HC Deb 22 June 1994 vol 245 cc224-5
9. Mr. Mike O'Brien

To ask the President of the Board of Trade when next he proposes to visit Lloyd's to discuss future Government policy in relation to the insurance industry.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton)

I maintain regular contact with Lloyd's to discuss matters of mutual interest and concern.

Mr. O'Brien

In the light of the enormous losses sustained by names at Lloyd's and the importance of the insurance underwriting business in Britain, is it not about time that the Government undertook an urgent review of the works of the Lloyd's Act 1982 and the Financial Services Act 1986 with a view to moving away from self-regulation, which has patently failed, and towards a system of proper effective statutory regulation?

Mr. Hamilton

I shall give the hon. Gentleman the benefit of the doubt and ascribe his supplementary question to ignorance rather than malice. I hope that he is not wholly unaware of all the changes that have taken place in the governance of Lloyd's in recent years, and the substantial progress which has been made in returning the insurance business generally to profitability. I wish that Opposition Members would concentrate more on supporting British industry rather than knocking it and running it down.

Mr. Hawkins

Does my hon. Friend agree that the United Kingdom's insurance industry is one of the jewels in the crown of UK plc, and that it is vital for the Government to continue to support the United Kingdom insurance industry and ensure that Lloyd's returns to success and profitability? Is it not indicative of the attitude of the Opposition that they are entirely motivated by ignorance and prejudice and a desire to run Britain down?

Mr. Hamilton

I entirely agree with my hon. Friend. I shall shortly be taking a delegation from the British insurance industry to Japan to try to break into the Japanese market, which in the past has been highly protected and controlled, because our industry is among the best and most innovative in the world and there are many opportunities for us to develop the insurance business and improve our overseas earnings.

Mr. Bell

Ignorance or malice is hardly a proper response from a Minister of the Crown who is normally courteous. If he would be kind enough to look again at the Lloyd's Act 1982, he will see that it provided for a financial institution to be above the law. That is why there has been exploitation. Are not those sufficient grounds for the Lloyd's Act 1982 and the Financial Services Act 1986 to be reviewed so that we can have full statutory regulation of Lloyd's that is both transparent and accountable to the House?

Mr. Hamilton

I certainly would not accuse the hon. Gentleman of being ignorant in this respect as he was a member of Lloyd's, but got out at the right time. However, he is misleading himself if he thinks that a system of statutory regulation might have provided a different result from that which was a consequence of the Lloyd's Act 1982. As the hon. Gentleman knows, the Committee that considered the Lloyd's Act 1982 included two Opposition Members, including the current Front-Bench spokesman, the hon. Member for Oldham, West (Mr. Meacher). It was therefore a decision of the entire House to put in place the regulatory system contained in the Lloyd's Act 1982. I believe that the changes that have been made within the framework of the Lloyd's Act 1982 will protect Lloyd's in future from many of the mistakes that occurred in the past and we look forward to the future with confidence.