HC Deb 17 January 1996 vol 269 cc731-2
9. Mr. John Greenway

To ask the President of the Board of Trade what is his latest assessment of the value to the United Kingdom of overseas earnings from insurance and financial services. [7893]

The Minister for Competition and Consumer Affairs (Mr. John M. Taylor)

It has been estimated by British Invisibles that net overseas earnings of the UK financial sector rose by nearly a third in 1994 to £20.4 billion, of which net overseas earnings by insurance institutions contributed £3.9 billion.

Mr. Greenway

Will my hon. Friend join me in congratulating the London Insurance and Reinsurance Market Association on its fifth anniversary yesterday and on the success achieved in that time at the new London underwriting centre, which has contributed to the excellent news that he has announced? When I asked leading members of the association yesterday what concerned them about the future, I was told that it was European monetary union. It seems that they are as ambivalent about it as the House is. They said, however, that in view of the complexities of a single currency for London-based insurers it is vital that the Government remain central to the discussions about EMU. Will my hon. Friend bear those concerns in mind?

Mr. Taylor

I certainly will. I join my hon. Friend in congratulating LIRMA on its fifth birthday. He will know better than me that the main currency of reinsurance is US dollars, but the London market is well used to dealing in multiple currencies. My Department stays in close touch with the industry. I agree with the prudence of staying close to all negotiations in Europe.

Mr. Olner

Although I welcome the earnings that insurance companies bring into the country, does the Minister agree that Baroness Thatcher was completely and Utterly wrong when she thought that all this country's benefits could in future be supplied by the insurance industry and not the manufacturing industries, whose capacity we have lost year after year?

Mr. Taylor

I think that it is appropriate for me to tell the House that the UK has an extremely successful insurance market. London is the world's leading insurance centre. The Department of Trade and Industry, with secondees from the industry, is working with insurers to maintain our competitiveness: this includes a major benchmarking initiative to spread best practice throughout the industry; making the best use of new technology; and improving management development and training. Insurance is a major British success.