§ 3. Mr. AingerTo ask the Chancellor of the Exchequer how many representations he has received on the new insurance tax.
§ The Paymaster General (Mr. David Heathcoat-Amory)I have received a number of representations.
§ Mr. AingerDoes the Paymaster General accept that since 1979 burglaries and car thefts have more than doubled and that since 1987 there has been an increase of more than 20 per cent. in the price of insurance premiums? Why then, given that information, have the Government decided at this stage to penalise the victims of crime even further and, in many cases, to impose an additional tax on people who have no source of defence other than their insurance? Why has the Paymaster General carried on with this, bearing in mind the representations that he has received?
§ Mr. Heathcoat-AmoryThe incidence of crime is certainly one factor in the level of insurance premiums, which is why it is good news that the latest figures show that, over the past 12 months, recorded crime has dropped by 5.5 per cent. and burglary and theft by rather more.
In answer to the second part of the hon. Gentleman's question, I believe that a 2.5 per cent. tax on insurance premiums does not deter people from taking out prudent insurance, bearing in mind the fact that this sector is historically undertaxed to the extent that insurance premiums do not bear value added tax.