we cut down enormously on fraud,
which also adds round about a similar figure, I understand, to
the premium.
The next thing we are looking at is unintentional
and intentional fraud. When you take a quotation, whether it be
online or you go into a broker and give them the information and
they give you a quote, sadly, sometimes unintentionally, people
are giving information which is fraudulent, which means the claim
will not be met should you have an accident.
As a parent I can talk about this. When I say "unintentionally",
parents want the best for their children, especially once they
have passed their test, so they tend to register them on their
insurance, not as an additional driver, not as a named driver,
but where very often that young person is actually the main driver.
When insurers find this out, of course, they will disclaim the
claim and they are technically uninsured. That is fraud whether
they like it or not and that has a huge effect.
The other effect is where people give, either wittingly
or unwittingly, false information perhaps about their age or the
points that they have on their licence. One of the things we are
going to do—and we are going to announce this quite soon—is
to work with the insurers so that we can give them, from DVLA,
the relevant information they need so that they can make decisions
on whether or not they wish to insure and how much that premium
should be. So, for instance, on a quotation, I hope quite soon,
there will be, literally, a tick box asking that person who is
asking for the quotation whether or not they are willing for that
insurer to contact the DVLA to verify what they have said about
their points, their age or their driving experience. If they say
no then that is entirely up to them, but I would think the insurers
would be slightly unlikely to insure that person if they are not
willing to get that proof.
Q265 Chair: Could
you tell us when that will happen?
Mike Penning: We
are working on this now. This is new, whereas some of this work
was being done before. I don't see there are particular problems
with it to do with data protection—we have got to check
that out—because this is a willing admission of the person
asking for the quotation to allow that information to come from
DVLA. I think certainly within six months we should be there and
we can do that.
That will also completely open up, then, the whole
area to the insurers being confident about the information they
are being given. I hope then that will have an effect on premiums
as well. At the moment there is an effect on premiums because
the insurers are assuming in some cases that people are not giving
the right information, intentionally and unintentionally.
Q266 Iain Stewart: You
have mentioned the claims culture that seems to be creeping in
from America and you have made reference to the fact that 30%
of the increase in cost is due to factoring in the personal injury
claims. Does the Department have any evidence of the increased
claims that are made which are genuine and it is just better access
to justice and those which are fraudulent in some way?
Mike Penning: No.
I have asked for that information. It is very difficult to
get that information simply because of the way the legal system
operates in this country in that you are innocent until proven
guilty and you have the right to claim. It is slightly different,
for instance, from the German system where the Germans have, as
you are probably aware, introduced a system on whiplash of minimum
speed, so if you are less than a certain speed you cannot claim
whiplash injuries in Germany. That, I understand from the legal
advice that I have had, would not be able to be brought into
this country because of the way that the judicial system works
differently to the federal system in Germany. But it is one of
the golden nuggets we would love to have as to the amount.
All we can say, as I alluded to at the start, is
that the huge increase in personal injury claims now represent—and
the insurers I am sure will agree—50% of the costs that
they pay out. For me it was a shock when I read it, when I first
realised that.
Q267 Julian Sturdy: Listening
to what you have said already, Minister, do you think that the
insurance industry needs to do even more to tackle fraud and how
would you react to suggestions that are being put forward regarding
the insurance industry working with the police force and maybe
part funding or funding a dedicated team to tackle fraud in the
longer run?
Mike Penning: This
is something I am very interested in and, of course, it is cross-departmental
so it comes in to the Justice Department as well as the Home Office.
For instance, in DVLA we already have embedded police working
with us on fraud. When I visited DVLA—and I was the first
Minister ever to visit the DVLA, which I thought was astonishing
considering how big an employer it is and how important an institution
it is— what shocked me was the sheer scale of the fraud
that we are detecting coming through just in fraudulent applications
for driving licences, for instance, and things like that. But
we do need to work closely. This needs to be joined-up Government
together. It is something I will talk to the insurers about.
A lot of the money to do with the cost of continuous
insurance, for instance, the marketing, is being paid for by the
insurers because of this difficult climate we are in at the moment.
I just did not have the budget to do what I would like to have
done, but they are helping enormously. I think this is something
we can work on and I have already had provisional conversations
with my equivalent Ministers in the other two Departments and
I am sure it is something we can work on.
