details.aspx Minutes Of Evidence Report

Official Report: Minutes of Evidence

Committee for Infrastructure, meeting on Wednesday, 19 January 2022

Members present for all or part of the proceedings:

Mr Jonathan Buckley (Chairperson)
Mr David Hilditch (Deputy Chairperson)
Mr Roy Beggs
Mr Cathal Boylan
Mr Pádraig Delargy
Ms Cara Hunter
Ms Liz Kimmins
Mr Andrew Muir


Ms Mallon, Minister for Infrastructure
Mr Donald Starritt, Department for Infrastructure
Mrs Katrina Godfrey, Department of Agriculture, Environment and Rural Affairs
Mr Jeremy Logan, Driver and Vehicle Agency

Motor Vehicles (Compulsory Insurance) Bill: Ms Nichola Mallon MLA, Minister for Infrastructure

The Chairperson (Mr Buckley): I begin by welcoming the Minister and her team to the Committee to brief members on the proposal for a motor insurance Bill to proceed by way of accelerated passage. The meeting will be recorded by Hansard.

Before the meeting commenced, I explained to members that we will take today's meeting in three distinct parts. We will begin with the briefing on the proposed motor insurance Bill and the request for it to proceed under accelerated passage. That will be followed by the briefing on the January monitoring round and general Budget 2022-25 issues. Finally, we will take a briefing on current issues. We will try as best as we can to keep to that schedule. I ask members and, indeed, officials please to bear that in mind. It is a busy schedule, and I know that the Minister has given us a time commitment.

Ms Mallon (The Minister for Infrastructure): Chair, as you said, I have a request for accelerated passage for the motor vehicles (compulsory insurance) Bill and can speak to that briefly. I was, however, going to give a very short introductory statement that covers the January monitoring round and the future issues. I suggest that I give that overall statement, and we can then work through the issues.

The Chairperson (Mr Buckley): Yes. We will then work through the particulars from the questioning side.

Ms Mallon: Thank you.

The Chairperson (Mr Buckley): I turn members' attention to the relevant papers in their packs. Those include the Clerk's cover memo, the Minister's briefing paper and annex A to that paper, and comments on the proposals from the Consumer Council, Motorsport UK, the Motor Insurers' Bureau (MIB) and the Association of British Insurers (ABI). The Committee also received a late piece of correspondence on the proposals from the Ulster Farmers' Union (UFU). That has been emailed to members, and hard copies are available.

I welcome Ms Nichola Mallon, the Minister for Infrastructure to the meeting. I also welcome Katrina Godfrey, the permanent secretary in the Department for Infrastructure; Jeremy Logan, the chief executive of the Driver and Vehicle Agency (DVA); and Donald Starritt from the safe and accessible travel division in the Department for Infrastructure. I think that we also have Susan Anderson, the director of finance in the Department for Infrastructure, either online or in person. She is outside the meeting. I will hand over to the Minister to begin.

Ms Mallon: Thank you, Chair. I begin by wishing all Committee members and Committee staff a very happy new year. My officials have already provided a comprehensive written briefing on the proposed motor vehicles (compulsory insurance) Bill and the need for accelerated passage. I do not intend to revisit that briefing just now, but I do want to make two very brief points to members.

The first is on my reasons for seeking accelerated passage. I assure members that I have not taken that decision lightly. My preference, as with all devolved policy issues, was to follow normal Assembly procedures for primary legislation. Unfortunately, in this instance, there was insufficient time to progress an Assembly Bill by the conventional route in the current mandate. For that reason, and given the complexities involved in drafting the legislation, I opted to explore the option of including NI provisions in the Westminster Motor Vehicles (Compulsory Insurance) Bill. That would have entailed a legislative consent motion (LCM) debate in the Assembly. Indeed, we were still pursuing that option just before Christmas. The very late decision by Department for Transport Ministers not to include Northern Ireland provisions in the Westminster Bill is regrettable, and I have expressed my disappointment to DfT Ministers. It was that decision that forced me to consider the final and only option that is open to me in the current mandate: an Assembly Bill by accelerated passage.

That brings me to my second and final point: the consequences of accelerated passage not being granted. That would mean that, until we amend our legislation, we would have a discrepancy between our domestic legislation and the case law. Domestic legislation restricts compulsory insurance to the use of motor vehicles on roads and other public places, whereas case law suggests a much wider interpretation. Once the Westminster Bill completes its legislative passage, the corresponding discrepancy in Britain will be removed. Ultimately, that would mean that the Motor Insurers' Bureau here would be vulnerable to claims brought by victims of incidents on private land and potentially to fraudulent claims. Indeed, the making of the Westminster Bill will serve to highlight the continuing discrepancy in Northern Ireland.

