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29 Oct 2008 : Column 239WH—continued
“consider making any announcement of a new compensation mechanism”.
I would like to pass on my continued thanks to the Minister’s humanitarian assistance unit. I know that its members are absolutely dedicated and committed, not just as civil servants but as human beings, to resolving this issue. They have been extremely helpful to me and my office, and I want to place that on the record.
Basically, the response from the Chancellor of the Exchequer’s office was saying, in a polite way, “So far—no further forward.” I believe that either today or as soon after today as possible, the Government should set out a way forward. Victims and their families have been waiting such a long time. They have said much about their concerns, and have bravely campaigned for the recognition that this scheme would provide for them. The one thing that I and they all fear, as does my noble Friend Lord Brennan, is that there will be another atrocity involving innocent British citizens and the cycle of violence and non-recognition will continue.
I therefore propose a potential way forward. There should be an agreement in principle to establish a scheme and possibly for that to be announced in the pre-Budget report. We need a timetable to conclude discussions between the Government and the travel insurance industry and to establish a scheme with costs being met on a shared basis. My noble Friend Lord Brennan proposed a 50:50 split. I do not say that at this stage—it should be a matter for negotiation. However, a scheme could be established by the proportion of the market insured by the industry—for example, 87 per cent.—with the Government picking up the remaining uninsured section. According to market analysts, at the moment that would cost the Treasury about £330,000 per year. That is thousands, not millions, of pounds per year to establish and develop the fund.
In establishing a new scheme, we should also look at the issues associated with retrospective measures to assist the 190 families of the victims who have died and the 156 victims who have been injured in the last 10 years by terrorist incidents abroad. In 2007, market penetration for all travel insurance was 87 per cent., which implies that 13 per cent. travel uninsured. Twenty million people per year are estimated to buy travel insurance. In 2006, the premium income from the UK travel insurance market was valued at about £709 million. That is forecast to rise, even in current conditions, to at least £838 million by the turn of this decade. That figure puts into stark reality how little we are talking about in terms of known managed risk.
My noble Friend, Lord Brennan, speaking in another place, said:
“I shall make two points about the insurance industry. If there are 10 million holidays to countries that do not have systems of compensation that we can call upon and we say that the average premium is £15 or £20, that is touching £100 million for the two-thirds of the 10 million who might take out a policy. Out of that £100 million, our Government takes 17.5 per cent. insurance premium tax, which is £17.5 million. They are acutely aware of the value of the travel insurance market. There are six national insurance firms providing cover, and they must be doing so on the basis that it is economic, it covers the risk and there is a reasonable
premium to be charged. So this is a case not of insoluble complexities but of a meeting”—[Official Report, House of Lords, 20 April 2007; Vol. 691, c. 462.]
He then proposed a meeting between the Government, the insurers, the British Insurance Brokers Association and all interested parties in order to come up with a solution. I am sure that my right hon. Friend will inform the House of progress in the discussions between the Government and the insurance industry.
At this point I would like to thank Lovells, acknowledge the personal briefing that I received before today’s debate and recognise the pro bono work that it carries out on behalf of the victims of terrorism. I also thank Amnesty International and Liberty for communicating with me with substantive, excellent background papers, and the Association of British Insurers for its helpful note on insurance issues.
It would be wrong not to acknowledge that there has been some movement in recent years to recognise the need to establish funding for UK victims of overseas terrorism. I have no doubt that my right hon. Friend the Minister will set out in detail how the Government have assisted the British Red Cross in setting up a charitable fund for the victims of terrorism overseas. However, the sums are small indeed: between £3,000 and £12,000, and it is not a compensation scheme.
Having set out a plan of action, it would be remiss of me not to, at the very least, give some examples of what compensation schemes would look like in terms of cost. No longer being a Minister, and having no inside knowledge of the Treasury, I am not privy to any financial modelling that has been or is being done to evaluate the cost of compensation schemes, borne either wholly by the public purse or by my suggestion of a shared cost between the public purse and the insurance industry.
