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interesting ideas, some of which i agree with other i don't.
while your assumption that everyone with a modded car is a complete moron with absolutely no driving skill whatsoever is mostly true, its not always the case. i myself am 17 and have a citroen c2 (saxo replacement basically) which i have started doing up subtly (im not going to make it hideous i promise!) and i dont think i drive like an idiot. in fact most of the time i drive like an old granny trying to see how high i can get my mpg, whereas i know of and have seen lots of older drivers driving like complete w**kers so its not just young people, although i do agree its the majority.
restriction sounds like a good idea, it would also stop every young lad (me included) trying to out do their mates by having a faster car. if their all 1.2 their all roughly going to be the same speed (very slow!).
i also agree about the "you get 3 points and your insurance goes up £200", its an incentive to drive sensibly.
the cars being crushed seems a bit OTT. maybe just their impounded with a hefty release price £500-£1000, in that region??
if things worked this way, every young driver would get a chance to prove themselves as sensible and not automatically put in a stereotypical class of stupid drivers. but it also means, if you are being a c0ck, you have to pay for it, HEAVILY!!
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