If progressed by accelerated passage, the Bill will provide clarity in the marketplace and remove the risk to the Motor Insurers' Bureau. If accelerated passage is not granted, the MIB will be vulnerable to additional claims, which it is not funded to discharge. Inevitably, that would also result in higher insurance premiums having to be paid by people in Northern Ireland. I therefore ask the Committee to support my request to progress the Bill by the accelerated passage procedure.

The Chairperson (Mr Buckley): Thanks, Minister. We will move now to members' questions. First, though, I will say that the issue has come to the Committee out of left field, and at a very late stage. I understand, from reading the briefing paper that there [Interruption.]

That is to inform us that the Assembly will sit in five minutes, but the Division Bells will be a feature today.

The Chairperson (Mr Buckley): The correspondence shows that there was considerable dialogue between the Department and officials in Westminster on the issue. As the Committee Chair, I think that I can say that the Committee is broadly supportive of the ultimate aims. There was the Vnuk judgement. What is the likelihood of such a case being brought? You mentioned what the likely impact would be, but have departmental officials looked at the likelihood of such a case being brought? If they have, is that why there is a desire for accelerated passage rather than for the Bill to go through the normal means at the beginning of a new mandate?

Ms Mallon: I can bring in Donald. He is the official who has been working on this. If we do not amend our legislation in the current mandate, there will be a clear discrepancy between the position in Northern Ireland and that across the water that will expose the Motor Insurers' Bureau to not only increased liability for claims but fraudulent claims. We also had to consider the impact on every person here who pays motor insurance, because, if the discrepancy is not corrected, it will lead to an estimated £50 increase in people's insurance premiums. That is across GB and NI. I am happy to hand over to Donald, if he wants to add further detail.

Mr Donald Starritt (Department for Infrastructure): It is difficult to gauge the likelihood, Chair, but one thing that we can say with certainty is that the likelihood only increases with time. With every month that passes in which we do not rectify the anomaly, the risk increases. The other factor is that the progression of the Westminster Bill draws attention to the anomaly and potentially exposes Northern Ireland as the only area that is vulnerable to the worst excesses of the original directive: a directive that is being amended even by Europe.

The Chairperson (Mr Buckley): The Consumer Council, the Motor Insurers' Bureau, the Association of British Insurers, Motorsport UK and the Ulster Farmers' Union have mentioned their real concern, which is increased consumer costs, as the Minister mentioned. That is something of concern to the Committee. On a more technical note — perhaps Donald will answer this — will the Bill include any delegated powers leading to subordinate legislation? If so, to what aspects of the Bill will they relate? To what type of Assembly procedure would they be subject?

Mr Starritt: No subordinate legislation would be required. It will be a short Bill, albeit quite complex and technical. It will simply preserve the status quo. It will ensure that compulsory motor insurance in Northern Ireland remains confined to the use of vehicles on roads and other public places, and it will disapply any case law that might challenge that interpretation.

The Chairperson (Mr Buckley): Should accelerated passage be approved, when would the Bill come into effect? What is the earliest date on which the Bill would come into effect, should it be introduced early in the next mandate through normal Assembly procedure? What would be the likely impact of a delay? You have touched on the delay aspect, but what difference would there be in the timescale if the Bill had to go through the normal procedure?

Mr Starritt: The Bill, with accelerated passage, would hopefully be through in March, and there would then be a two-month delay between the Final Stage and its receiving Royal Assent. That typically takes six to eight weeks. In that scenario, we would expect the Bill to become law by May 2022. If we were not to go down that route, and were instead to go down the conventional route, it would take us into the next mandate. Typically, a Bill takes a minimum of nine months to a year to proceed along the conventional route, so you will see that doing that would add considerably to the timeline.

The Chairperson (Mr Buckley): What consideration, if any, has the Department given to unintended consequences of the legislation?

Mr Starritt: As I said, the Bill preserves the status quo. It makes sure that nothing changes in domestic law.

That does not necessarily mean that, further down the road, consideration cannot be given to whether the current statutory provision is correct. It does mean, however, that any consideration will be done in a controlled manner, with a full consultation and full consideration of the consequences. What we are trying to do now is to avoid any unintended consequences.

The Chairperson (Mr Buckley): OK. I will open the meeting up to members. Does any member have a point to raise? I will bring in Andrew Muir. Sorry, I have a list.

Mr Muir: That is OK.

The Chairperson (Mr Buckley): Apologies. I will go to Cathal Boylan first.

Mr Boylan: Thank you, Chair. You are very welcome, Minister. Happy new year to you —

Ms Mallon: Happy new year, Cathal.

Mr Boylan: — and your departmental officials. I will go to you first, Minister, before going to Donald. Can you clarify exactly why we are not proceeding with the LCM process? We have used it here before. Whether we believe in it, sometimes we need it. The outcome of that discussion is a wee bit disappointing. We are trying to work with Westminster.

