Conal Gregory: It's time to put the brakes on callous uninsured drivers

THE Budget brought a not unexpected increase in the tax on motorinsurance but it will have little impact on dissuading theirresponsible unless we have joined-up government. The Treasury and the judiciary need to knock their heads together.

From next January – and in view of the dire economic state of the nation's finances some might ask, why wait? – insurance premium tax (IPT) on vehicles rises from five to six per cent. This is

significantly below both holiday travel insurance (17.5 per cent which is rising to 20 per cent in line with VAT) and most EU states.

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Insiders had been predicting a far greater hike. The AA said the rise "is less painful than it could have been". The British Insurance Brokers' Association is concerned that increases to insurance premiums "could lead to even further under-insurance or even a lack of insurance protection." Currently, this general tax applies not only to motor cover but to home and pet insurance. Apart from Spain where the current tax is six per cent, rates in continental Europe are far

higher, such as 9.25 per cent in Belgium, 12.5 per cent Italy and 18 per cent in France. In Scandinavia, the rates reach 22 per cent, soon to be 23 per cent in Finland and 32 per cent in Sweden.

IPT for motor and general cover was introduced in 1994 at 2.5 per cent and increased five years later to five per cent. The tax raises 2.3bn annually for the Treasury.

The worry is that already far too many motorists disregard insurance, aware that the chances of getting caught are slim and the penalties derisory.

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Nationally, an estimated five per cent of motorists are uninsured but this rises to 7.2 per cent in West Yorkshire (fourth worst in the country) and 5.5 per cent in South Yorkshire (eighth worst) but falls to 1.7 per cent in North Yorkshire. The worst two regions are London with 12.9 per cent and Merseyside with 12 per cent. Uninsurance means innocent insured drivers have to pay an annual 400m for the victims of such callous behaviour, according to BIBA.

There are two ways a motorist can be penalised. One is by a fixed 200 penalty by the police at the roadside and six points on the licence.

The vehicle is impounded and 150 charged for its release plus 20 daily storage fee. Crucially, proof of vehicle insurance is required before the car may be collected.

The other route is through the courts which can impose a maximum 5,000 fine for uninsured driving but on average the most recent figure was just 177. This means that for thousands of cases the fine is as low as 50 – massively below the premium. This is where Ken Clarke as a business-minded new Lord Chancellor needs to hold urgent meetings with George Osborne. The penalty should be set in stone with no deviation. Successive judges have failed to realise the message they are sending out that irresponsible behaviour does not even warrant a proper fine.

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The judiciary evaluates the penalty based on the motorist's financial resources. The upper echelons have dictated that non-monetary alternatives – such an unpaid work or prison – would be "inappropriate" as this would distort the penalties meted out for other crimes.

Such law is more appropriate to a Gilbert and Sullivan opera. Instead, failure to pay should result in a fixed prison sentence or a

combination of unpaid community work of 250 hours and later repayment with interest. The licence should be revoked for three years.

Last week, a London judge imposed only 180 hours of unpaid work and six points on the licence with a one year ban for a 21-year-old man who admitted causing death to three passengers while driving uninsured. In such an appalling case, it shows how far the judiciary is out of line.

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Clearly, of course, other penalties need to rise to show society's repugnance to crime.

This means not only the two great Government departments of state in the Treasury and Judiciary being brought together but the Home Office involved to create a triumvirate for the same purpose. Just as Pompey, Crassus and Caesar worked together in 60BC, so our new coalition

leaders need to eradicate this scourge of the roads – the uninsured driver.

One glimmer of hope arises for implementation next year: a new offence of being a registered keeper with no insurance. It will bring in a system of continuous insurance enforcement where the motor insurance database is compared with the DVLA registered keepers' database. This should help the police who tend to take action on non-insurance only when other offences have been committed.

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Helpful as that may be, an immediate way forward is for insurance companies to issue small stickers which indicate payment of motor

cover. As in France, such evidence can be fixed to a screen or car plate and anyone can see at a glance who has paid. While a few such certificates may be illicitly produced, it will be an obstacle to the uninsured.

Conal Gregory is the Yorkshire Post's personal finance correspondent.