Young Drivers: Government Support

Tuesday 20th February 2024 Westminster Hall

16:30

[Carla Lockhart (Upper Bann) (DUP)]

I beg to move,

That this House has considered Government support for young drivers.

As ever, it is a pleasure to serve under your chairmanship, Mrs Latham. It is encouraging to see Members here to participate in this debate, which is of significance to many young people across the United Kingdom. It is good that young people can look to this House and see and hear that their voices are being heard. I thank the Minister in anticipation of his response, as well as his officials, who have been very helpful in this regard.

I am raising this issue following a significant number of messages on social media and WhatsApp, and conversations generally with young people and their parents across Upper Bann. We can all remember the excitement we felt at the prospect of turning 17 and finally getting on to the road to drive. Maybe, like me, other Members flicked through Auto Trader from about the age of 15, dreaming of their first car, probably unaware of the unaffordability of that choice. But we are all allowed to dream.

Those were the days of buying a Vauxhall Corsa, Ford Ka, Peugeot 106 or Citroën Saxo—the list goes on—when 17-year-olds could avail themselves of free insurance as part of a deal, or be a named driver, which helped with the premium. That incentive was a game changer for many. I am probably showing my age with my vehicle choice, but what a distant memory that feels, given that young drivers are now facing insurance premiums that are not helping them to get on the road, but are actually driving them off it.

Although I will labour the insurance element today, I am also acutely aware of the difficulties that young people face in even reaching the stage of getting out on the road, particularly with our broken test facilities, the lack of resources and manpower, the lack of appointments and the volume of young people who have to wait literally months before they even get to sit their tests.

[Helen Morgan (North Shropshire) (LD)]

We have seen rural driving test centres close, such as the one in Whitchurch in my constituency. That causes a huge problem for young people, because they have to drive much further to access a test centre, to practise for and take their tests. They have to book double lessons, adding to the cost of learning to drive. They need to get in a car; there is no public transport. Does the hon. Lady agree that keeping rural test centres open is important to helping young people access jobs and opportunities around the countryside?

[Carla Lockhart]

Absolutely. We experience the same difficulties in Northern Ireland with the availability of testing. We find that people are ready for their test but no tests are available, and they then have to continue with lessons, or stop lessons and go back to them later. It is a dreadful situation. This is about ensuring manpower and resources are available in rural areas, as the hon. Member outlined.

What has prompted so many people to get in touch with me is specifically the exorbitant cost of insurance, particularly in the context of the cost of living crisis, where household budgets are already strained. Where once the bank of mum and dad stepped in, many parents just cannot do that to help to meet the cost of insurance. That leaves young people unable to benefit from the freedom that driving brings, which many of us enjoyed. That barrier to the road impedes access to employment, socialising, broadening their life experience and even travelling to study. The effect is particularly acute in rural areas, such as my constituency and, indeed, vast swathes of Northern Ireland, where public transport linkages are lacking in choice and frequency. Evening and weekend services are often reduced or withdrawn altogether, making the ability to travel via public transport non-existent.

The importance of driving and access to a vehicle is acute in these areas for the whole community, including our young people. I have no doubt that Members present from similar constituencies across the United Kingdom will reflect the same challenges faced by their constituents. In that context, we must look to the Government to support young drivers—to support them to get on to the road and to be safe on the road—which, in turn, will impact insurance premiums in the future.

These issues are interlinked. If we look at insurance costs, Confused.com—the price comparison firm—said that, on average, 17 to 20-year-olds had seen insurance rise by more than £1,000 compared with the same time last year.

[Mr Gregory Campbell (East Londonderry) (DUP)]

I congratulate my hon. Friend on securing the debate. On insurance premiums, does she agree that it is important that not only we, but insurance companies make a significant distinction between young drivers who are careful—who take their time and learn to drive safely on the road—and those whom they punish? They punish not just those careless drivers with the higher premiums, but all young drivers, and that needs changing.

[Carla Lockhart]

My hon. Friend is pre-empting my speech, and I agree with everything he said. For 17-year-olds, premiums surged by an average £1,423, to £2,877. For 18-year-old drivers, the average policy price reached £3,162. Constituents have contacted me after having had quotes of between £5,000 and £7,000 for a vehicle worth half the price.

Since securing this debate, I have had positive discussions with the Association of British Insurers and local insurance brokers across Upper Bann, who are at the mercy of insurance companies across the United Kingdom. I thank Alastair Ross from ABI for his constructive engagement on this matter. The insurance industry cites a range of factors for the increase in premium costs, and it is worth highlighting those to enable us to explore how Government might help on this matter.

By way of background, insurance is based on pricing the risk of claims being made and the cost of those claims. ABI data shows that, for drivers aged 18 to 20 and 86 to 90, the frequency of claims and average cost of claims is higher, which can impact premiums for those age groups.

One of the largest elements that the pool of motor insurance premiums pays for is bodily injury to other drivers, passengers, pedestrians or the driver themselves. That is because serious collisions can mean life-changing injuries, with compensation sometimes running into millions of pounds.

The insurance industry states that young drivers are also more likely to be involved in crashes with multiple injuries and which involve a greater number of people. Insurers’ costs of dealing with associated claims can be very high. The industry view appears to be supported by data, so we are not coming to this debate without data, because we know that according to the statistics, young people, and particularly older people, are much more likely to be involved in an accident.