Ms Mallon: Our view was that that was a viable route. My officials were working with DfT officials. A private Member's Bill (PMB) is working its way through Westminster, and our understanding was that we could have Northern Ireland provisions included in it. Prior to Christmas, I circulated an Executive paper to colleagues outlining that I was going down the LCM route. It was only after that that we found out, almost at the last moment, that doing that was no longer considered to be viable. We understand that it was not considered to be viable because Ministers in DfT did not want to increase any risk that the Bill would not be brought forward, so they took a cautious approach. That then left us with no other option but to seek accelerated passage. I am very disappointed in that approach. I then had to submit a revised Executive paper on accelerated passage. I have written to Ministers in DfT to express my concern, because we were working with them, and it had been our intention to pursue the LCM route. We are now left in the position in which we have no other option, given the time that remains in the mandate, but to seek accelerated passage, which, for me, is never, ever the preferred way of doing business.

Mr Boylan: No, and I asked the question in that context. We know that we always argue over accelerated passage in the Chamber. It is disappointing in this case, primarily because the issue came out of Westminster. Thank you for that answer.

Donald, the Motor Insurers' Bureau, in its letter, states that the EU is taking steps to remove the ruling. Have you any comment to make on that?

Mr Starritt: The EU is amending the directive. It has completed that process, and the amended directive was adopted in December 2021, just before Christmas. Member states have two years in which to implement it, although we understand that a number of them want to do so more quickly, simply because a number of member states have a similar anomaly to what we have in Northern Ireland. Regarding the directive that we remain subject to, I suppose that the point to make is that, because we left Europe, we took with us, if you like, the implications of the directive as it applied at the time of exit. We are therefore potentially vulnerable to a very wide interpretation of the directive, so "vehicles" could extend to ride-on lawnmowers and buggies, and their use on private land. The EU has moved away from that with the new directive. We, however, left before that directive was adopted and took with us the case law that applied at the time. That is why there is increased urgency to work to disapply that case law.

Mr Boylan: I was trying to imagine a scenario in which that would apply, but you have mentioned it: private land. The original directive impacts on other jurisdictions in some way, but not in the same way as it impacts on us. Is that what you are saying?

Mr Starritt: Yes. Ireland will be in a similar position, but it will be implementing the amended directive.

Mr Beggs: This has been an issue of concern since I tabled questions to the Minister last February. I am pleased that, finally, we are moving forward with it, because there is a huge cost implication for every vehicle owner in Northern Ireland — a £50 a year increase in insurance costs — if we do nothing. There seems to be clear support for the Bill. Accelerated passage is not a good way in which to introduce legislation, so, rather than have us invent something new that may be problematic, will our Bill mirror the legislation that has at least been scrutinised in detail at Westminster and completed its Committee Stage?

Ms Mallon: The purpose of the PMB at Westminster is really to maintain the status quo. That is exactly what our Bill, via accelerated passage, would do.

Mr Beggs: When a Minister comes before a Committee seeking accelerated passage, we are normally given a copy of the draft legislation so that we know what we are saying yes to. I am content to say yes in principle, but I will need to see the draft Bill before I can say definitively that I will support it.

Ms Mallon: I fully respect that. The first draft of the Bill is complete, I understand. Work is ongoing, and we will get a copy to the Committee at the earliest opportunity.

Mr Muir: Happy new year to everyone. In principle, I support accelerated passage in the circumstances that have been outlined. I have seen the correspondence from different bodies advocating the Bill's passage.

It crystallises for me why we need to see through this mandate. There is important legislation to be passed. I am very aware that whoever is returned in the election in May needs to get back into this place and get cracking on all the work that needs to be done.

Does the Minister agree that it is important that we see through the mandate to ensure that legislation such as this is passed? If it is not, that will have a serious impact on the citizens of Northern Ireland.

Ms Mallon: I absolutely agree. We have talked about the ramifications if we do not correct the anomaly. Even if we are talking about people who pay their insurance, we also have a growing cost-of-living crisis. The last thing that people need on top of that is to have their insurance premiums increase. This is only one of a number of issues that the Department is seeking to resolve. Members know that critical legislation has come forward from across a number of Departments, as well as from private Members. It is therefore crucial that we utilise every minute and second of what remains of the mandate to improve the lives of our citizens and that we hit the ground running in the new mandate so that we can continue work that is being progressed and also bring forward a comprehensive suite of legislation to improve our public services and the lives of all our citizens.

The Chairperson (Mr Buckley): No other members have indicated that they wish to ask questions on the topic. The Committee has heard from departmental officials and the Minister, and we will consider an appropriate response.

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