HC Deb 12 December 2002 vol 396 cc392-4
11. Tony Cunningham (Workington)

What steps he is taking to protect small businesses from increases in insurance costs. [85258]

The Economic Secretary to the Treasury (John Healey)

The Government are aware—as are hon. Members on both sides of the House—of the recent rises in insurance premiums. Following wide discussions, including with the Treasury, the Department for Work and Pensions has now begun a formal review of the operation of employers' liability insurance, the consultation on which is to be completed by the end of February. On Tuesday this week, the Office of Fair Trading announced a fact-finding study into the wider market for liability insurance.

Tony Cunningham

I met a constituent recently who has a climbing wall in Keswick. Last year, his insurance premium was £1,600; this year, it is more than £10,000. I welcome the long-term review, but will the Minister tell the House what is being done in the short term to help constituents such as mine?

John Healey

I recognise the importance of such firms in my hon. Friend's constituency and, more broadly, in Cumbria. The Government cannot, of course, intervene in relation to the terms and conditions of insurance policies or in individual cases. The Department for Work and Pensions is conducting its review, and the Government have also emphasised to the Association of British Insurers the importance of the problem that my hon. Friend has starkly illustrated. The association is now working closely with brokers, business bodies and trade associations to maximise the availability of affordable insurance for precisely the kind of firm that my hon. Friend has described. He might like to encourage his constituent to investigate that matter further.

Mr. David Heath (Somerton and Frome)

Does the hon. Gentleman not understand the urgency of this? Businesses in my constituency and across the country are having to cease trading because they simply cannot get the insurance that the law requires them to have. In cases in which there is a requirement for insurance and none is available, do not the Government have a responsibility to provide a form of insurance of last resort?

John Healey

Of course, the Government appreciate the problem. Every Member of the House has such firms in their constituency. I say again that it is not the Government's position to intervene in individual terms and conditions of insurance policies, or in individual cases. That is why we have been working with the Association of British Insurers to encourage it to take the action that it is taking. That is precisely the way in which we try to tackle these problems. If the hon. Gentleman has firms in his constituency that are in that position, I recommend that he suggest that they contact their trade associations, their professional bodies or the ABI, because that is the way in which we are trying to tackle the problem.