It is extremely difficult to predict how many people might be affected in years to come, so the likely cost of such a scheme is hard to calculate. Tragically, however, we have previous incidents from which to gauge what could be payable to UK victims utilising either the Criminal Injuries Compensation Act 1995 tariff, or the more generous level offered to the 7 July victims by the London Bombings Relief Charitable Fund.
In 2005, the Sharm el-Sheikh attack affected 25 of our fellow citizens; 13 died, three had severe injuries, five had permanent injuries, and four had short-term injuries. Using those four categories and a number of legitimate assumptions regarding matters such as the cost of fuel expenses, special care and loss of future earnings, the Treasury and the humanitarian assistance unit would be able accurately to assess potential awards. In the case of the 7/7 victims, several awards reached the maximum cap of £500,000. For the similarly tragic incident in Sharm el-Sheikh, absolutely nothing was received in recognition of the tragic loss of loved ones—that is, in terms of the financial loss; the human loss is incalculable.
At the Cabinet Sub-Committee meeting that I attended on 22 February 2007, there was much in the briefings about the technical difficulties surrounding the establishment of a scheme. It is, in the light of my experience in Government, the intent to overcome detail that is the determining factor in whether a decision will be implemented. No issue that I dealt with in my 11 years as a Minister could have been seen through without willingness and intent to provide the capacity and resources
to overcome detail. Sometimes detail is a mere fig leaf of an excuse—to put off or simply refuse to take the necessary action.
Let us be clear, we are talking about our fellow human beings—our fellow citizens who have been killed, had limbs shredded, been blinded, burned and maimed. As a consequence, their whole lives have been destabilised. For those who are killed there is no life at all; for their loved ones, it is a life devoid of a loving relationship, of a father, a mother, a son, a daughter, a brother, a sister, or the dearest friend they could ever have had. We must not continue to compound that loss by failing to act this time. If the Americans, Australians, French, Italians, Finns, Swedes, Israelis can find a way through the detail and complexities to provide cover, why can we not? Ours is a Government who in recent weeks have brought forward proposals that have saved the world’s international financial system, yet they find it so difficult to recognise this wrong and make it right.
I conclude by saying that in the second world war, when London was subjected to a savage attack during the blitz, the Prime Minister, Sir Winston Churchill, said that it was unfair for British society to place the entire burden of the destruction on those unlucky enough to be hit. It is equally unfair not to compensate and assist those killed or injured by terrorism abroad. We rightly give assistance and compensation if terrorism occurs in this country, and not only to our own citizens, I am proud to say, but to the citizens of other countries who visit our shores and are affected by terrorism here. I therefore urge my right hon. Friend the Minister to act now in bringing the insurance industry and the Government together, to establish as soon as possible an agreed scheme.
Mr. Mike Hancock (in the Chair): I thank you, Mr. McCartney, for making that compelling and compassionate speech.
9.59 am
Richard Younger-Ross (Teignbridge) (LD): I congratulate the right hon. Member for Makerfield (Mr. McCartney) not just on securing this debate but on delivering a speech that was full of passion and detail. I certainly found his arguments compelling. I hope that the Minister and those who read this debate will also find the arguments compelling, because there is a proven need for the kind of scheme, without going into the detail, that the right hon. Gentleman proposed.
Indeed, in 2005, the Prime Minister, Tony Blair, said that he would consider setting up such a scheme. It is a shame that almost four years later we seem to be no further forward and that schemes proposed in the other place have not received Government support.
Ten million Brits travel to countries outside Europe and the USA that are not covered by schemes. Some of those people will have insurance, some will not. Some will think that they have insurance but then discover when they try to claim that they do not because the policy excludes acts of terrorism.
It seems a shame that, whenever someone from this country leaves these shores, the Foreign and Commonwealth Office seems to want to wash its hands of them. It is as if they shake the sand off their shoes and leave everything behind. We have good consular services, and I do not
question what the FCO is able to achieve for people who have difficulties when they are abroad. However, there seems to be a difference between the attitude of this country and that of other countries. The countries that set up schemes show a desire to protect their citizens anywhere in the world rather than just within their own shores.