This is supported by statistics from the Department for Infrastructure and the Northern Ireland Statistics and Research Agency, which show that young drivers are over-represented in Northern Ireland’s collision statistics. In 2021, 17 to 23-year-old drivers were responsible for 23% of all fatal or serious collisions, yet they accounted for just 7% of car-driving licence holders. They also show that young drivers were responsible for 73% of the casualties in collisions involving drivers aged between 17 and 23. The over-representation in fatal or serious collision statistics is also represented in the Department for Transport’s road safety accident statistics and Great Britain driving licence data, which was used in a House inquiry on this issue that reported in March 2021.

We must also factor in the inflationary pressures on motor repairs and claims. While like-for-like quarter 4 figures for claim costs are yet to be finalised, previous quarterly and annual claims data have shown a clear picture of spiking costs for insurers. Payouts for vehicle thefts rose 35% in quarter 3 2023 versus 2022, longer repair times drove up the costs of providing replacement vehicles by 47% in the same period, and the cost to replace written-off vehicles has increased as the average cost of new cars has risen 43% over a five-year period. However, the largest single factor is repair costs, which jumped 32% in quarter 3 to £1.6 billion of the total £2.54 billion. That reflects a mixture of labour costs, rising energy costs, which we are all too aware of, and the fact that vehicles are becoming more sophisticated, with the likes of electric vehicles requiring even more specialist expertise to repair.

I have written to the Treasury suggesting that the Government, in their engagement with the Financial Conduct Authority, press for closer scrutiny of the industry to determine whether the basis for price increases cited by the ABI and facing drivers is a fair reflection of the pressures on the insurance industry. Many insurance companies known to us have merged and have left the market as a result, exiting from even insuring in the United Kingdom because of the high claims culture and the issues that I have raised. We therefore need to create an environment for these people to come back. They must know that the Government are implementing safety measures that help to drive insurance premiums down.

I note the Government’s response to a petition on this matter, which emphatically ruled out a Government commission. The Government have ruled out any investigation or interference in the market. Although I am realistic about the prospect of a Government U-turn, I believe that other steps can and should be taken to get young drivers on to the road, and importantly, to do so safely for themselves and other road users.

Faced with an industry that provides this basis for the increase in premiums, how can the Government help young drivers towards the rite of passage that is driving? The direction taken by Government must be to support better, safer driving. Let me be clear: most young people drive responsibly and safely, but, as with so many aspects of life, the majority suffer because of the actions of the minority, and that is undoubtedly the case here.

The Government could bring forward a number of measures to help reduce the number of accidents involving young people and thereby reduce the premiums for young drivers. Many of them may not be what young drivers want to see explored, as they all bring some form of restriction on the freedom that they desire. However, given the situation with insurance costs, we must look at all ways for young drivers to force the hand of insurers to reduce those premiums.

A graduated driving licence scheme is one such initiative. A graduated driving licence is the most effective intervention in reducing incidents and fatalities for young drivers. Based on extensive analysis, the scheme could include a minimum 12-month learning period before the driving test can be taken, a ban on intensive driving courses, lowering the age at which young people can learn to drive to 16 and a half, a restriction on the number of young passengers a young driver can carry, a restriction on their driving during nighttime hours, or a lowering of the blood alcohol concentration for drivers aged 17 to 24. All those measures seem fair and compatible with getting young people on the road soon after they turn 17, but more safely. GDL has significant public support. Research shows that the savings, both in terms of lives in road accidents and financial cost, would be significant.

The Government’s 2019 road safety statement indicated a commitment to reviewing GDL in the UK, but that has not been progressed yet. It is my hope that a restored Northern Ireland Executive can progress the agreed policy of GDL in Northern Ireland soon. Indeed, as envisaged by the previous Minister, the right hon. Member for Hereford and South Herefordshire (Jesse Norman), that could be a testing ground for the policy’s effectiveness. Can the Minister outline progress towards that becoming a reality in England, so that help can be given to young drivers in relation to both safety and insurance?

The Government could also support young drivers through financial assistance for installing telematics in vehicles. Those devices can monitor driving and driving behaviour, thus helping to encourage safer driving. However, they can be expensive and, in the context of this debate, which covers cost as an inhibitor to driving, it would be good if the Government explored means of supporting the provision of those devices to young drivers.

I am conscious that other hon. Members want to contribute to the debate and I look forward to hearing other ideas about how we can assist young drivers in our constituencies. In conclusion, I stress the importance of allowing young people the freedom to drive and the necessity for that to be affordable to all. I urge the insurance industry to heed the plight of young drivers and, through transparency and fair pricing, to avoid any accusation of profiteering or unfair practices. I also urge the Government to explore the viability of providing some direct support and to look at how our licensing system can be modernised to help cut both the casualties and the cost of driving for young people.

16:47

[Sir Bill Wiggin (North Herefordshire) (Con)]

I congratulate the hon. Member for Upper Bann (Carla Lockhart) on securing this excellent debate. I agree with everything she said.

This is a critically important subject because the price of insurance for some young drivers has now reached £3,000. The high costs mean that the parents pay, not the children, and so the wrong people are being penalised. In 2022, it was found that parents spent £780 on average on teaching their children to drive in the preceding 12 months. I am not going to argue with the algorithms that the insurance industry uses to calculate the price of insurance. We should just assume that they are right and that companies are underwriting an extremely expensive risk. We should therefore be somewhat sympathetic to the challenges they face, particularly as 24% of fatal collisions involve people aged between 17 and 24.

