GOVERNMENT PLANS TO STALL ON INSURANCE ARE AN OUTRAGE - COTTER

3.32.49pm BST (GMT +0100) Mon 2nd Jun 2003

Responding to reports that the statement by Department of Work and Pensions on Employers' Liability insurance due out tomorrow will be nothing more than a call for consultation, Brian Cotter MP, the Liberal Democrat Spokesman on Small Business said,

"The Government cannot abdicate responsibility for Employers' Liability insurance. It is a legal requirement for all businesses to have it, and so it is up to the Government to make it affordable."

" It is simply unacceptable for the Government to keep business waiting any longer. Businesses are going to the wall because they cannot afford to buy insurance, and insurers cannot afford to sell it.

"The problem is not going to just go away. A report commissioned by the Government itself has shown that the construction industry has seen premiums rise by as much as 500% already, and the insurance industry are predicting that the situation is going to get worse."

"The scope of ELCI, the effect of the'No-Win, No-Fee' culture, the windfall from Insurance Premium Tax, and the link between actual risk and the cost of cover, are just some of the areas that we want the Government to tackle with much more appetite than it has shown to date."

"ENDS"

"Notes to Editors"

"A scoping study looking at the difficulties construction contractors face in obtaining insurance carried out by Davis Langdon Consultancy on behalf of the DTI has shown that contractors are facing increases of up to 500%"

"The Association of British Insurers has predicted that premiums will continue to rise over the next 12-18 months."

"Brian Cotter has been leading a campaign in Parliament calling on the Government to urgently address the insurance issue. In November he tabled a motion (EDM 146) calling on the Government to instigate an inquiry. On 27 November, in his Pre-budget Statement the Chancellor announced that such an inquiry would be carried out by the DWP. The motion has received cross-party support and to date has received 90 signatures.