A cab driver boss fears taxi firms will be driven out of Bradford if insurance companies insist on keeping their premiums sky high.

Khurram Shehzad, who runs Manchester Road Taxis, said he has had to reduce his fleet of cars to five from 13 because he cannot afford the insurance premiums, which have risen from £1,800 per car per year in 2011 to £3,500 per car this year.

He fears he will have to move elsewhere if premiums keep going up.

“False whiplash and fraudulent claims are affecting the innocent people that are out there trying to earn a livelihood for themselves and their family,” he said.

“It has come to a stage now where drivers are registering in other boroughs, which is giving them an average saving of 60 per cent on insurance costs.”

Mr Shehzad said his problems started when a passenger claimed on his policy, causing his premiums to nearly double.

“I am going to eventually be left with no alternative but to sell my vehicles,” he said. “It is easy for an insurance company to say ‘no quote’, but what about the drivers that are going to go off the road?

“A number of drivers I know are out of work and have had to go to the job centre looking for other sources of work and this is hard for them, as they do not have a wide variety of skills as driving is all they have known.

“Unless something is done to change the way licensing is carried out it will mean a number of drivers losing their livelihoods.”

Bradford East MP David Ward (Lib Dem) said: “The good news is we are making progress.

“The spiral of ever-increasing premiums was out of control, but I do think we are managing to control it now. The spiral has been broken with us tackling referral fees and legal costs.

“We are also successfully dealing with uninsured drivers, but the most important thing is that the Government, mainly through pressure from the Transport Select Committee, is doing something and taking it seriously.

“We now have a fraud unit and last June, a change in the law saw insurers link up with the DVLA to look at uninsured drivers. Things are heading in the right direction, but we need to see premiums keep coming down, not increasing.”

Councillor Ralph Berry, (Lab, Wibsey) who has been contacted by Mr Shehzad, said: “I believe there is a serious problem in the way the insurance market is working and treating Bradford.

“This needs to be tackled by Parliament as I believe the impact is damaging to the city.”