Seventy-five per cent. of the young drivers who are killed are male and a male car driver aged between 17 and 24 is four times more likely to be killed or seriously injured than a car driver aged 25 or over. That is because it is not until someone is 25—this is particularly true for men—that the frontal cortex of the brain is fully developed. That is the part of the brain that deals with hazard perception and the consequences, and we have developed that over aeons. That is why young soldiers go to war: they are not as frightened of the consequences as older soldiers. That is one of the problems that we have with hazard perception, and it is just one of those things.

We therefore need solutions that will keep our young people alive and on the road. That is why last week I held a roundtable on insuring young drivers with industry representatives, helped by Aviva, the ABI, superbly represented by Robert Rams—I do not believe he is there anymore for some reason and that is a great shame—and other agencies such as the RAC and, most importantly, IAM RoadSmart.

We discussed all the possible options. One of the most important steps forward is an industry-supported training solution so that, once someone has passed their driving text, if they go on to further training, they will get cheaper insurance because the insurance industry recognises that they are likely to be a more responsible and careful driver. The argument that came back was, “Well, that’s a self-selecting group of people.” Yes, it is, and those are the guys we want out on the road—the ones who want to be extra careful and extra well-trained. That is something we should really pay attention to.

In Australia, learner drivers are 20% less likely to be killed or seriously injured. That is because Australia does several things differently. First, people can apply for a provisional driving licence at 16 and a half, but they have to drive for 120 hours before they take their test—so they start earlier, but test later. The average in the UK is only 40 hours. Australia has seen that 20% reduction because of that rule. One of the other really simple things Australia does is not allow more than one passenger. Young people can cope with one voice gassing in the back of the car, but if there are loads of them—I think we all remember packing people into the car and popping down to the pub, or whatever, from our younger days—all that noise is bad for the decision-making process that young men’s brains go through when they perceive a hazard.

Having one passenger makes another difference to the insurance industry: on a rather dark note, it means that if there is an accident, fewer people are involved, and therefore the cost of the life-changing injuries mentioned by the hon. Member for Upper Bann is reduced. We can all do something about that right now. As our children grow up and ask if they can take people with them in cars, the advice should be, “Not until you’re a bit older—not until you’ve got more experience on the road. Please don’t fill your car with passengers. Just take one.” That is something we could do today that would not cost anything and would save lives.

Between 2012 and 2021, there was a 260% increase in the number of casualties related to driving under the influence of drugs. Some 32% of young drivers responding to an IAM RoadSmart survey said that they thought illegal drug driving was more common than driving under the influence of alcohol. So we are also dealing with changes in young people’s perception, the risks they are taking, and the risks they are tackling in their everyday lives. The solution is training courses. Training courses can teach them about driving under the influence and other topics relevant to them.

Safer roads are not just about young drivers—we need increased training for all ages. One effective measure we could take today is changing the rules on speed awareness courses. I do not know if any Members present have transgressed sufficiently to do a speed awareness course—I confess that I have, and they are brilliant. They remind us of our responsibilities and the value of education. Why are we not doing that for people who speed every year? Why restrict it to every three years? If it works, which it does, we should do more of it. It may not be as beneficial, but it is a really good way of improving the standard of all of us on the roads, which in turn makes it harder for young drivers to have accidents.

The Australians also introduced a graduate driver’s licence. People do not just pass their test and go straight on to the road; they have a graduated procedure. I am not sure that is as valuable. One of the things they insist on is a curfew so that young drivers do not drive between 11 o’clock at night and 6 o’clock in the morning. However, most young drivers in the countryside need to drive at that time of day because that is when there is absolutely no public transport, so I am not sure how well that would work; but again, they are much more likely to have an accident at night. In 2019, 37% of young driver fatalities and serious injuries occurred between 9 pm and 6 am, so they are more risk at night.

The one thing that would be easy for the Government to do is lift insurance tax for drivers that display the green P, so that if someone displays the green P on their car, they do not have to pay it. That would not cost the Government a great deal because they would make huge savings from the amount the NHS currently spends on patching people up, and the figures for people killed or seriously injured on the roads would be much lower.

Just lifting that tax burden on those young drivers, as long as they display their green P, would deliver a huge improvement in the cost of insurance and would save the Government a lot of money. Furthermore, it would make the rest of us who are driving more aware of the people most likely to cause an accident—perhaps in front us—in a car. That measure would turn the green P from a badge of shame to a badge of honour, and it would help with the cost to the parents of young drivers.

Data is vital to this issue, and I urge the Government to stop using catch-all data, such as “17 to 25-year-olds.” We need to collect data on 17-year-olds, 18-year-olds, 19-year-olds and so on. If insurance companies want to avoid claims, and young people want to be able to afford to drive, we need to do everything we can to make the model work better. Although we are all happy with what is going on, we are not happy with the net result—young people being prevented from driving legally and safely because their insurance is not just double the price of the car; it can be four times the price of the car. I hope that the debate will prompt the Government to act, and lead to solutions for all of us, but training certainly helps.

