HL Deb 29 July 1997 vol 582 cc91-2

2.51 p.m.

Baroness Miller of Hendonasked Her Majesty's Government:

If insurance companies are required to pay the "full cost of treating road traffic accidents" as announced in the Budget Statement and pass that cost on to policyholders by way of increased premiums, what effect that will have on the cost of living index and the overhead cost to public transport, the transport of goods and to trade and industry generally.

Baroness Jay of Paddington

My Lords, under Section 157 of the Road Traffic Act 1988 insurance companies are already obliged to pay the costs of treating road traffic accidents for those who make insurance claims. In the Budget Statement my right honourable friend the Chancellor of the Exchequer announced the intention to ensure that hospitals actually collect those payments that are due to them. The proposal is to make the process of recovering those sums easier. There will probably be some administrative costs attached to that, but improving efficiency will not have the widespread implications suggested by the noble Baroness.

Baroness Miller of Hendon

My Lords, as the Minister says, there was always a right to recoup some of the costs. But how do the Government reconcile the new proposal—the extra collection mentioned by the Minister—with the principle that the National Health Service should be free at the point of delivery, particularly in view of her answer to the previous Question? Also, do the Government have any plans to extend the new tax to other claims against insured third parties for matters such as breaches of safety at work, defective goods or premises, or indeed for train accidents?

Baroness Jay of Paddington

My Lords, I am grateful to the noble Baroness. To take her second point first, it is true that the Law Commission made some recommendations on the wider use of this type of recovery of payment. For example, its proposal said that anyone responsible for accidents through negligence should bear the costs. My right honourable friend the Secretary of State told the Law Commission that he is looking at those proposals. As to the specific of the road traffic accidents, it is the insurance companies who pay the costs, not individual patients.