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Public and Employee Liability Insurance

6. Mr. John Smith (Vale of Glamorgan): What representations she has received on the impact of increased premiums for public and employee liability insurance on small businesses. [97623]

The Minister for Energy and Construction (Mr. Brian Wilson): The Department has received a number of representations from companies and their representative bodies concerning increased premiums for liability insurance. In response to the concerns raised, we have set up a review of the employers' liability insurance system, and the Office of Fair Trading is conducting a study of the liability insurance market.

Mr. Smith : I warmly welcome that reply. The Minister will be aware of the letter that I received from Mr. Marco Camilleri of Camilleri Roofing, a highly respected and very successful family business in my constituency. Despite having an unblemished safety record and investing substantial sums in health and safety training, it faces massive increases in its liability insurance. Given the lack of any correlation between the risk posed by the company and the amount of insurance it has to pay, I am delighted to hear that the matter is to be referred to the Office of Fair Trading—especially in the light of public concern over the possibility that insurance companies are exploiting the current security environment.

Mr. Wilson: My hon. Friend is right to raise that case study. Many companies are in the same position.

There are clearly genuine reasons for increases in insurance costs. They are probably part of the price we pay for the litigation culture into which we are increasingly moving, and there have been substantial extraneous factors as well. Nevertheless, we should try to help businesses overcome the problem, and make sure that the insurance industry distinguishes between companies with the unblemished record described by my hon. Friend and those with no such record.

The construction industry can help itself. Part of the problem is that the industry does not have a good health and safety record. We must reward companies that do well. I hope that the various inquiries that are taking place will prove helpful; in the meantime, the company mentioned by my hon. Friend can consult a reputable trade association or the British Insurance Brokers Association.

Mr. Michael Weir (Angus): A review is all very well, but what assurance can the Minister give Mackay Boatbuilders of Arbroath, in my constituency? Seeing what was happening in the fishing industry, the company sensibly diversified into maintenance of vessels such as oil supply ships. Despite having made no claims for 12 years, it has incurred a 400 per cent. increase in liability premiums. It has managed to pay this year, but is fearful of what will happen when the insurance must be renewed at the end of the year. Will the Minister undertake to meet the insurance companies

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immediately, and impress on them that increases of such magnitude are unacceptable in the case of small businesses?

Mr. Wilson: I assure the hon. Gentleman that we have been doing exactly that for months. I am pleased that he has discovered this issue from a letter from a firm in his constituency.

As I have said, it is often possible for companies to obtain satisfactory terms through trade associations and the British Insurance Brokers Association, especially if they can demonstrate that they have a good health and safety record. There is, indeed, a potential advantage if the problem makes companies aware that such a record will secure beneficial premiums. It is necessary to separate the sheep from the goats, particularly in the construction industry, which can unfortunately be stigmatised by the existence of some very bad companies.

Mrs. Betty Williams (Conwy): My hon. Friend mentioned the investigation being conducted by the Department for Work and Pensions and the Office of Fair Trading. Bearing in mind the problems faced by British manufacturing companies—including some in my constituency—in obtaining liability insurance, will he use his good offices when discussing the matter with other Departments to ensure that the study is completed without delay?

Mr. Wilson: I take my hon. Friend's point. The issue is urgent for many very good companies, which is why the Government as a whole have responded in the way I have described, and why it is particularly important to involve the OFT. I am acutely aware from the sectors with which I deal—I think construction has been the worst hit—of the need to secure answers. As has been said, many companies have managed to deal with the hike in employers' liability insurance this year, but would be in difficulty if the same happened next year. I hope that through their good offices the Government can help to establish stability in a market that is normally extremely competitive. We would not normally intervene, but we recognise the problems and are trying to find solutions.

Mr. John Bercow (Buckingham): Is the Minister aware of the case, highlighted on 31 January this year by my hon. Friend the Member for North-West Norfolk (Mr. Bellingham), of the specialist small construction firm on the south coast that last year obtained £10 million-worth of insurance cover for £12,000? This year, it requires a minimum of £5 million-worth of cover simply to secure contracts from its regular customers, but can secure only £1 million-worth—a tenth of that which it previously enjoyed—for £8,000, two thirds of the previous cost. Given that 99.6 per cent. of businesses in this country employ fewer than 100 people, but employ a large number of people central to our economy and generate two fifths of our national output, does the Minister accept that on a cross-party basis—this is not a partisan matter—action is urgently required?

Mr. Wilson: If the hon. Gentleman keeps making speeches like that, I might invite him to come and join us—but perhaps not.

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I do not think that the issue is party political, and I accept the validity of what the hon. Gentleman says. I assure him that, through the measures that I mentioned, we will continue to work with industry to facilitate a solution. For smaller companies in particular, the issue is extremely significant. Fortunately, the construction industry is experiencing a boom phase in most parts of the country, but that will not always be the case. We have to sort out the problem while conditions are good, so that it will not become an additional burden when conditions are more challenging.

EU Enlargement

7. Dr. Phyllis Starkey (Milton Keynes, South-West): What analysis her Department has conducted of the opportunities for UK businesses from EU enlargement. [97624]

The Secretary of State for Trade and Industry (Ms Patricia Hewitt): British business has already benefited from the removal of trade barriers with the fast-growing economies of central and eastern Europe, and we expect that to continue with the expansion of the EU to create the largest single market in the world. My officials are completing a more detailed analysis of the opportunities and impact, and I intend to publish it as soon as possible.

