INFURIATING INSURANCE LET-DOWN FOR BRITISH BUSINESS - COTTER

2.09.54pm BST (GMT +0100) Tue 3rd Jun 2003

Brian Cotter MP, Lib Dem Shadow Minister for Small Business

Responding to the reports published today by the Department of Work and Pensions and the Office of Fair Trading into liability insurance, Brian Cotter MP, Liberal Democrat Spokesman on Small Business, said:

"The findings of the Department of Work and Pensions report are difficult to comment on, because there is absolutely no substance to them whatsoever."

"It's like the Emperor's new clothes – there is simply nothing there. What is clear is that the Government has no appetite to deal with this issue. It's infuriating. Business is crying out for action and the Government, after 6 months of mulling over the issue, has done nothing but conclude that there is a problem.

"In its report, the DWP admits that there will be further price increases in 2003 and that many businesses may not be able to absorb them. However, the Government is planning no immediate action to alleviate this problem. There is nothing on Insurance Premium Tax and there is no firm action to be taken on the "no win no fee" culture."

"Bizarrely, the only action the Government has taken on Employers' Liability Compulsory Insurance (ELCI) is to make it more expensive by legislating for NHS costs to be recovered from it.

"I welcome the limited recommendations put forward by the OFT; namely increased renewal periods, improved risk management, and the need to address the legal fees issue. But these mean nothing without Government action."

"The Government obliges firms by law to have ELCI, therefore it is the Government's responsibility to take action now to make ELCI viable. Business simply cannot wait until the autumn."