16:56

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Mrs Latham. First, I thank my hon. Friend the Member for Upper Bann (Carla Lockhart) for securing it. The issue is incredibly prevalent now, especially in Northern Ireland, as my hon. Friend said.

When we emerged from covid there were large numbers of young people wanting to get on to the roads. It was logical that people just wanted to get away from their homes, and to do that safely. They wanted to learn how to drive, and believe it or not, there are still incredible backlogs in testing. I asked the Transport Minister a question on this issue last year—my hon. Friend mentioned it, too. Another issue my hon. Friend raised was insurance, which is causing many problems for young people in Strangford, so it is good to be in this debate to support my hon. Friend.

I can go back further than most in this room and I remember my first Mini car only too well—it cost me about £60, and the insurance cost about the same. I got third party fire and theft because that was the cheapest option, and it covered the other person if you had an accident. I remember the straight-through exhaust system —I am not quite sure what it did, but it made plenty of noise, and that was one of the things that I liked—and the wide, sporty wheels that I had on it as well.

Of course, you were never really a driver until you got the leather gloves. I am not quite sure what the leather gloves did, but we all figured that if we drove a car, especially a Mini, we really had to have those leather gloves. Thank goodness they are out of fashion now and I do not have to wear them any more. That was an era when insurance was almost the price of the car for third party fire and theft. It was a long time ago, but it does give perspective.

So many young people look forward to being able to learn how to drive, and there is such an element of freedom for them. I remember when my sons were younger and the excitement they felt about for learning how to drive. We just got them a wee cheap car because we figured it would have a few bangs along the way, and it probably did. They got a better car when they got older, but the cheaper car did the job for them when they were learning.

I have two younger staff members who are learning how to drive just now, and that was where the prices of the day caught us up. First, there is the sheer cost of driving lessons, which is £40 on average for an hour once or twice a week; then the theory test is £23; and finally the price of the actual test itself is now up to £200 depending on whose car is used, because it can vary according to the car.

Not only are there those costs of learning—as my hon. Friend mentioned earlier, when someone passes their test they then have to pay the extortionate price of insurance. I have a constituent who is a nurse. She has been driving for a couple of years and was told by her insurance company that if she was to put a black box in her car, the price would go down, despite the fact that she had never been in an accident or had any road convictions.

My hon. Friend and the hon. Member for North Herefordshire (Sir Bill Wiggin) mentioned that many young drivers now face paying £3,000 to get their insurance. That nurse told me that she bought a new car last week that cost her a similar amount to the insurance, which is unbelievable. How is it that we can compare the price of a new car to the insurance premiums that young people face? One of my good friends, a member of my political party, came to me at a meeting a month ago and said, “Jim, I’m being quoted just over £2,500 for insurance. My wee vehicle is worth about £300 or £400.” He could not understand where that came from.

Unfortunately, it is a fact that Northern Ireland has a higher level of deaths and serious injury from road accidents than the rest of the UK, and it is understood that insurers must take that into consideration when insuring younger people. However, we should not tar them all with the same brush. There must be an element of trust; the question is how we achieve that. The hon. Member for North Herefordshire referred to doing tests and driver training, and looking at each category as people move through it. If people do put a black box in, that should reduce their insurance premiums significantly.

The Government can do more to support young drivers. For example, the Road Traffic (Amendment) Act (Northern Ireland) 2016 includes provisions for a graduated driver licensing regime to improve road safety for newly qualified drivers. So there are schemes in place, but they only work if they reduce the cost of insurance, which is what this debate is all about. The UK Department for Transport has said it will consider the Northern Ireland Department for Infrastructure scheme as a pilot for the rest of the UK. My hon. Friend the Member for East Londonderry (Mr Campbell) raised that very issue with the Transport Secretary in November 2023.

I urge the Minister, who is always responsive and tries hard to give us the answers that we desire, to intervene in relation to investigating the price hikes for our young people. The prices that some face are simply unjust, unfair and unaffordable. We must do more to support them and ensure that they are able to obtain decent prices to properly insure themselves to drive on the roads just like the rest of us. Our young people need a hand. Others have mentioned the bank of mum and dad; I know that is where my sons went. I do all my insurance through the Ulster Farmers Union. I find that, because I am a loyal member, its insurance premiums are a wee bit less than anybody else’s. That helped when it came to insurance for my sons when they got cars. The Ulster Farmers Union has done a whole lot for us, and the same goes for the National Farmers Union here. So there are some companies that try hard, perhaps for loyal customers who have all their insurance policies with them, but there are some that must try harder.

17:02

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

It is a pleasure to see you in the Chair, Mrs Latham. I congratulate the hon. Member for Upper Bann (Carla Lockhart) on securing the debate and on speaking so well. We have not heard from the Minister yet, but none of us so far has disagreed with anything that the hon. Lady said. She spoke of the excitement of turning 17. In fact, she mentioned looking at cars when she was 15 —that is even more excited than I was. I remember well looking forward to being able to drive and the freedom that that would give me. My issue was that my driving was delayed by the fact that I failed my first two tests, but then I did not pay for any lessons, so at least I was saving money.