Dr. Starkey : Given the current benefits of markets in eastern and central Europe, as well as the potential increased benefits and the fact that many of our European Union competitors are aggressively expanding into those markets, will the Secretary of State detail the specific ways in which she is trying to encourage British businesses to take advantage of those opportunities?

Ms Hewitt: About 14,000 British firms—mainly, I am glad to say, manufacturers—are already exporting goods to central and eastern Europe, and those opportunities are clearly growing. I have asked British Trade International, in its work in the regions, to ensure that when supporting more of our small and medium-sized enterprises to become exporters it draws their attention to those growing markets.

Mr. David Cameron (Witney): Enlargement of the EU is wholly welcome, but does the Secretary of State agree that it should not be accompanied by further enlargement of her Department? Will she explain why, when the Government do not own a coal, steel or car industry, it is still necessary to have eight DTI Ministers, a few of whom have joined us today? Is it a make-work scheme for Government drivers and private secretaries, or is there some nobler purpose?

Ms Hewitt: I thank the hon. Gentleman for that extremely serious question. I can assure him that all my Ministers are enormously busy. Indeed, the Under-Secretary, my hon. Friend the Member for Welwyn Hatfield (Miss Johnson), who has ministerial responsibility for competition and consumer affairs, is currently in central and eastern Europe exploring with Government and business there the opportunities for

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closer investment and trade. I will continue to ensure that my Department operates as efficiently as possible, and delivers an even better service to business and consumers.


8. Brian White (Milton Keynes, North-East): What steps her Department is taking to increase the take-up of broadband services. [97625]

The Minister for E-Commerce and Competitiveness (Mr. Stephen Timms): Competition is proving an effective driver for the broadband market, as the UK now has the second largest number of broadband connections in Europe after Germany. In addition to providing for a competitive market environment, the Government's contributions include the new UK broadband taskforce, support for the broadband stakeholder group and the UK online for business advice programme, and the £30 million UK broadband fund.

Brian White: I am sure that the House will welcome the work of the broadband stakeholders group, and I am sure the Minister will endorse its recommendations. He knows, however, that there are areas such as mine, where every exchange is enabled but technical difficulties prevent take-up. There are other areas with other problems. Will my hon. Friend assure the House that Government Departments, agencies such as English Partnerships and regional development agencies, and the regulator will use innovative ways forward and not be hidebound by bureaucratic rules that prevent the take-up of broadband by various groups?

Mr. Timms: My hon. Friend is right. It is important that we encourage imaginative public-private partnerships and do not impede them. The changes introduced by the Communications Bill, with which my hon. Friend has been helping in Committee, will contribute. A growing number of initiatives are being taken forward, especially by the regional development agencies. The South East England Development Agency, for example, is giving grants to help small businesses in Hastings access satellite broadband and plans to extend those arrangements throughout the region. It is important that such initiatives be supported.

Mr. Roger Gale (North Thanet): What assessment has the Minister made of the number of small businesses, potential domestic users and others who are denied access to broadband cable in areas such as Birchington and Westgate in my constituency, simply because of the roll-out thresholds? Does he regard that as acceptable?

Mr. Timms: The hon. Gentleman has also played an important part in the Committee considering the Communications Bill, as its Chairman. We estimate that about 30 per cent. of UK households are currently not within reach of a terrestrial broadband service. Satellite broadband is available almost everywhere, which is why SEEDA's arrangements to help businesses access satellite broadband, which is more expensive, are

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potentially very important. As SEEDA rolls out those arrangements throughout the south-east region, the hon. Gentleman's constituents and businesses in his constituency may well be among the beneficiaries.

Mr. Ian Cawsey (Brigg and Goole): In any discussions that my hon. Friend has with broadband providers, will he champion the cause of rural areas, where modern communications are so important? Broadband roll-out appears to be based on a set target of the number of people who register. That is inevitably more difficult to reach in a sparsely populated area such as the Isle of Axholme in my constituency.

Mr. Timms: My hon. Friend is right. It is important that we extend broadband to rural areas as fast as possible. BT has been reducing some of its thresholds recently. That is good news, but we also need to look at some of the more imaginative ways of extending broadband into rural areas. I was in Canada a couple of weeks ago, and heard about the way in which social enterprises are helping to deliver wireless-based broadband services to rural areas. Of course, in Canada the geographical challenges are much greater. It is important that we make progress in that respect.

Mr. Andrew Robathan (Blaby): Given the Government's welcome stated aspiration to make the United Kingdom the most competitive and dynamic communications market in the world, and the role that Government Departments have to play in that by encouraging broadband connection, what target have the Government have set for broadband connection for schools? How many schools currently have broadband access, and when does he expect 100 per cent. of schools to have broadband access?

Mr. Timms: The Prime Minister announced last November that we expect every school to have broadband access by 2006. I believe that the current proportion is about 25 per cent. In all, we expect the public sector to spend about £1 billion on broadband over the next three years. Once the school in a rural community has broadband, at least in principle there is the possibility of spreading access to other users, so the public sector contribution will be important.

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