Speaking in a debate on the cost of car insurance for young people, Anne Main calls for insurance companies to more accountable and to justify the way premiums work.
It is a pleasure to serve under your chairmanship, Sir Roger, in this important debate. While I disagree with capping fees, it is immensely important that we look at how the insurance industry treats our young drivers, because as I said when I intervened on my hon. Friend the Member for Bexhill and Battle (Huw Merriman), it is not treating them fairly. A lot of things have come into play since the gender directive. We all remember the adverts with pink ladies and all the rest of it, where young ladies and women could get car insurance that reflected the risks they were likely to encounter, and surely that is what insurance should be about.
As the hon. Member for Berwickshire, Roxburgh and Selkirk (Calum Kerr) said, we have all been young drivers. We were all pretty young and stupid then, and we learnt to drive as we went along. I am certain that every single one of us had a few near-misses or skirmishes with gate posts—there were none of the reversing sensors that we may have now. As the hon. Member for Liverpool, Riverside (Mrs Ellman) said, this has been going on for a very long time. There is nothing new in young people being more likely to make mistakes and slip-ups.
May I say that I have the best and most beautiful constituency? But I think I also have the worst roads. Previously, roads certainly did not have the craters—they are not potholes—we have in Hertfordshire and many other parts of the country. Road maintenance must be part of this. Road markings are often poor or obliterated, lighting is often poor and vegetation is often not cut back. That is all part of the picture for young and inexperienced drivers. If a road hazard sign has been defaced or is not visible because of vegetation, that is no help to a young, inexperienced driver.
Insurance companies are getting away with murder. We have not mentioned the fact that there are criminals who ram the back of cars—and who better to target than a young person in a scruffy old car? There are people who cry wolf about injuries that they certainly did not experience. All that has been factored in and spread across premiums. All of us have been in the position where our driving was a little rockier than it might have been. Perhaps now we should accept that insurance should spread across the whole age group, and that is where I find sympathy with the direction of the petition.
I am worried that this is a social mobility issue as much as anything else. In my constituencies such as mine, where the average house price is more than £550,000 and where £1,200 does not rent an awful lot of property, young people who want to leave home or get jobs are priced further out. The golden rule is: the nearer the train station—which has wonderful links to London—the more expensive the rental. As a result, if young people—this is up to age 25—leave home, perhaps when they are in relationships, they are forced further and further away. The majority of my economically active constituents will go to London; there is a huge amount of churn in my constituency. People who are less economically advantaged commute in from areas where rents are less expensive, to do some of the key jobs of such constituencies, on a lower pay grade. So there is the perverse situation where people with less in their pocket, who live in areas where car theft is potentially more likely, are penalised for coming to do care work or other essential jobs in my constituency, because they have to drive in from further away. The whole picture needs to be taken into account by the insurance industry.
It seems unfair that, because of the high rents in areas such as mine, young drivers who have to rent in a less salubrious place than they might like—I am sure we all want to live in a nice area—should then have that weighted in their car insurance, because of the actions of those who come into that area and decide to deface, take or wreck their car, or use it for a criminal purpose. I do not believe that the insurance companies play a fair game. That is why the drift of the petition is extremely important.
My hon. Friend is making an excellent point, but is she worried, as I am, that where people live is not the only factor in the situation? The additional premiums force young people to buy older cars, and if they do that, they are generally buying cars that are less safe.
My hon. Friend makes a pertinent point, but for many young people the price of the car is the least of their worries. A fairly reasonable little runaround can be had for less than £1,000, which is about 50% of the cost of insuring the thing. They buy older cars because they have to, but unfortunately those may not have all the gizmos that make them safer or easier to drive, such as the reverse parking sensors that I mentioned. Those are beyond the wildest dreams of many young people, without—this is the thrust of my comments—the bank of mum and dad. I am a bank of mum and dad, as I am sure are many of the right hon. and hon. Members taking part in the debate.
My son is 21—and probably will not thank me for mentioning him in the debate. We bought him his car and paid the insurance premiums. We helped him with petrol when he was 18 and studying for his A-levels, because I did not want him to worry about whether he could pay for his car, and I wanted him to get to places safely. I have four children, who are all grown up now, but, particularly in the case of my daughters, I did not want them to be at the mercy of a bus that might not turn up if they had been to entertainment away from where we live.
