The Government has created a new taskforce to crack down on the spiralling costs of car insurance.

The cross-government motor insurance taskforce will root out the causes of rising costs and agree solutions

Convened by Transport Secretary Louise Haigh and Economic Secretary to the Treasury Tulip Siddiq, the taskforce will bring together industry groups and consumer champions such as the Association of British Insurers (ABI) in a move to deliver a fairer deal for drivers.

UK motor insurance premiums have grown by an average of 21% since June 2022, according to Financial Conduct Authority (FCA) analysis – far higher than in comparable economies such as Germany, France, Spain and Italy.

The new cross-government motor insurance taskforce, supported by industry experts, will root out the causes of rising costs and agree solutions to keep costs under control.

Factors driving up the cost of insurance include inflation, rising car thefts and the country’s pothole-ridden roads, which Labour has pledged to fix with its manifesto pledge of filling up to one million more potholes every year.

The taskforce also aligns with the Government’s manifesto commitment to act on the high cost of insurance for drivers – particularly those who are disproportionately affected by high prices such as young and older people and those from ethnic minority backgrounds or on lower incomes.

Transport Secretary Louise Haigh said: “Car insurance is an essential, not a luxury. It is vital to accessing economic opportunities and this government is committed to getting costs under control. That’s why we’re taking direct action to bring insurance companies and regulators round the table to discuss how we can crack down on spiralling costs.”

ABI director general Hannah Gurga commented: “While average premiums have fallen recently, there should be no loss of momentum on tackling costs and we look forward to bringing ideas to the taskforce table, building on the 10-point roadmap we released earlier this year.”

The taskforce will bring together expertise from regulators, motoring groups, insurers and consumer groups to find solutions for the high cost of insurance

The new taskforce already has the backing of many across the motoring sector.

IAM RoadSmart’s Nicholas Lyes, director of policy and standards, said it was a welcome step and pointed out that recent increases in premiums have had a disproportionate impact on younger drivers.

“Our research shows that between 2022 and 2023, the number of drivers aged 17-20 with insurance offences added to their licence increased by a quarter, meaning that eyewatering premiums may be tempting some to avoid taking it out in the first place. We support measures that encourage incentives such as lower premiums for those younger drivers taking additional training and this option should be considered as part of the solution.”

Electric vehicle campaign group EVA England said the taskforce would bring urgently needed protection for EV drivers.

James Court, chief executive, elaborated: “While EVs break down much less often, when they do EV drivers are especially at risk, in experiencing some 72% increases in premiums in the worst of cases. We must tackle the deeper underlying roots behind these rises, stemming from a lack of skills for mechanics, supply chain issues and a lack of long-term data.

“We’re finding that EV drivers in particular are experiencing longer repair times and higher costs than petrol and diesel owners, for instance, all of which are feeding into higher EV premiums.

“We stand ready to support the Government in identifying these root causes and putting this growing issue to rest.”