My 17-year-old daughter is just about to start her learner driver journey in the next couple of weeks. Like the hon. Lady, she does not fully appreciate the cost of the cars that she is looking at. The cost of living was mentioned; the cost of lessons ain’t what it used to be, either. The hon. Lady mentioned how difficult it is to learn to drive and pass the test, not least because of limited test appointments, facilities and resources, which were a particular issue during the pandemic. Things have improved, but there is still a way to go, and I have an issue in my constituency that exacerbates that. The Paisley test centre is based in the St James Business Centre, all the occupants of which were summarily and without any notice whatever given two months’ notice to leave the building, as it is about to be demolished for future plans. I wait to see what the Driver and Vehicle Licensing Agency is going to say about that.

The main issue, as the hon. Lady highlighted, is exorbitant insurance costs for young drivers. Nobody is suggesting that young drivers—and older drivers, to be fair—are not more likely to be involved in accidents, and the hon. Lady cited a number of statistics, but she also made the fair point, which we have to remember in this debate, that most young drivers drive responsibly. The majority are being impacted by the minority.

The hon. Member for North Herefordshire (Sir Bill Wiggin) said that the cost of insurance is now up to around £3,000 for some young drivers. I confess that I have not yet looked at the potential insurance costs for my daughter, not least because I do not want my blood pressure to shoot up. One way that some of those costs could be reduced is reducing insurance premium tax for young drivers, which is currently 12% or 20%, depending on the total policy cost. At the moment, that can amount to anything between £244 and £408 per year, which for some of us in this room is more than our annual car insurance premium in full. That would be a welcome move to alleviate some of the pain for young drivers.

The hon. Gentleman also said that male drivers aged 17 to 24 are four times more likely to be involved in a fatal crash. Shocking though that is, it probably is not a surprise to many of us here, having seen and been young drivers ourselves and then grown up. We tend to be a little more macho behind the wheel when we are younger. He also mentioned that Australian young drivers are 20% less likely to have an accident due to the differences in their graduated licensing scheme and the learning processes in place there.

The hon. Member for Strangford (Jim Shannon)—I call him the Member for Strangford and Westminster Hall West; it would not be the same without him in this place—spoke of his upbringing and having a £60 car, which is quite something. I do not know about you, Mrs Latham, but I am struggling to see a young hon. Member for Strangford—I was going to use his name—in his souped-up car with loud exhausts. I cannot quite get that image into my mind. If he has any pictures of that, it would be good if he was willing to share. He mentioned a constituent who had been driving for a couple of years who was told that if they put a black box in their car, their premium would be slashed, despite the fact that they had two years of clean driving.

All the points have been made for me thus far, but I would like to put on the record that, although the DVLA and DFT have no plans for graduated driving licences, there is enough evidence from around the world that, at the very least, we in this place should be looking at bringing them in to increase safety for younger drivers—all drivers, in fact—but also to reduce costs and make it easier for young drivers to get into driving after a slightly prolonged learning period, as the hon. Member for North Herefordshire said. We would love to see this Government looking at a graduated driving licence scheme and perhaps putting one into operation.

17:08

[Bill Esterson (Sefton Central) (Lab)]

It is a pleasure to see you in the Chair, Mrs Latham. On Thursday, it will be 40 years since I passed my driving test at the age of 17—this debate has been something of a trip down memory lane for a number of us. Passing my driving test certainly opened up a wealth of opportunities for me, as it has for so many other people.

The hon. Member for Upper Bann (Carla Lockhart) gave an excellent analysis of the many challenges faced by young drivers. She highlighted how being able to drive makes all the difference for young people in work and for those who are not easily connected by public transport. My constituency has a number of similarities with hers, with rural areas and a lack of public transport in places. We have the highest level of car usage in the country, in part because of those gaps in public transport.

Young drivers now have to wait 18 weeks for a driving test date. Those delays have very real consequences for young people who need to drive for work or to study. The Government promised action to reduce the wait, but they have failed to deliver. In October, the Transport Secretary told the House that the Driver and Vehicle Standards Agency had a plan to get within a target of nine weeks in the next few months, so perhaps the Minister can tell us why there are still long delays.

Alongside that backlog, young drivers face particular challenges with the cost of driving. That is especially true of the cost of insurance, which has increased by 98% for 17-year-olds, while average insurance prices have increased by 58% over the last year. The price increases in the UK have far outstripped those in the EU, where prices increased around 10% between the beginning of 2021 and the end of 2023; over the same period, the price almost doubled in the UK. Analysis from EY suggests that insurance premiums are expected to rise a further 10% in 2024.

Labour is committed to addressing these increases in insurance premiums if we are fortunate enough to form the Government in the coming months. We will consult industry and consumer groups on ways to crack down on unfair practices by insurers, such as lack of transparency over auto-renewals, the rise of hidden fees and the poor value of insurance products. We will also task the Competition and Markets Authority and the Financial Conduct Authority with investigating the high costs of insurance. When the CMA carried out a similar review in 2015, it found evidence of hidden fees. It is time for a further review. I hope the Minister will agree with me to that extent. By taking steps to tackle unfair practices and hidden fees, Labour’s plan could save young drivers hundreds of pounds per year by allowing them to choose the insurance policy that is right for them.

Turning to the link between claims and premiums for young drivers, Transport Minister Lord Davies told the House of Lords last month:

“Young male car drivers aged 17 to 24 are four times as likely to be killed or seriously injured compared with all car drivers aged 25 or over.”—[Official Report, House of Lords, 15 January 2024; Vol. 835, c. 221.]

