Labour launches plan to support drivers through the cost of living crisis and to fix our broken transport infrastructure
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Today, Louise Haigh sets out Labour’s plan to support drivers as
millions of people across the country hit the road to head home for
the Christmas period. Labour will tackle soaring
insurance costs that are exacerbating the cost of living crisis
hammering drivers across the country and take action to fix our
crumbling infrastructure and clogged roads. This
comes as the latest consumer price inflation statistics from the
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Today, Louise Haigh sets out Labour’s plan to support drivers as
millions of people across the country hit the road to head home
for the Christmas period. Labour’s Plan to Support Drivers 1) Save drivers hundreds of pounds by cracking down on unfair car insurance costs Car insurance costs have soared by 51% over the past year[5], with premiums at their highest level since early 2018[6]. This has far outstripped inflation. It is estimated that over a million people cancelled their car insurance in 2022 because of cost of living pressures[7], and Which? estimates that letting car insurance policies auto-renew without confirmation or opportunity to compare policies with other providers could be costing drivers up to £388 a year[8]. Labour will crack down on unfair costs by: Consulting with industry on ways to crack down on unfair practices from insurers, such as a lack of transparency over autorenewals, the rise of hidden fees, and poor value of insurance products Ordering the Competition and Markets Authority and Financial Conduct Authority to launch urgent investigations into the rising cost of car insurance Cracking Down on Unfair Car Insurance Practices Labour will consult with industry and consumer groups on ways to crack down on unfair practices from insurers, such as a lack of transparency over auto-renewals, the rise of hidden fees, and poor value of insurance products. It is estimated that over a million people cancelled their car insurance in 2022 because of cost of living pressures[9], and Which? estimates that letting car insurance policies auto-renew without confirmation or opportunity to compare policies with other providers could be costing drivers up to £388 a year[10]. But right now, too many drivers are getting a bad deal from their insurance: One in five drivers currently let their car insurance policies auto-renew without comparing offers[11], meaning millions of drivers could be losing money to insurance subscription traps each year Hidden fees are on the rise with 48% of standard car insurance policies now including a set-up fee, compared with just 21% five years ago. The average fee is £40.02, which has gone up by 25% since 2018[12] The FCA has found that many insurance firms are not providing good value to customers, with pay-outs at unfairly low rates[13] Labour would consult with industry on ways to ensure a better deal for drivers to ensure they do not lose out to unfair practices. Options consulted on could include: Mandating car insurance providers to offer clear alternatives to policies that auto renew, giving consumers a right to choose the policy best for them (existing FCA guidance already suggests clear explanations of the impact of auto-renewal for vulnerable customers[14]). Updating existing guidance on good practice for notifying consumers of changing cost of car insurance policies and providing more upfront transparency over prices to tackle hidden fees. An extension to the existing 14-day penalty-free cancellation period for car insurance[15]. Ordering the FCA to crack down on poor value insurance products with low pay-out rates[16]. By taking steps to tackle unfair practices and hidden fees, Labour’s plan could save drivers hundreds of pounds per year by allowing them to choose the insurance policy that is right for them. Investigations Into Rising Costs Labour will also launch formal CMA and FCA investigations into the soaring costs of car insurance. The scope of these investigations would cover: Whether rising costs are proportionate to cost pressures faced by insurance companies The growing prevalence of hidden fees The use of unfair postcode pricing High insurance costs for electric vehicle drivers and refusals to insure electric models The growing prevalence of hidden fees is driving up car insurance costs. This includes hidden set up fees, charges to change policies or to cancel car insurance subscriptions[17]. Unfair postcode pricing is also potentially leading to higher costs[18]. Consumer rights organisations have repeatedly warned are imposing “poverty premium”[19] or an “ethnicity penalty” of up to £280[20] where differences in pricing go beyond typical risk factors of crime rate, deprivation, road traffic accidents and population density[21]. Finally, Labour would order the CMA to investigate the refusal from many insurance firms to cover popular electric vehicle models[22] and the soaring costs of insurance quotes offered to many electric vehicle drivers[23]. There is already precedent for such investigations, after the CMA investigated the private motor insurance market in 2015[24] and instances of hidden