The 2017 general election changed the political shape of the House of Commons. Mathematically, the number of 650 MPs equals that of a square pyramid (144+121+100+81+64+49+36+25+16+9+4+1); although it might be said that the hung Parliament that the election has produced is not necessarily as robust as its arithmetical analogue.
At 328, the sum of Conservative (318) and DUP (10) seats would be sufficient to govern and this seems to be where matters are headed. What might these developments mean for insurance-related measures which had been shelved or side-lined pending the election?
On 28 March the Public Bills Committee heard evidence from Brett Dixon, of the Association of Personal Injury Lawyers, Rob Townend of Aviva and James Dalton of the Association of British Insurers. The context was legislative scrutiny of the whiplash measures to be found at part 5 of the Prison and Courts Bill currently proceeding in the Commons. Opening the evidence session, Sir Oliver Heald MP, Minister of State at the Ministry of Justice, asked this question: “In recent years, since 2005, we have seen a fall in the number of road accidents, we have seen safer vehicles and we have seen a more than 50% increase in whiplash-related claims. Can you put this in perspective and tell us what you think the problem is and whether you think our tariff system is going any way to solving it?”
- Following the Budget last week, we can take it as confirmed (if it needed to be) that the Chancellor of the Exchequer will not or cannot change the new rate.
- In such circumstances, he “has set aside £5.9 billion across the forecast period [to] protect the NHS from the effects of the changed personal injury discount rate”.
- The new rate of -0.75% will apply in England & Wales from 20 March unless there is a successful attempt to annul the relevant statutory instrument, SI 2017/206.
- A motion to annul this SI has been indeed been tabled, but as it has been signed by only six MPs – all Lib Dems – it looks to be going precisely nowhere*.
- This intervention by Conservative MP Jacob Rees-Mogg during the Budget debate last week – “I would encourage the Government not to proceed with the personal injury discount rate reduction to minus 0.75%.” – very probably adds no weight at all to that motion.
- However, the basis on which the new rate was derived looks set to change. A different approach could apply from some future date because the Lord Chancellor has unambiguously said she “will bring forward a consultation before Easter that will consider options for reform”.
- Our expectation is that this consultation will begin within days of the new rate taking effect, given that Parliament will rise for Easter on Thursday 30 March.
* It is virtually unknown for these to succeed. The last to do so was a generation and a half ago, according to this from the Commons Library: “The House of Commons last annulled a statutory instrument on 24 October 1979 (the Paraffin (Maximum Retail Prices) (Revocation) Order 1979 (S.I. 1979/797)).”
Written by Alistair Kinley, director of policy and government affairs