Q268 Kelvin Hopkins: The
figure of more than 1 million uninsured is astonishing. It just
shows that the regime until now has been wholly inadequate and
I welcome very much that the Government is doing something about
it. That means that 1,500 drivers in every one of our constituencies
are not insured. There is some evidence that quite a high proportion
of these are high risk accident prone drivers, so they are more
likely to have accidents than the properly insured and legal.
Taking those people off the road, if they can't afford insurance
or they are not prepared to pay insurance, would make a major
difference to road safety.
One thought I have raised with other people before
is that the AA claims that, before the age of 18, 10% of young
people have been in a crash where somebody has been killed or
seriously injured, which is astonishing. To me, it is a very compelling
argument for raising the driving age from 17 to 18, to the age
of majority. Politically I think it would be quite popular with
a lot of people, except for the 17 year olds who want to drive.
Isn't that a feasible policy?
Mike Penning: There
is part of me as a parent that says, "No, please." My
daughters are now 19 and 21 and both of them drive. The sheer
thrill of the freedom that they had as very good drivers when
they passed their test is something I personally don't want to
take away from young people. I think we can wrap our little ones
in cotton wool too much.
However, there is a lot of work that we need to do
with not just that age group but the age group of 17 to 25, boys
in particular, which, frankly, is one of the reasons why premiums
are so high. I am very lucky: I have two daughters. But I understand
from my insurer that it would have been three or four times more
expensive if they had been boys driving the little Clio that they
did. We are working an awful lot now with predriving courses
for the 14 to 16 year olds, to get them more aware at school as
to the sort of pressures they are going to be under and the sort
of skills they are going to need long before they start taking
their driving tests.
I think we should change the driving test in the
right way, to make it more difficult and more suitable for the
skills they are going to need once they pass the test. My fear
when I first took on this job, when I looked at it, was that the
test had been designed for someone to pass rather than to give
them the skills to be safe on the road for them and others. I
think the work that the Driving Standards Agency have been doing
recently to change that has really helped. For instance, we will
no longer let them know exactly the route that will be taken;
they will have to navigate their own route. They may get lost
and that doesn't matter but it's how you react when you have done
something wrong when you drive that is very, very important.
One area I am looking at is the situation for drivers
post test, as to whether or not there are skills that we can encourage
them to gain that the insurers will actually see as a safety benefit,
so thus the premium is held down. Pass Plus test has not really
worked in that way; I think it's a shame but it hasn't. Also,
we are looking at giving them skills in areas, even before the
test is taken, for instance, on motorways. We have a situation
where a young person or anybody passes their test and for the
first time in their life will go and drive on their own on a motorway.
I find that very difficult. I am working now to see whether we
can get qualified instructors—I stress "qualified"
instructors because a lot of instructors are unqualified that
take people out on lessons—being able to do some more advanced
work so that we can limit the dangers that we have with young
people in particular.
Q269 Kelvin Hopkins: I
have just one separate question about named driver insurance.
It is a problem in all sorts of ways. Would it not be simpler
to legislate that everyone had to have individual insurance and
we got rid of the named driver approach to insurance so that the
young drivers had to insure individually?
Mike Penning: To
be fair, that is a lot easier said than done. Some insurance policies
still have "any named driver". We still have company
policies as well as family policies and things like that. If you
look at the advertising on TV at the moment, a lot of the companies
are moving in and realising there is a market here for having
named drivers with separate no claims on a single family policy.
That is a trend and that is something that is difficult to legislate
against, but it is a very complicated piece of legislation. If
you said that every single driver must have a separate policy
to drive, I think that would be very difficult, hugely burdensome
and expensive on business, which at this particular moment we
probably wouldn't want to do.
Q270 Gavin Shuker: We
have taken a lot of conflicting evidence about what has driven
this increase in premiums, but the one thing that is clear is
that every witness pretty much has said that the cost of premiums
has increased significantly, and significantly within the last
12 months as well. Do you believe that it represents a failure
of the market?
Chair: Do you think there
is a failure of the market?
