Government Will Be Held Liaable If Insurance Reforms Fail To Halt Rising Costs - Cotter

12.00.00am GMT Thu 4th Dec 2003

The Liberal Democrats have given a cautionary welcome to Government plans aimed at defending small firms from rising insurance costs, but have warned that employers will expect meaningful reductions in premiums, which have soared by up to 500% or more in the last year.

Commenting on today's Department of Work and Pensions report on Employers' Liability Compulsory Insurance, Lib Dem Small Business Spokesman, Brian Cotter MP said: "Whilst today's measures will bring some relief to thousands of small businesses that are struggling against hefty insurance rises, it is imperative that they feel the benefit of these initiatives as soon as possible. Responsible businesses reducing risk must be rewarded with a real reduction in costs."

"I am alarmed that Ministers continue to ignore industry figures which reveal that up to 13% of businesses are currently operating illegally, because they can neither afford, nor access legal cover. It is essential that these reforms enable the market to provide insurance to smaller firms at a competitive price."

"Businesses already face increases of up to 8% under Government proposals to recover NHS costs and whilst these plans have been postponed, real improvements must be seen before further burdens are placed on small employers."

"It is also important that minimum notice periods implemented by the industry are firmly adhered to. I expect the Government to monitor this and to take firmer action if this does not happen across the board."