HC Deb 05 December 2002 vol 395 cc1031-2
2. Brian Cotter (Weston-super-Mare)

What recent discussions she has had with manufacturing firms on the cost of public and employer's liability insurance cover. [83603]

The Parliamentary Under-Secretary of State for Trade and Industry (Nigel Griffiths)

DTI Ministers have had a number of meetings with firms and with business bodies at which the cost of public and employer's liability cover was discussed. I recently met representatives of the Federation of Small Businesses and the Forum of Private Business, both of which raised the issue. My DTI colleagues have met other industry bodies.

Brian Cotter

Bearing in mind the fact that Axa Insurance has today announced that 210,000 small firms are operating without employer's liability, and therefore illegally, will the Minister ask the Department for Work and Pensions to carry out its review urgently, ensure that it covers issues such as competitive practices and consistency of cover, and ensure that firms are given proper notice when the insurance basis is to be changed?

Nigel Griffiths

I will certainly ensure that my colleagues in the Department for Work and Pensions are aware of those issues and carry out a comprehensive and effective review.

John Cryer (Hornchurch)

I have had discussions with companies in my constituency, mainly building and scaffolding firms which report that their premiums are going up four and five times over a year. That is clear profiteering by the insurance industry, which blames 11 September, but what 11 September has to do with scaffolding I cannot imagine—it escapes me. The industry is using 11 September as an excuse, and unless 'we intervene to stop this naked profiteering, small and medium-sized firms will go under because of it.

Nigel Griffiths

My hon. Friend makes a good point. On 25 September, my hon. Friend the Minister for Energy and Construction met the National Federation of Demolition Contractors, which put points forcefully lo him. It is important that spurious reasons are not given for driving up the cost of insurance. We have been working with the Association of British Insurers and the British Insurance Brokers Association to examine how small and other firms can be covered by liabilities insurance and how giving spurious reasons for not providing cover can be avoided.

Mr. Henry Bellingham (North-West Norfolk)

The position is obviously extremely serious and I am grateful to the Minister for what he is doing, but there are a lot of horror stories out there. What does he say to the Humberside family run steel fabrication business, which is, I believe, in the constituency of the Deputy Prime Minister, that has been forced to make five people redundant and cease trading because its combined public liability and employer's liability bill has increased from £3,600 to £28,000?

I am well aware that the Minister cannot control market forces, but has he spoken to the Chancellor about the huge £300 million increase in the insurance premiums tax take? Could a cap be put on that take and some of the surplus paid back to business? Could not that money be used to provide a pool of employer's liability insurance, backed by the Government—

Mr. Speaker

Order. The question is far too long.

Nigel Griffiths

I welcome all practical and constructive suggestions, and I have met my colleague the Financial Secretary as well as my right hon. Friend the Secretary of State for Work and Pensions on this matter. The House will have been pleased to hear the Chancellor announce last week a review of the employer's liability insurance scheme. The impact on manufacturing and on the type of firm referred to by the hon. Gentleman will be important parts of that review.