Mike Penning: No, I don't. The insurers would have
to work together for that failure. If there is evidence of that,
then I am sure there are plenty of organisations that would investigate
that, and there doesn't seem to be any evidence of that. The insurers
would love to just insure you after 10 years of driving with no
accidents, and that premium would be very low. But, actually,
they have to, and quite rightly. Not all insurers do insure everybody.
The situation is risk, I think.
As the Road Safety Minister as well as the Roads
Minister, I have to make sure that we are doing everything we
possibly can to make drivers and their companions in a car as
safe as possible, which is why, as I say, we have done a lot of
work to do with the driving test. We are going to do a review
of the MOT, but not based on the fact that Europe says you can
have four years and then two, but based on looking at whether
or not the MOT is actually producing the safety requirements we
need, especially for vehicles with high mileage, for instance.
It seems ludicrous to me that you can go for three years and have
half a million miles on the car before it has an MOT. That is
the sort of thing that we are looking at, rather than just saying,
"Let's jump to Europe's tune", which I tend not to do—those
of you that know me—and say that we go from four to two,
which I know the industry is concerned about. But let's look,
as I have said for the driving test, at whether the MOT is
fit for the 21st century and fit for purpose.
Going back to your original point, "Is it a
failure of the market?", no, I don't think it is a failure
of the market. I think there are pressures that are continuing
which we have already alluded to, to do with uninsured drivers,
to do with personal injury claims, and to do with the sheer cost
at times of the replacement of the vehicle. When I bought my first
Mark 1 Cortina, I think the insurance was three times what the
car cost. It is a completely different kettle of fish, frankly,
to the car that, for instance, my grandfather left to my daughter,
which was a little Punto and she said, "Dad, I'm not going
to drive it. It hasn't got an air bag." Granddad would have
been very upset but, of course, he did not know about that.
The cost of vehicles and the cost of cars is much
more expensive as well. But I do accept it is very, very difficult
for people, especially on low incomes and young people, to insure.
That is something we have to work on but, actually, we have to
make sure they insure. That is the crucial thing we must do.
Q271 Gavin Shuker: Would
you accept that there is a failure of the market maybe at the
margins? For example, you cited the example of young drivers.
We have taken evidence that, on average, they are paying up to
about £2,400 a year just for insurance when obviously they
will need that to get to work or to get around. Would you accept
there is a serious problem there?
Mike Penning: No,
I don't. The reason I don't is because a young male driver between
17 and 25 is a huge risk for the insurers. We know that and I
know it because I used to go to more RTAs when I was a fireman
and cut these young people out of cars. It is a crazy situation,
for instance, where the most at risk occupation that you can do
if you are a lady is to sit in the passenger seat of a car being
driven by a boy of 17 to 25. You are more likely to be injured
doing that than anything else. We have to address it.
It's not drink. The interesting thing is there was
a terrible crash over the Christmas period. You might have seen
it in the newspapers. I think three young boys lost their lives.
There was no drink or drugs involved, but adrenalin and an oak
tree. That, in all our constituencies, we see on a regular basis
and I used to see, sadly, as a fireman. We have to do something
about that. It is not just about age, the bottom end of the age
profile, because this goes into the mid-20s and on and through.
It is a cultural thing that we have to address. There is the peer
pressure. There are a lot of conversations to do with whether
or not, for instance, you should prevent a newly qualified driver
having the car full of people. They have rights too. It is difficult.
Q272 Gavin Shuker: Finally,
have you looked at any radical solutions to this problem? Obviously,
we have taken a lot of evidence but I would not like to say the
picture has become a whole load clearer. Have you looked to other
countries, for example, where the car is insured? Obviously,
my colleague in Luton North talked about insuring the driver.
Are there ways of bringing more drivers in but also looking at
a radical restructuring?
Mike Penning: We
have looked at other countries. Literally as I was walking over
here I was having a conversation about this. For instance, we
go to America on holiday, or we did especially when the kids were
younger and hired a car. There was the cost of hiring a car and
then the insurance. The insurance was often more expensive than
hiring the car in these package deals. So we have looked at other
countries.
