Government has failed to heed warnings on insurance

The Government’s failure to recognise the difficulties threatening many small businesses with closure has been criticised by a former member of the Assembly’s Enterprise, Trade and Investment Committee.

East Londonderry UUP representative David McClarty, who worked in the insurance industry in the North West before becoming an MLA, claimed it was "a damning indictment on the Government’s obvious lack of concern for small business enterprise that the warning signals have not been heeded".

“It is not only small businesses which are feeling the pain of high insurance premiums particularly in the field of employers liability but yet no-one at Westminister seems to be listening," said Mr McClarty.

“Lack of competition within the insurance market is one cause of the high premiums, with the number of Insurance underwriters falling from 26 to five since 1996.

“What is worrying is the fact that the liability insurance market has failed and a significant number of small firms continue to find it impossible to secure Employers Liability Insurance at any cost. As a result they are facing the stark choice of making staff redundant or operating illegally.

“The Treasury must give serious consideration to using the revenue generated by Insurance Premium Tax to avert a growing crisis in the small business sector. The Chancellor should now move to demonstrate his commitment to smaller firms."

The UUP member claimed the current problem is a global one, which is forcing premiums up and resulting in a reduced level of competitiveness.

“Several clubs in the sporting arena expressed difficulty even obtaining a quote which in one or two instances actually ran them close to closure.

“The events of September the eleventh in America have changed the face of the insurance market in a profound way.

Mr McClarty said it was imperative that Government realised the huge implications, and warned that thousands of livelihoods were at stake not only here in Northern Ireland but across the UK.

(MB)