§ Norman BakerTo ask the Secretary of State for Environment, Food and Rural Affairs what her policy is on the placing on businesses of a requirement for compulsory environmental liability insurance; and if she will make a statement [118067]
§ Alun MichaelThe Government seeks an Environmental Liability Directive that delivers clear environmental benefits and is equitable, proportionate, clear, insurable and easy to implement. In Council negotiations we have made it clear that we will not support proposals that would damage business competitiveness while lacking a clear focus on achieving environmental gain.
The assessment of the implications of compulsory financial security was carried out by my Department in consultation with business generally, with the insurance industry, and with other relevant Government Departments. It revealed that the cost to UK businesses of a compulsory insurance requirement could range from —130 million to —1.8 billion per annum. These costs would far outweigh the environmental benefits of the Directive, as evaluated in the Department's Extended Partial Regulatory Impact Assessment (COM(02)17). These factors point strongly against such a requirement. The Government's policy therefore is not to support compulsory financial security.