fees[25]. The FCA has also previously said it would consider “potential further work” on “correlations between profit margins and the racial composition of local geographic areas”[26] but has failed to do so. The CMA would be expected to make recommendations to Government on whether these rising costs are fair to consumers, and how to tackle them. 2) Reduce traffic by providing better public transport options Labour will relieve congestion faced by drivers on a daily basis by improving the state of our public transport network. Levels of congestion have now returned to the record highs seen pre-pandemic[27], and the shocking state of our public transport networks has meant fewer and fewer people able to rely on a train or a bus. This has pushed more cars onto our roads and made congestion worse for all drivers. Labour will improve the quality of public transport and reduce traffic by: Bringing our railways back into public ownership and ensuring every decision is tested against the interest of the passenger. Giving all local authorities the power to take back control of their bus services through franchising and municipal ownership, giving local authorities control over routes and fares to improve services. Promoting the use of rail freight[28], which has lower carbon emissions and means fewer heavy vehicles holding up traffic and wearing down our roads. More reliable public transport services, and less heavy freight on our roads, will mean less traffic, faster journeys, and fewer potholes. 3) Remove planning barriers to ensure upgrades to our transport networks are actually delivered Labour will reform our broken planning system to ensure upgrades to our transport infrastructure are actually delivered. Under the Conservatives, the state of our roads is shocking – with the estimated one-time catch-up costs of fixing our crumbling roads soaring from £11.6bn in 2014 to a shocking £14bn in 2023[29]. Rishi Sunak has now re-announced several new rail and road upgrade schemes[30], many of which have been delayed several times before. But he has no plans to remove the roadblocks that have stopped these upgrade schemes actually being delivered. The planning process has grown cumbersome and slow, with the timespan for development consent orders increasing by 65% since 2012 and now taking over four years[31]. Many vital transport infrastructure schemes have been delayed due to the UK’s snail’s pace planning regime, or the reluctance of Ministers to make a final decision. This had led to soaring costs and delays for transport infrastructure projects like HS2. As set out by Rachel Reeves, Labour has a plan to accelerate infrastructure delivery. As part of this, Labour will extend reforms in the Levelling Up and Regeneration Bill and the action plan for the Nationally Significant Infrastructure Project regime to the Transport and Works Act, Highways Act (which covers creation and maintenance of highways) and the Hybrid Bill process. This would speed up the process for transport infrastructure improvements by placing statutory limits on the duration of public inquiries, planning inspectorate recommendations and Government decision making, and provide the option to fast-track strong applications through the planning process. 4) Accelerate the charge-point rollout to give drivers confidence no matter what type of vehicle they drive Drivers need to have confidence in their ability to travel long-distances and refuel easily, no matter what type of vehicle they drive. Yet many electric vehicle drivers do not have this confidence due to the botched rollout of charge points. Labour will accelerate the electric vehicle charge-point roll-out by setting new binding targets, releasing and redirecting existing charge point funding to ensure there is reliable charging coverage whenever you are in the UK and removing unnecessary planning barriers that delay projects going ahead.
Setting New Binding Targets for Electric Vehicle
Charge-points However, this is not a binding commitment and there are no national targets in place to ensure that these chargers are delivered or that they are distributed fairly across the regions of the UK. Labour would change this by setting new, binding targets for electric vehicle chargepoints to boost the rollout. Removing blocks in the planning system Currently, planning permission is not required for slower AC chargers, but it is required for rapid DC chargers due to height restrictions in the Town and Country Planning Act (2015)[33][34]. The Government itself admits that “planning permission delays are often cited as a major brake on the speed of deployment” and as charge-point installation scales up this will create a significant administrative burden[35]. Labour would remove these unnecessary barriers to fast charging infrastructure by exempting chargers from this height threshold. Redirecting Existing Funding to Left Behind Regions
In March 2020 the Government announced a £950m Rapid Charging
Fund (RCF), which would cover the prohibitive cost of grid
connections for charging infrastructure, but over three and a
half years later only £70m of that funding is set to be released
through trials of the scheme[36]. Sources
[1] https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/l7je/mm23 |