We are quite unique with our judicial system in the
way it works in this country, but what we have introduced today,
going back to what I was saying, is probably one of the most radical
changes in motor insurance this country has seen since we introduced
insurance. It will make a massive difference. It will expose an
awful lot more people that are driving completely illegally, putting
young people, old people, everybody at risk, and putting a burden
on premiums.
Q273 Chair: Is
what you have done today the only thing you are going to do?
Mike Penning: No,
because I think the next stage, which I said we will deal with
certainly within the next six months, will be giving access, with
permission, to drivers' details to insurers. That will make a
massive difference as well, but we will continue to work with
the skills that people need to drive and the road conditions.
Actually, there is work that can be done to make roads much safer
with very, very minimal costs. The new retroreflective paint that
we use on white paint on roads these days is completely different
to what it was 20 years ago when I was first a fireman. It absorbs
the light and then throws it back out again. There is a lot of
work that we need to do across the spectrum to reduce the accidents.
If we reduce the accidents, then the premiums will go down as
well.
Q274 Julie Hilling: Can
I come back a little bit to the young driver? Many years ago we
reduced the size of motorbike engines for new drivers. Are you
prepared to consider or are you thinking about anything that is
not just about insurance but also about road safety for young
drivers?
Mike Penning: Yes.
Q275 Julie Hilling: Restricting
the hours, restricting the number of passengers, restricting the
engine capacity and the speed of the vehicle. Are you looking
at those sorts of areas?
Mike Penning: I
am always willing to look at everything. One of my jobs is to
pull everything in and to look at it. If we look particularly
at motorcycles, those that are old enough will remember that we
used to be able to ride a scooter at 16 and there was the restrictive
cc. That was a lot to do with the skill of riding the bike rather
than the speed as well because of the sheer weight of the bike.
We have been, sadly, not as successful as we would like to be,
I am sure, with deaths and serious injuries on motorcycles. Even
today it is the only area that is on the increase. There is around
a 4% increase in deaths or serious injuries on motorcycles, even
with a 50% reduction in sales of motorcycles in the last year,
going year on year.
Touching on the cc or normally looking at the brake
horsepower of a car, there is no evidence that restricting the
brake horsepower will reduce the accidents. Interestingly enough,
if you look at the three cars which are most commonly used—and
this is no slight on the manufacturers—which is the Saxo,
the Clio and the Corsa, all have round about or less than 1000
cc engines. They are the ones, sadly, that on a regular basis
go up the oak trees.
Q276 Julie Hilling: What
about speed limiting?
Mike Penning: Speed
limiters we were looking at. It is very, very difficult to enforce.
Speed limiters on lorries is now done electronically. It is difficult.
If one person gets out of the car, are they allowed to have a
speed limiter on it? What if your mum gets in the car or your
dad gets in the car? It is hard, rather than penalising the majority
for the minority, which is what the insurance industry are doing
because they are penalising on premium because of the amount of
accidents that young people have.
I have a very open mind about this, which is
why we pushed through this legislation that we have laid today
so early. If you saw my email box this morning, it is not
enormously popular in certain parts of the country. Probably a
lot of those people that are uninsured perhaps have been filling
my mailbox this morning. We are determined to clamp down on this,
not just for the premium but on the road safety point of view
as well.
Q277 Julie Hilling: The
other thing is that we have taken a lot of evidence about the
number of people that get money out of an insurance claim. A person
has an accident today and they are a commodity that is sold on
through various people and everybody is getting a share of it.
Is that something that you are looking at considering, so it is
not just about the referral fee but it is also about who can have
a chunk of somebody's accident?
Mike Penning: To
be fair, that is not my Department; it is the Justice Department.
Q278 Chair: Are
you having any discussions about that?
Mike Penning: Yes,
we are. We are talking about it. From a personal point of view
I find it abhorrent. They are ambulance chasers. We are going
to end up with a situation like they have in America if we are
not careful literally where these people are going to be turning
up at RTAs, or RTCs, if we want to be politically correct these
days, and saying, "Will you sign this form because I will
represent you?" You have only got to listen to the commercial
radio stations. Every day, all day, all you hear is, "If
you've had an accident, we'll get some money for you."
Q279 Chair: What
are you proposing to do about it?
Mike Penning: That
is a Justice thing. It is the Justice Department.
Q280 Chair: Are
you in discussion with the Justice Department?
