Government plans to prevent a controversial EU insurance rule from becoming part of British law have been welcomed by the industry. The Association of British Insurers (ABI) says ditching the European Union’s ‘Vnuk’ motor insurance law would prevent motorists from footing “unnecessary” bills.

The Vnuk laws have never been implemented in the UK, but they were set to become British law as part of the nation’s EU membership. Had the rules been enforced, they would have seen a wider range of vehicles require insurance, and insurance would also have been needed for vehicles on private land.

That would have meant golf buggies, mobility scooters and quad bikes would have required insurance, as would ride-on lawnmowers. The law would also have covered motorsport, with racing accidents treated as road traffic accidents, and therefore involving police intervention. The government says the law would have “decimated the [motorsport] industry”, costing £458 million a year.

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However, since the UK has left the EU, the government is able to scrap the regulations – a move it claims will save the insurance industry around £2 billion. With those costs likely being passed on to consumers, the Department for Transport (DfT) reckons ditching the Vnuk law will prevent an estimated £50 increase in consumers’ insurance premiums.

“We have always disagreed with this over-the-top law that would only do one thing – hit the pockets of hard-working people up and down the country with an unnecessary hike in their car insurance,” said Transport Secretary Grant Shapps. “I am delighted to announce that we no longer need to implement it.”

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The plans were welcomed by the ABI, which said the regulations were open to fraud and would ultimately cost motorists money.

“We welcome the Government’s plan to scrap this unnecessary requirement,” said the ABI’s head of general insurance, Mark Shepherd. “This should happen as quickly as possible. “There would have been no easy way to monitor compliance and enforcement for those using their vehicles on private land. It would also have been difficult to establish the circumstances of any claim, so increasing the scope for fraud, that ultimately ends up being paid for by motorists through their insurance premiums.”

Motorsport UK, the organisation in charge of motor racing on these shores, hailed the plans as a “significant victory” for the sport.

“Today’s announcement is a hugely significant victory for the UK and our sport, after a considerable effort by Motorsport UK and the DfT over several years to defeat the threat of the Vnuk insurance issue,” said David Richards, the chairman of Motorsport UK. “This decision provides stability as we seek to progress our sustainability agenda and protects the UK’s preeminent position at the forefront of motorsport technology worldwide.”