So many people pay by direct debit: set up insurance, get certificate etc, make first payment then cancel. Same would happen with an insurance disc, it wouldn't mean anything, the only way to be sure is for it to be checked on a database.
The number of traffic police should be quadrupled, ANPR cameras on all forecourts which automatically shut off the pumps if a car shows as no tax/insurance/MOT, anyone found driving with no tax or insurance to get a massive fine and/or jail time, random car safety checks (I heard somewhere that 1 in 10 cars on the roads would fail MOT) all combined with a comprehensive public information drive about it and serious investment in alternative transport options.
But that's just way too expensive and too unpopular for any government to even consider...