Mike Penning: Yes,
but we are at very early stages, madam Chair.
Q281 Chair: Can
you give us any idea of the form of the discussions?
Mike Penning: I
can't at the moment, no, because they are the lead. I am just
there to help them implement.
Q282 Chair: What
are you recommending they do?
Mike Penning: I
am not recommending anything to them.
Q283 Chair: But
you must have a view on it. You have told us about the problem.
You clearly appreciate the scale of the problem.
Mike Penning: Yes.
Q284 Chair: But
what are you actually going to do about it?
Mike Penning: Madam,
I am not legally trained.
Q285 Chair: As
a Transport Minister involved in this area, surely you are going
to put an opinion to the Justice Department?
Mike Penning: Of
course and my opinion is that it is out of control. It is out
of control and it is getting worse. This is penalising innocent
people. As I said earlier on, while I want people to get fair
compensation, it is getting to a stage at the moment where it
is penalising other people in their premiums in particular, and
we have to do something about it. But that is something that is
way above my pay grade and in a Justice Department area, which
I am loth to tread on. I might have my toes clipped.
Q286 Paul Maynard: We
have clearly heard throughout our inquiry that premiums have increased.
You have been quite clear already that you do not believe it to
be an example of market failure. Do you believe it is the Government's
role that they should take specific measures that will lead to
premiums being reduced or do you believe that you should be taking
measures that are justifiable on grounds of road safety or legality
that may lead to lower premiums? Should it be specific Government
policy to try to lower premiums?
Mike Penning: No,
I don't think it is. I think that is the market's job. It is a
very competitive market out there. As I said earlier on, if there
is any evidence of collusion going on within the companies, then
that is something that I am sure the relevant bodies would look
at. But it is my job to enable people to enjoy the roads in this
particular section of my portfolio as safely as possible for themselves
and for others. There are measures we are taking now which I feel
will hopefully lower premiums, but I am not necessarily doing
it for that specific reason. I am doing it predominantly for road
safety and justice reasons.
Q287 Chair: Do
you think the insurance industry could do more to prevent fraud?
Mike Penning: Yes,
I do. But, to be fair to them, when I first met them and I made
that very point, they said, "Minister, will you help us?"
They had had some blockages in the system. There was no reason
that I could see why the DVLA could not have been giving them
the information to do with applicant driver details years ago.
There is, as I say, intentional and unintentional fraud active
out there. There is also intentional fraud when it comes to conspired
accidents as well as injuries which are faked, if you wish. That
is harder, but, in regard to making sure people give the right
information when they take out a policy out, the insurers will
put their hands up. If you have given wrong information, they
will disclaim you. They will not let you claim.
Q288 Chair: Do
you have any plans to do anything specific in relation
to the insurance industry in detecting fraud? You said they asked
you to help them.
Mike Penning: Apart
from what I have already alluded to, we are giving them access
to the information.
Q289 Chair: Yes,
apart from the measures that you told us about.
Mike Penning: They
have not actually come to me and asked for other help apart from
that. I am not aware of them asking for anything else.
Pauline Morgan:
There are no other initiatives specifically on fraud.
Mike Penning: I
think they can do something for us, because at the moment if someone
claims and they say, "No, this is a fraudulent claim",
or, "You weren't actually properly insured", or whatever
the figure maybe, especially a fraudulent claim, it tends to stop
there. It doesn't get referred on to the police and it certainly
doesn't get referred on to the DVLA. I think it should. I think
the public need to see people being prosecuted for these offences,
for two reasons. One is for justice and the second is to prevent
others thinking they can get away with it. At the moment there
doesn't seem to be a huge amount of prosecutions. I don't know
if you have got figures, but I have not seen hardly any prosecutions
for people making fraudulent claims against insurers where that
is a criminal offence.
Q290 Chair: We
did receive evidence today that the police are reluctant to prosecute
in a lot of cases where people are very concerned that fraud has
taken place. Would you feel it is appropriate for you to discuss
that with the Home Office?
Mike Penning: I
spoke to the Minister in the Home Office last night about this,
because I told him I was giving evidence today and I wanted to
make sure that we were talking about the right things. If that
is the case, then that is something we can work on with the Home
Office but at the same time I would have thought that the insurance
companies would want to bring civil actions.
