Finance Bill

I have absolutely no idea. As a humble Back Bencher, I simply make my comments and observations. Clearly, I will happily take a lead from our Front Benchers; they are immensely sensible individuals, and will make their arguments. But I have my own observations to make about the changes. One of those observations is that there is a level of compulsion that distinguishes motor insurance. In a way, private health insurance is an entirely discretionary commodity, so I suppose one could argue that paying tax on it is a matter of choice, but that is not the case for drivers and for motor insurance. As the right hon. Member for East Yorkshire (Mr Knight) said, in the case of third-party car insurance we are talking about adding a tax on top of a charge that is effectively a requirement in law. That raises the hackles. It makes me feel aggrieved that there is a bit of opportunism on the part of the Treasury. It is a parasitical choice effectively to cream off more money from something that the general public have no choice but to get. I suppose that those on the Treasury Bench might say that members of the public could give up driving and stop purchasing cars. Perhaps that would be good for the environment more widely, but in the real world, people have to get around, have to get to the shops and to school, and have to commute. It is part and parcel of ordinary life. I am very worried—genuinely worried—that ratcheting up insurance premium tax on motor insurance will create a disincentive for people to comply with the law, take out insurance, and ensure that the cost is covered if any accidents occur or harm is caused to other members of society and the wider public. In my constituency in Nottingham, the road safety and casualty reduction budget has taken a hit as a result of the cuts announced by the Government parties. Something in the order of £350 million is being taken out of that budget in this financial year alone. Clearly, it would not be in order for me to refer to an amendment that I have tabled that would hypothecate the revenues from the motor insurance IPT increase and put that money towards road safety and casualty reduction. All that I would say is that there are concerns in my constituency and elsewhere that not only are we losing money for road safety, but if we discourage people from taking out motor insurance, and encourage them to go down the illegal route and to drive without car insurance, when there are problems and accidents, and individuals suffer trauma or are caused harm, they will struggle to recoup any compensation. That is especially regrettable. As I said in an intervention on the hon. Member for Christchurch, some young people, who may pay £1,000 or even more for their insurance, may come to a rational yet entirely perverse judgment and say, ““I'll risk not getting that car insurance. I'll drive uninsured.”” They will risk getting six points on their licence, and a £300 or £400 fine—that is the typical amount that magistrates will impose—if they are caught driving without insurance. Members on the Treasury Bench really ought to speak to the Justice Secretary, who introduced insurance premium tax in the first place, and make representations that fines for driving without car insurance should be at least commensurate with the cost of car insurance. That is an extremely serious point. I understand that in a magistrates court, if an individual is fined for driving without proper motor insurance and they are not earning and have a very low income, the fine can be as low as £80 or £90. That gives them an even greater incentive to chance their arm and to go without car insurance. There are some extremely serious points here. Let me come on to the effects of insurance premium tax on buildings insurance and contents insurance. When times are tough, many of my constituents may well look at their outgoings and think: ““What could I do without? What will go first?”” Clearly, they know that there are legal obligations to pay council tax, utility bills and so forth. Those things that are on the margins, such as home insurance and contents insurance, tend to go first, and that is extremely regrettable. Of course, adding further tax to those items will speed up the decision for many of my constituents, who will say, ““This is becoming unaffordable.””