§ Andy KingTo ask the Secretary of State for Trade and Industry (1) what plans she has to meet representatives of the building, construction and roofing industries to discuss the level of insurance premiums; [85824]
(2) what assessment she has made of the impact of changes in insurance costs on construction and building (a) profitability and (b) training; [85826]
(3) what her Department estimates will be the impact on employment in the construction industry as a result of changes in insurance premium tax. [85822]
§ Mr. WilsonEarlier this year my hon. Friend the Minister for Construction met my noble Friend Lord Pendry and a delegation from the National Federation of Demolition Contractors (NFDC) to discuss rising insurance premiums and the impact on the demolition industry. There have also been a number of meetings between construction industry trade associations and my officials to discuss concerns about increased premiums in the Industry. We are keen to have the views of all affected industries, including building, construction and roofing, on the forthcoming review of the Employer Liability Insurance scheme being led by the Department of Work and Pensions. This review was announced by my right hon. Friend the Chancellor of the Exchequer in his pre-budget report and further details will be announced shortly.
There is no simple answer to the impact of changes in insurance costs on construction and building profitability or levels of training.
The rise in insurance premiums is due to a number of factors, including the rise in the use of litigation, insurance companies clawing back losses from previous years (September 11 effect); a change in risk profiles within industries (effect of asbestos risk and other occupational injuries within construction); and better modelling of individual company risk. We do not yet know, however, which of these effects predominates.
The impact on profitability and training will depend on which of these effects predominates.
There has been no change to the current 5 per cent. rate of insurance premium tax (IPT) since July 1999. I am not aware of any impact on employment in the construction industry as a result of changes to the IPT rate before that date.