Q291 Chair: I
am just repeating to you the evidence that we have heard. We have
also had a proposal there should be a dedicated unit within the
police funded by the insurance companies dedicated to rooting
out insurance fraud.
Mike Penning: That
is something that has been pointed out to me literally in the
last couple of days that we will look at.
Q292 Chair: Is
that something you are looking at?
Mike Penning: Yes,
literally only in the last couple of days.
Q293 Iain Stewart: Just
briefly, one area of fraud that we have discussed with previous
witnesses is the increasing prevalence of staged accidents. From
your departmental perspective, do you have data on that and do
you have any specific measures you are looking at to try and combat
it?
Mike Penning: It
is very difficult. The enforcement of that sort of thing doesn't
come under my Department of course; it comes under the Home Office
and the police. There is more anecdotal rather than specific evidence.
The only evidence we tend to have is when the insurers disclaim;
in other words they video someone or they do something. That happens
throughout the insurance industry as a whole. I don't have evidence
within the Department and it is not within my portfolio.
Q294 Julie Hilling: We
have had quite a lot of evidence that there is real organised
crime going on in terms of motor insurance and fraud within it.
I suppose I want to push you a little bit more to ask what the
Department is going to do in terms of that, because they are saying
that that is pushing up the cost of insurance but it also makes
our roads a lot less safe and is a real issue.
Mike Penning: Yes,
of course. Interestingly enough, there is evidence that it is
very regionalised and it is moving. You can pick any part of the
country, although I won't today, but there are parts of the country
where it has been prevalent for a while and it is now starting
to move across. As I was alluding to a moment ago, it is not within
my portfolio to take action on that. That is a Home Office and
police matter. However, holding one of the largest databases in
the country, we should be able to keep that data and help other
agencies with what they are doing, but it is not under my portfolio.
I am not shifting the buck. It is a police matter and a justice
matter.
Q295 Chair: Should
the penalty for uninsured driving be increased?
Mike Penning: It
is already very high. It is already £5,000. The problem we
have, if I can just touch on it because I think it is a very important
issue, is that the courts tend not to give out anywhere near the
maximum and then they do give quite a long time to pay, quite
often longer than it would have been if you had taken out an insurance
policy and paid it over staged payments. That is an issue that
I am taking up with the Justice Department.
I am sure the police have said this to you, but the
biggest way of making sure that someone who has been driving an
uninsured vehicle doesn't drive that vehicle again is to have
it seized, and the police do about 400 a day, I think, at the
moment. That is the biggest deterrent by far. If they think they
are going to lose that car, they will stand more chance of either
not driving or insuring it. I know what it was like for me when
I got my first car all those years ago. It was my pride and joy.
The thought of losing that and the possibility of that being crushed,
to me, and the evidence is, is that that is one of the biggest
deterrents. But it is hugely time-consuming for the police as
well. What we are doing with the introduction of the legislation
later is going to remove a whole part, we think, of those people
that the police have picked up or would be picking up for no insurance.
Hopefully we will get more to the hard core.
Q296 Chair: On
a number of areas which we have touched, the responsibility for
making decisions is not necessarily with you. It may be the Home
Office or it may be the Justice Department. Is there any mechanism
you have set up so that you can have ongoing discussions with
those Departments and, indeed, any other relevant Departments
on making decisions to improve the situation?
Mike Penning: Since
the election and the new Government was formed, I noticed that
there was no one, for instance, heading up road safety. I am the
Road Safety Minister but so much, as you have heard today, is
outside my portfolio. I felt as if I was not in full control,
which is the best way to describe it. I have an agreement
with my equivalent Ministers in Justice, in local government and
in the Home Office. We have met and we have already started down
this area particularly, for instance, on Drugalyser, where as
the Minister I am responsible but it is the Home Office that do
the approval and will do the arresting. We are working very closely
on that and there are other meetings to do with the whole area
of road safety that we will have. So I have kind of pulled
it together. But it is difficult when it is more than one Department
in charge of the portfolio. I am not in control of my destiny
as much as I would like to be.
Chair: Thank you very
much for coming and answering our questions.
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