GOVERNMENT URGED TO BRING FORWARD AUTUMN DEADLINE ON INSURANCE - COTTER

12.00.00am BST (GMT +0100) Wed 4th Jun 2003

Brian Cotter MP, Liberal Democrat Spokesman on Small Business, has today tabled a motion calling on the Government to take immediate action on Employers' Liability Compulsory Insurance. In particular the motion draws attention to the issues of Insurance Premium Tax, the need to introduce measures to limit the scope of ELCI and the effect of the 'No-Win-No-Fee' culture on the cost of insurance for business.

Commenting on the Motion, Mr. Cotter said: "The DWP report has done little to improve the situation in which thousands of businesses find themselves. I have tabled this motion in order to press the Government to act sooner rather than later over this crucial issue. "

"I would like to see a stronger link between risk and cost. At the moment there is no incentive for businesses to keep the workplace safe, as there is no financial reward for maintaining a high standard of safety. The Government must also take action to reduce legal costs."

"I also want to draw the Government's attention to the report carried out by Davis Langdon Consultancy on behalf of the DTI which revealed that premiums within the construction industry have already risen by as much as 500%. "

"The cost of insurance is just going to carry on soaring until the Government takes the matter seriously." "

"ENDS"

"Notes to Editors "

"GOVERNMENT RESPONSE ON INSURANCE COSTS 03.06.03"

"That this House notes that the findings of the report published on 3rd June by the Department of Work and Pensions and the Office of Fair Trading into liability insurance; considers that the Department of Work and Pensions report lacks firm recommendations and necessary urgency; notes that a number of useful points are contained in the Office of Fair Trading report, but regrets that the Government has not come forward with firm action in relation to insurance premium tax on employers' liability compulsory insurance, fixed notice periods where premiums are to be raised or cover is to be withdrawn, the introduction of measures to limit the scope of employers' liability compulsory insurance, addressing the effect of the no-win-no-fee culture on the cost of liability cover and the establishment of a stronger link between risk and cost; further notes with concern the Government's plans to increase the insurance burden on business by using employers' liability compulsory insurance to recover the National Health Service costs for work place injuries; draws the Government's attention to the findings of the report carried out by Davis Langdon Consultancy on behalf of the Department of Trade and Industry, which revealed that premiums within the construction industry have already risen by as much as 500 per cent.; and calls upon the Government to take immediate action and not delay matters to a further report in the Autumn.