HL Deb 23 February 2004 vol 658 cc10-1WA
Lord Chadlington

asked Her Majesty's Government:

What steps they are taking to help small businesses with the rising cost of employers' liability insurance premiums. [HL1130]

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Baroness Hollis of Heigham)

The department's second stage and final report of its review of employers' liability compulsory insurance (ELCI) published on 4 December 2003 set out a range of initiatives to help small businesses. These included:

action on longer renewal periods by insurers and brokers;

a scheme called "Making the Market Work", to help trade associations and others to access the insurance market more easily;

reviewing the need to insure for 300,000 of the smallest single owner-employer companies; and

providing improved guidance and information on the new Small Business Service (SBS) website, currently being developed.

A copy of the report has been placed in the Library of the House.

Lord Chadlington

asked Her Majesty's Government:

Whether the estimate that there are 210,000 small and medium-sized companies operating illegally without employers' liability insurance premiums is correct. [HL1131]

Baroness Hollis of Heigham

No. While precise numbers are impossible to calculate we believe that the 210,000 estimate—extrapolated from a telephone poll conducted on behalf of AXA in August-September 2002—overstates non-compliance.

The Health and Safety Executive (HSE) recently commissioned a survey of 18,000 businesses. This showed:

0.9 per cent of micro firms (1 to 10 employees) reported non-compliance;

0.37 per cent of small firms (11 to 49 employees) reported non-compliance;

0.6 per cent of large-sized firms (250 plus employees) reported non-compliance.

This equates to 0.5 per cent non-compliance or about 10,000 organisations out of about 1.2 million enterprises with employees in the UK. Further research conducted by the Small Business Service (SBS) while falling short of 99.5 per cent compliance also suggests a much higher level of compliance than the AXA estimate.