The ABI tells us that claims are highest among young drivers, pointing out that in 2019 they made up 7% of all licence holders but were involved in 16% of fatal and serious crashes. These stark numbers explain why insurance premiums are higher for younger drivers and why improving safety is key to reducing insurance costs for young drivers. The ABI has previously recommended—[Interruption.]

[Mrs Pauline Latham (in the Chair)]

Order.

17:12

Sitting suspended for a Division in the House.

09:59

On resuming—

[Mrs Pauline Latham (in the Chair)]

Order. The sitting is resumed and the debate may now continue until 5.50 pm.

[Bill Esterson]

Thank you, Mrs Latham, for calling me again. I think that I had just said that the stark numbers explain why insurance premiums are higher for younger drivers—

[Mrs Pauline Latham (in the Chair)]

Order. Minister, we have started the debate. Thank you.

[Bill Esterson]

This could be the third time that I say this bit. The stark numbers explain why insurance premiums are higher for younger drivers and why improving safety is key to reducing insurance costs for young drivers.

As the hon. Member for Upper Bann mentioned, the ABI has previously recommended the introduction of a graduated driver’s licence and I am sure that Members would be grateful if the Minister provided an update on whether his Department is still considering such a policy. If not, what alternative measures are he and his colleagues taking to ensure the safety of young drivers?

Will the Minister also provide a timeline for the Government’s plan to publish the findings of their Driver2020 study, which aimed to test the effectiveness of a telematics approach using a mobile phone application rather than having to fit a black box? Again, I am sure that young drivers and the insurance industry would benefit from clarity on this point. The Minister will need no reminding that the last strategic framework for road safety was published in 2011 and that, although road fatalities fell by 50% when Labour was last in office, since then they have fallen by only 8%.

As a number of Members have mentioned, road safety is a particularly important issue for young drivers, who are more likely to be injured or killed on our roads. Road safety should be a top priority for Government, so it has been disappointing to see a lack of progress on this issue. Will the Minister tell us whether he plans to publish the long-promised update to the strategic framework for road safety?

The hon. Member for North Herefordshire (Sir Bill Wiggin) mentioned the speed awareness course. In a previous Westminster Hall debate, the Minister’s colleague, the Under-Secretary of State for Transport, the hon. Member for Hexham (Guy Opperman), told us that the Department of Transport’s own figures suggested that attendance of a speed awareness course reduces the likelihood of a driver being involved in a serious road traffic incident. Are the Minister and his colleagues considering the benefits of speed awareness courses? Are they considering making them part of the driving test to help to boost safety, not least among young drivers?

Finally, I thank the hon. Member for Upper Bann for securing the debate and for her excellent presentation. Supporting the Driver and Vehicle Standards Agency to reduce its backlog will help young people to get on to the roads, while cheaper insurance and promoting safer driving will help those who have passed. I agree that we should be supporting younger drivers and doing more to ensure their safety on our roads. I look forward to hearing the Minister’s analysis of the potential solutions that have been raised today.

17:25

[The Parliamentary Under-Secretary of State for Transport (Anthony Browne)]

It is a pleasure to serve under you today, Mrs Latham. I want to thank the hon. Member for Upper Bann (Carla Lockhart) for bringing this important debate to the House. Hon. Members may have noticed that I am not the roads Minister, but I am here because the Under-Secretary of State for Transport, my hon. Friend the Member for Hexham (Guy Opperman), has to appear in the Adjournment debate. I was only asked to do this a couple of hours ago, so I am a last-minute stand-in for an area that is not in my brief. I ask hon. Members to forgive me if I do not answer every question here, but I will make sure that the questions are answered afterwards.

The debate focuses on an important issue. The hon. Member for Sefton Central (Bill Esterson) and I must be the same age, as I too passed my driving test aged 17, 40 years ago. I was very keen to drive as quickly as possible, for all the freedom it gave me growing up in Cambridgeshire. I have two teenage children who I am currently encouraging to learn to drive, so I am aware of all the things that various hon. Members mentioned as regards the difficulties of young people driving.

Obviously, as a parent, I am incredibly concerned about safety and very aware of the costs of insurance. I and the Government are big supporters of helping young people to be able to drive and to do so in as safe a way as possible. It really should not need saying that every single death on the road is an absolute tragedy, and even more so for somebody who is at the start of their life. We need to do everything we can to prevent that.

The Government will continuously strive to improve road safety, but overall we have a good record in the UK. I used to do quite a lot of work on road safety in the 1980s; there were around 5,000 or 6,000 deaths a year back then. Now, it is around 1,500 deaths a year. Each one is a tragedy, but that is a dramatic fall. We now have the third safest roads in Europe, with only Norway and Sweden having safer roads, but clearly we still need to do more because every death is a tragedy.

As various colleagues have mentioned, young drivers are a particular risk. Young drivers between the ages of 17 and 24 account for 6% of driving licence holders but were involved in 28% of fatal and serious collisions in 2022. However, like the headline figures, the number of car fatalities involving 17 to 24-year-olds on Britain’s roads is also falling. We have seen a drop in the number of 17 to 24-year-olds killed—from 448 in 1990, to 158 in 2010, to 101 in 2022. That is a 77% total decrease since 1990: a very significant drop.

