Debate in Parliament on Big Insurance Hike for Small Businesses and Charities

12.00.00am GMT Wed 18th Dec 2002

MP Vincent Cable secured a debate in parliament on Wednesday over escalating insurance costs affecting local small businesses and charities.

Insurance has shot up by 50% or more in the last year and some organisations cannot afford insurance or are operating without insurance.

Vincent Cable cited several ways in which local people and organisations were being hit:

*big increases in insurance charges for voluntary bodies like guides and scouts or charities offering transport to the elderly and disabled.

*big (employers liability) insurance increases for small businesses such as builders.

*organisations trying to avoid taking risks to avoid trouble with insurers. He reported the case of an elderly and disabled lady who could not get council drivers to help her get into and out of an ambulance because the council was concerned over its drivers getting back strain injury and compromising its insurance policy.

Vincent Cable said: "the surge in insurance costs is worrying."

"The reasons are complex but have a lot to do with rising lawyers costs under the system of 'no win no fee' litigation."

"The insurance industry also has a lot to answer for; there is some over-charging and often a complete lack of consideration of customers problems."

"The government has launched an urgent study of the issues, but this may be too late to save a lot of small operations".