Many a parent has such a dilemma. Often, perversely, the safest way for young people to get home at night is to drive. Buses often do not run into the rural areas, of which there are some in my constituency. Let us be reasonable: if young people are out, at 20, a 10 o’clock curfew is not going to happen, is it? That is what makes me say that insurance premiums should be spread between all of us. Parents want our young people to get home. We want people to be able to rent a property or a room further out. To bring the argument back to my 21-year-old son, he has gone on to a higher-level apprenticeship, and he could not have got access to it, up in Macclesfield, if he could not drive. It is vital—otherwise, many people would not be able to take up opportunities such as apprenticeships or other work that they wanted to do. Mention has been made of carers working in rural environments; such opportunities are not open to young people if premiums are so high.
Eighty-six per cent. of St Albans residents have access to a car or van, which is above the county average, and 89% of residents aged over 17 have a full driving licence. The roads in my area are incredibly congested. Therefore, not only is there competition to get to the jobs and to live in areas that people can afford; they are dicing with the M25 and the M1, some of the biggest and most difficult stretches of motorway in the country. Some of the comments that have been made in the debate about expanding people’s driving experience are hugely important.
I am concerned that, as with many aspects of life, if someone’s parents can afford it, they will be able to afford to be mobile and live somewhere affordable. The children of those parents will have opportunities that other young people do not have. Perversely, although in areas such as mine there is a deficit of blue-collar workers —there is no trouble in finding a job in St Albans, which has almost zero unemployment if a young person wants to work in such industries as caring or hospitality—people in those jobs probably do not live in St Albans. The point I am making is for young people everywhere, because not everyone has access to the bank of mum and dad.
This a question of whether we are truly interested in equality—in this case, equality of opportunity. The insurance companies are having a merry game of it. I know that this debate is about young people and not elderly people, but, believe me, there are a lot of bashed up cars in Waitrose car parks as a result of people suddenly taking on the delights of an automatic car, because they are rather elderly and their hip or knee does not want to press a clutch any more. I can say that because my eldest son works in Waitrose, and it is amazing how often it happens. I am sure that many people will have seen similar things. The elderly are driving for far longer than they would have years ago. They, too, are forced into it by a lack of bus services and so on, but in many cases people who go over to an automatic car have problems with the premiums.
We accept that there are times in our lives when a bump and a dink are more likely to happen. I would like a more pragmatic approach from the insurance companies. They need to be more accountable and to justify the way premiums work. It is disgraceful to just accept a set of statistics that says, “If a person is a young driver, they’re more likely to have an accident; therefore, we’ll just price certain young people out of being mobile.” I would not want to think that young people can be in the privileged position of being free to go where they want only if they happen to have a bank of mum and dad. We should all be concerned about that, because there will be huge parts of the country where young people will probably drive without insurance, and that is the worst possible thing for everybody.
My hon. Friend is making an excellent speech—I hope that I can contribute to this debate—but premiums actually are not based solely on risk. It used to be the case, a while ago, that young men paid higher premiums than young women. Of course, we were told that that was discriminatory, but it actually reflected risk—that is what the statistics said. Sadly, a lot of young women’s premiums had to rise to ensure that everything was fair and equal. I do not think that premiums are always based on risk—other things sometimes come into play.
My hon. Friend is absolutely right—I wholeheartedly agree. The Transport Committee and the Petitions Committee met jointly to hear evidence. We heard from the head of research at the RAC, who said that
“insurance costs are based on four main things: the cost of the vehicle; the likelihood of theft; the cost of available claims generally, if you were to make a claim; and the risk of the individual.”
The hon. Gentleman is making some excellent points. My other concern about that proposal is this. We encourage people to car share, but if, for example, students were forced to drive their own cars individually instead of getting into a car with a group of other students to go off to college for lectures or whatever they were going to do, we would be increasing the number of cars on the road, which in areas such as mine is the last thing anyone wants.
The hon. Lady is right: all aspects of graduated licensing need to be considered.
I am pleased that my hon. Friend mentioned that. Is there any opportunity for us to consider the gender directive? If we are truly interpreting risk, suddenly hiking premiums for young women seems unfair.
Not right now, but who knows where the future will take us? We have some idea, but the detail will still need to be filled in. Opportunities will certainly arise and that may well be one of them.