I will try to address all the issues raised here as far as I can, but many are not for my Department, but for others. Indeed, many are also devolved issues and not for the UK Government but rather for the devolved Administrations. I will, however, endeavour to cover all the points raised.

Pretty much everyone who spoke raised the issue of car insurance. I pay car insurance and have noticed the dramatic increase. I was really quite shocked and, indeed, annoyed by it, so I am well aware of the dramatic rises. Various hon. Members have rehearsed the different arguments for it, but it is really quite shocking. As the Minister responsible for the decarbonisation of transport, I speak a lot to car companies, particularly about electric vehicles. The insurance there is also very high, so I have summoned a roundtable of insurers to talk about that in the coming weeks.

I have also heard from car manufacturers about insurance. Some hon. Members mentioned that insurance is £3,000, but we can multiply that by 10 for some cars, and I know that that is affecting car sales. In other words, the insurance is so high that people are not buying cars. The issue, therefore, not only affects young drivers, where it is clearly significant, but is across the piece.

Insurance operates in a free market that is not run by the Government. We have a strong regulatory regime in place and it needs to work to ensure markets work fairly and in the interests of consumers. The Government do not prescribe the terms, conditions or prices that insurance companies set when offering motor insurance—it is not a state-controlled market—and we do not intervene in the decisions of insurance companies when determining whether to provide cover. Indeed, direct Government interventions in a market of that nature could damage competition overall. It is therefore for insurance companies to decide the level of risk in issuing any policy to a given applicant.

As hon. Members know, insurers use a range of criteria to assess the potential risk a driver poses, including their age, the type of vehicle being insured, the postal area where they live, and their driving experience and record. They set their own premiums, and it is a commercial decision for them based on their underwriting experience. The Government do not intervene or seek to control that market, and nor should they. That said, my officials regularly engage with representatives of the motor insurance industry on a number of matters, including the rise in premiums—we have addressed that with the insurance industry.

The Financial Conduct Authority is the independent regulator responsible for regulating and supervising the financial services industry, including insurers. I have spent a lot of my career working with the Financial Conduct Authority, and I can say that it has a wide range of strong powers to intervene in markets that are not working well, and it has a statutory duty to ensure that markets work well in the interests of consumers. It has a broad range of supervision, enforcement and competition powers, including the power to undertake market studies where it thinks markets are not working well and to see whether they can work better.

If there are particular interventions that should be made, the FCA can refer markets to the Competition and Markets Authority, and that is the proper way of doing things. It is not my role as a Government Minister to try to instruct an independent regulator on how to appear, but I am sure that it is listening, and I know many people in various aspects of the industry are writing to the FCA to urge it to look at the insurance market. It is an independent regulator, and it is not my job as a Minister to tell it how to use its powers to meet those objectives.

The FCA has recently taken several measures to improve the fair value of insurance products for consumers, including reforms across the motor and home insurance markets. As hon. Members have said, on 1 January 2022 the FCA introduced new rules that require firms to offer a renewal price that is no greater than the equivalent new business price that the firm would offer a new customer. That is to stop the loyalty penalty, where loyal customers end up paying more than new customers, which was deeply frustrating and has now been banned. The FCA estimates that those new rules will improve competition and save consumers £3.7 billion over 10 years. Under FCA rules, firms are required to ensure that their products offer fair value—that is, the price the consumer pays for a product or service must be reasonable compared to the overall benefits they can expect to receive. The FCA has been clear that it will monitor firms to ensure that they provide products that are fair value and that, when necessary, it will take action.

It is important to highlight, as some hon. Members have, that young drivers are generally less experienced and, sadly, more likely to be involved in collisions. They subsequently carry a higher risk with insurers when they seek motor insurance and, as a result, often pay higher premiums. To counter that, some insurers have introduced the use of telematics or in-car black boxes to allow better risk-based pricing of insurance, especially for new drivers. As hon. Members have said, many new drivers are safe drivers but are being punished with higher premiums because of those new drivers who are not quite so safe. If an individual has a real-time data feed, it allows the insurer to assess their driving behaviour, and that has not been possible in the past. The use of this new technology can help reduce insurance premiums if drivers show good driving behaviour with a black box installed in their cars.

[Sir Bill Wiggin]

That is a lovely idea that the insurance industry has put out there. However, if it is for someone’s children, it makes absolutely no difference because until the insurers have gathered the data on the driver, they do not reduce the premium. It is an after-the-horse-has-bolted solution and does not really fit the problem.

[Anthony Browne]

I thank my hon. Friend for that intervention. Clearly, it takes time for the insurer to gather the data and to give the benefit, but this can be useful in reducing premiums for certain young drivers.

Different insurers obviously take different views of their relevant factors in determining the price for insurance, and the motor insurance market is very competitive. As we all know, if we look online we will get many hundreds of different quotes. The message from the Government is that consumers should shop around to find the best products. Certainly, when I have renewed insurance and shopped around, I have found dramatically different quotes. It is quite surprising for a competitive market to see how different the quotes are—it is really worth doing. The British Insurance Brokers’ Association runs a not-for-profit “find a broker” service if someone wants a broker rather than going directly online. It specialises in finding cover for those who have difficulties obtaining the cover they need at a reasonable cost.

