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Govt move 'may precipitate rise in uninsured driving'



A measure that may be implemented by the coalition government could lead to a rise in uninsured driving, it has been suggested.

There is speculation that the Conservative/Liberal Democrat coalition is to increase insurance premium tax in the Budget to be revealed tomorrow (June 22nd).

Such a development would not be welcome, according to the AA, which has written to the economic secretary to the Treasury Justine Greening warning her of the possible problems it could cause.

According to AA president Edmund King, raising the levy would disadvantage many of the most vulnerable consumers in the UK.

He said: "Car insurance premiums are under severe pressure as insurers struggle to recoup losses brought about by increasing fraud, personal injury claims and poor investment income."

If the duty rises, more people may not bother seeking cover at all in order to reduce the cost of driving, he added.

The government, which assumed power following the general election last month, is expected to announce a number of tax rises as a means of reducing the deficit.

Posted by James Walsh
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