Truth at a premium

As pay rises continue to lag inflation, I wonder how many cash-strapped consumers who happen to drive are taking solace in what I like to call their ‘whiplash dividend’.

To the nearest million, if I may be facetious.

Nearly two years ago, the government declared that motorists across England and Wales would save up to £35 on their motor insurance as new rules on whiplash claims came into force. Insurers would ‘cut premiums for millions’, boasted lord chancellor Robert Buckland, as a new online portal simplified the claims process and reduced the ‘unacceptably high’ number of claims.

So what happened? We heard this week that the Commons justice committee intends to find out. A new inquiry into whiplash claims and the impact of reform will seek to determine what has happened to the number of low-value personal injury claims and whether the government has met its objective of passing on whiplash cost savings to motorists through lower premiums. 

‘We’ll be looking carefully into the way claims are being processed and how much they cost motorists and the wider tax-paying public,’ declared Sir Bob Neill, the committee’s chair. (Injured drivers pay their taxes too, I feel compelled to note.)

Might I respectfully suggest to Sir Bob and his fellow MPs that in one important respect, they are wasting their time. Institutional memory is short at Westminster – we’ve had four lord chancellors (one twice) since May 2021, after all – but the window-dressing about lower premiums was never any more than that.

In the years before the Civil Liability Act came into force, ministers variously pledged that they could deliver savings of between £35 and £90 for motorists. These pledges were empty. As far back as 2015, ministers declined to consider any mechanism that would substantiate such tabloid-friendly promises. And for good reason. Curbing whiplash claims was only ever about appeasing a powerful insurance lobby solely concerned with shoring up its profits.

By the way, insurers racked up the cost of car insurance by £100 on average last year, the biggest increase in six years. Some would have us believe the rise would have been much higher but for the Civil Liability Act. I am legally bound to buy car insurance – but I’m not buying that.