Several hon. Members mentioned broader support for young drivers. As I said at the beginning, the Government are supportive of young drivers. For new and novice drivers, the Department’s broad aim is to improve road safety through new technology and research, and, particularly for young drivers, through developing better learning opportunities and targeted educational messaging, while reinforcing vital behaviour change road safety messages through our THINK! campaign.

The THINK! campaign aims to reduce the number of people killed and seriously injured on the roads in England and Wales by changing attitudes and behaviours among those at most risk. It has an annual media spend of over £3 million, with recent campaigns on drink-driving, speeding and mobile-phone use. The primary audience for the campaigns is male drivers aged 17 to 24, who are at a higher risk and are four times more likely to be killed or seriously injured than drivers over the age of 25.

Several Members—including the hon. Member for North Shropshire (Helen Morgan), who is no longer in her place, and the shadow Minister, the hon. Member for Sefton Central—mentioned driving test waiting times. Indeed, the hon. Member for Upper Bann also mentioned that. I should say that Northern Ireland driving testing is a devolved issue, so that is up to the Northern Ireland Government—and now that there is one in Northern Ireland, I suggest that the hon. Lady raises that matter with the Northern Irish Government.

For England, Wales and Scotland, the Driver and Vehicle Standards Agency priority has been to reduce car practical-test waiting times while upholding road safety standards. The DVSA has deployed all eligible managers and administrative staff back on to the frontline for driving tests until the end of March. That will create around 150,000 new test slots. The measures put in place to reduce waiting times for customers, together with the ongoing recruitment of driving examiners, are creating, on average, more than 48,000 extra car test slots each month. As of 12 February 2024, there were 523,353 car practical driving tests booked—that is a very precise number—and 128,360 available within the 24-week booking window.

Several Members, including the hon. Member for Upper Bann, mentioned graduated driving licences. Indeed, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) sang their praises as well. Again, I should say that driving licensing is a devolved matter in Northern Ireland, as has been recognised, so, again, Members with particular issues or concerns about that in Northern Ireland should speak to the Northern Ireland Government.

In Great Britain, the Department for Transport keeps driving licensing requirements under review, but there are not any plans, at the moment, to introduce any further restrictions on younger drivers. We acknowledge that, in terms of population and the number of miles driven, 17 to 24-year-olds remain one of the highest fatality risk groups, especially males.

We do have a form of restricting novice drivers though the Road Traffic (New Drivers) Act 1995. On acquiring their first full licence, a new driver is on probation for two years. During that time, they are subject to a limit of six penalty points received for any driving offences, which includes any that they received during their learning stage. If six or more points are received, a driver’s licence is revoked and they must apply again for a provisional licence, re-entering the learning stage and going back to square one.

In the road safety statement 2019, action 8 was to

“Commission research to explore the potential of a Graduated Learner Scheme”.

That research was delayed due to the pandemic, but we look forward to receiving the findings of that in due course. Action 9 was to

“Commission research to explore the social and economic consequences of introducing Graduated Driving Licence”,

which is different from the graduated learner schemes. That research was not taken forward, but we are aware of the TRL report for the RAC Foundation and the Rees Jeffreys Road Fund, “Supporting New Drivers in Great Britain”, which was published in October 2022. In that report, eight areas of concern were considered, including potential impacts on access to employment and education, and on those in rural areas.

My Department has commissioned the £2 million Driver2020 research project to examine interventions designed to help learner and newly qualified drivers improve their skills and safety. The project includes looking at the effectiveness of telematics, the use of a logbook, extra hazard perception, classroom-based education, and mentoring agreements. We look forward to receiving the findings from that project, which will feed into considerations of further measures that we could take to improve road safety for young drivers.

Once again, I thank the hon. Member for Upper Bann for securing this debate on such an important matter. I hope that hon. Members are all reassured that Government are committed to supporting all road users and to improving the safety of our roads. That includes young drivers, who, as I mentioned, are involved in far too many crashes.

17:39

[Carla Lockhart]

I thank the Minister for his response and for committing to take on board issues such as the roundtable. He mentioned the THINK! campaign, which I think needs to be promoted further, and the graduated driving licence and what will come out of the initiative that was introduced in 2019. I thank him for his response, and I encourage him to continue to push this issue.

I thank all those who have contributed, including the hon. Member for North Herefordshire (Sir Bill Wiggin), who spoke very eloquently and mentioned learning in Australia. That is really important. He also mentioned the idea of parents being first educators and awareness of safety issues.

I thank my hon. Friend the Member for Strangford (Jim Shannon). He is ever the encourager and always brings issues from Strangford to the table. I am still thinking of him with black gloves on. As he said, it is unjust, unfair and unaffordable—those three are key words. We need to learn from that.

I thank the SNP spokesperson, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), for bringing us the lived experience of his daughter and mentioning the need to support young people. He also mentioned learning in Australia.

I thank the shadow Minister, the hon. Member for Sefton Central (Bill Esterson), for his contribution. He mentioned research by the FCA and the CMA into hidden fees. We really should start to delve and dig into that issue. The key thing is pushing the Financial Conduct Authority to do a market study into this to try to identify ways and means of driving the price of insurance down for young people. We need to ensure that our young people can get on to the roads safely with premiums that are affordable. I thank all who contributed and I thank you, Mrs Latham, for your assistance from the Chair.

Question put and agreed to.

Resolved,

That this House has considered Government support for young drivers.

17:41

Sitting adjourned.