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Earl Howe moved Amendment No. 3:
The noble Earl said: This amendment addresses a matter which I raised at Second Reading and relates to the way in which the Bill deals with the cost of treating those people killed or injured as a result of an accident where the driver is uninsured or untraceable. It is a matter which causes me considerable concern. As the law stands at present, the NHS cannot reclaim any charges for hospital treatment where that treatment arises from a traffic accident in which the driver responsible is uninsured or cannot be traced. Claims for compensation, however, can be made by the injured party and, where such a claim is agreed, the Motor Insurers' Bureau meets it. The MIB is in essence a pooled fund resourced and maintained by the insurance industry. The fund is money top-sliced from the premiums of policies taken out by law-abiding motorists. As far as I know, no one would argue against the principle that there should be such a safety net for compensation claims. It is entirely equitable that the MIB should exist for this purpose because if it did not there would be nothing to take its place and many injured parties would be denied compensation altogether through no fault of their own.
Under the Bill it is proposed that for the first time NHS hospital charges as well as compensation should be recoverable from the MIB. My request to the
I frankly do not see why it should be the law-abiding motorist. For many years motorists who are properly insured have been required to pay extra in their insurance premiums to cover potential claims against themselves for the cost of NHS hospital treatment, and that has happened despite the fact that they are already paying for the NHS through general taxation. It is a long-established principle and we accept it. But now the Government are saying that those same individuals should also start shouldering the sins of other people; that is to say, the cost of hospital treatment arising from road accidents caused by drivers who are uninsured. I believe that is a step too far.
Quite apart from the issue of principle, there is a practical aspect to the question as well. Premiums on motor insurance policies will increase anyway as a result of the Bill but they will go up even more because of the Government's wish to tax law-abiding drivers to pay for the hospital treatment of those who are uninsured. Approximately 10 per cent. of the motorist's car insurance premium already goes to the MIB. It is estimated that as a result of the Bill the MIB levy will need to increase by £12 million to £15 million; in other words, a significant slice of the £6 to £9 increase in average premiums predicted by the ABI. But the position is even more serious than that because all the predictions are that car insurance premiums will rise by at least 10 to 15 per cent. this year anyway, and some by as much as 30 per cent. If that happens we are likely to see even more uninsured motorists because inevitably some of them will not be able to afford these higher premiums, and that, in turn, will lead to the law-abiding motorist having to pay yet more.
The most relevant question I can put to the Minister is the one that I put at Second Reading. What action are the Government going to take to tackle the problem of uninsured and untaxed drivers? The cost to the Treasury of these drivers is around £170 million a year and that figure does not represent the cost to the country as a whole. A crackdown on this problem really would yield worthwhile sums of money. In fact it could well raise more than is likely to flow to the NHS as a result of the provisions in the Bill.
The NHS is funded from general taxation to provide healthcare to those who need it free at the point of delivery. The only exceptions to that rule up to now have been prescription charges and the requirement for motorists to insure themselves against potential claims on themselves for the cost of NHS hospital treatment. I really do not believe it is right to add to the burden shouldered by the law-abiding motorist by asking him
Lord Hunt of Kings Heath: The Motor Insurers' Bureau exists to ensure that those unfortunate enough to be injured in a car accident involving a driver who either has no insurance or cannot be traced can still receive compensation for the injuries they have suffered. The bureau is funded by levies paid by motor insurers and, as far as concerns the accident victim, acts in the same way as any other insurance company would. That means that the bureau not only pays compensation in the same way as other insurers but also that in cases where the accident victim has also received state benefits as a result of the accident, the bureau is responsible for the repayment of those state benefits to the Department of Social Security.
That principle is well established and, in the inclusion of the bureau in the recovery of benefits legislation, was proposed by the previous government and accepted by Parliament at that time. All we are seeking to do is to bring the situation of benefit and NHS charge recovery into line. Not only is it accepted that the bureau repays state benefit but where the accident victim has opted for care in the private sector the bureau will meet those costs too. Our intention is that the NHS should also be able to recover its costs where appropriate.
The noble Earl, Lord Howe, referred to the cost to others of drivers who are uninsured. I understand from the Association of British Insurers that in 1996 the bureau met claims for compensation in cases where drivers were uninsured to a total cost of around £111 million. That is clearly a substantial sum, but we have to put that sum in context because the total amount paid out in compensation against motor insurance policies was £5.1 billion. I think your Lordships will appreciate that including the MIB within our scheme could not cause much distortion when set against sums such as that. It is also worth pointing out that the estimate we have made of the amount the NHS will receive as a result of this measure would raise the average premium by between 2 and 3 per cent. or approximately £6 to £9.
The noble Earl, Lord Howe, asked about the Government's intention with regard to tackling uninsured motorists. That is an important issue but I believe it is one that should be tackled through the appropriate channels. The police can require evidence of insurance cover at any time and a driver who is caught without adequate cover faces a maximum fine of £5,000, plus automatic endorsement of his licence and the possibility of disqualification. I understand that the Association of British Insurers is in talks with the Department of the Environment, Transport and the Regions about the possibility of an insurance database linked directly to vehicle registration at the DVLA. It is through such measures that we should approach the problem of uninsured drivers. On that basis, I invite the noble Earl to withdraw the amendment.
Earl Howe: I am grateful to the Minister and I shall reflect carefully on what he has said. I am not sure that
I shall read carefully what the noble Lord has said and reserve the right to bring the matter back at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe moved Amendment No. 4:
The noble Earl said: The Road Traffic Act 1988 provides for certain classes of vehicle to be exempt from the requirement to be insured. In the main these are Crown vehicles, including those belonging to local authorities and the Armed Forces. There are over 1 million such vehicles, although some are conventionally insured in spite of the exemption that is given to them. These vehicles are not, as I understand it, caught by the Bill as currently drafted. I gather that that is because it would be inefficient for funds to be transferred within government.
There are two points to be made. First, intra- governmental transfers occur frequently, including in respect of benefit recovery by the CRU, which is in direct parallel to the provision in the Bill. Secondly, the NHS is being deprived of funds that have presumably been included in the Government's calculations.
The grounds for levying this charge at all--namely, that motorists should bear the cost of damages arising from their behaviour--applies with equal force to Crown vehicles. Therefore I cannot see any ethical justification for the Bill not to catch Crown vehicles as well. I beg to move.
Page 1, line 22, leave out from ("Part") to end of line 24.
4 p.m.
Page 1, line 24, at end insert (", or
(e) a payment made in respect of an accident caused by a vehicle which is not required to be insured by virtue of section 144(2) of the Road Traffic Act 1988,").
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