The current Prime Minister has asserted his Britishness. He has spoken about it. I would hope that his Britishness is not bounded by the shores of this country but that it embraces all our citizens, wherever they travel around the world. As the right hon. Member for Makerfield said, we have a Prime Minister who seems to be capable of understanding very big numbers, but schemes such as this involve very small numbers. It is the negotiation around who pays the small sums that seems to cause so much difficulty.
It was said in a debate in the other place that travellers should have their own insurance. I have travel insurance. I have a specific policy and believe that I also have two others: I have a bank account that I am told gives me a level of travel insurance, and a credit card which I believe does as well. I could not say whether any of those three policies would cover me for an act of terrorism; for example, if I had been in the bar in Bali or Sharm el-Sheikh and had been a victim of those terrorist attacks. I suspect that any hon. Member in this place would struggle to say what cover they have under their insurance. Some will know because they religiously go through all the detail, but most of us do not, because we do not have time to do that. We have travel insurance and therefore think that we are covered, but that is not always the case.
Some people who travel find the additional cost of £100 for insurance slightly excessive and therefore travel without it. It is now the case that one can travel to Egypt and other countries very cheaply at certain times. In fact, it can be cheaper to travel to some of those places than to holiday in Europe. Sometimes it is even cheaper than holidaying in the UK. Sometimes when people aspire to broaden their outlook and to enjoy the treasures that are there to be explored when abroad, they are working on a tight budget and cut the travel insurance. They are unwise to do so, but the only way to stop that would be to have compulsory travel insurance, and I do not think that that is a line that we would want to take.
The right hon. Member for Makerfield referred to insurance picking up the costs of people who are insured and the state picking up the costs of people who are not insured. I do not have a problem with that model, but some might argue that it would be unfair because some people would pay for cover while others would not. There is also the risk that some insurers would exclude terror if they knew that the Government would pick it up if the person had an insurance policy that did not cover it. I understand that complications with the model would have to be worked out.
Other countries successfully provide such insurance, as the right hon. Gentleman said. The USA has the international terrorism victim expense reimbursement programme, which covers medical, mental health, property loss, funeral and other miscellaneous expenses. Australia does not have a comprehensive package but it does have individual packages. Again, they are funded by the
Government. They are run by Medicare, which is a separate Government agency. Finland has extended its general criminal injury policy to cover people who are injured while abroad. The French started to bring in schemes after a wave of terrorist attacks in France in 1986. They were based on a levy on property insurance and were primarily intended to cover internal acts of terrorism but now also cover people who travel abroad. Israel, which has had compensation schemes for acts of terror since the state was founded, primarily covered people on its borders but extended coverage in 1970 with compensation for victims of hostile acts. It is paid through the National Insurance Institute and involves a universal insurance contribution. Italy also has a Government-funded scheme.
Why should a Government help to ensure that such a scheme is provided? I would argue, in principle, that somebody who is the victim of a terrorist act while travelling is not the victim of an act aimed at that individual. The situation is not the same as being robbed or mugged, or coming down with an illness while travelling. The person is the victim of an act against the state in which they are travelling. In cases such as Bali, the act was not just against the state they were travelling in but against the states from which they came. That act of terror was aimed as much at the west and Australia as it was against Indonesia.
If acts are aimed not at individuals but at the state, surely the state has a duty to try to compensate and to protect. Sadly, Government actions sometimes exacerbate acts of terror. It was predicted that the war in Iraq would increase acts of terror, and that has happened. I shall not use this debate to argue about whether the war in Iraq was right or wrong, but sometimes the things that we do provoke a reaction from other groups, and people become the victims of a reaction to the actions of the state. That does not in any way justify acts of terror, but we must understand that sometimes the sad consequence of trying to do something right is that other people will use that act as an excuse for an act that is evil.
I will not go into detail about what type of scheme, whether Pool Re or a straight levy on insurance, should be used because, in a sense, that does not matter. What matters is that we have a scheme that is simple for people to claim on. Such claims must be quick, not complicated. They should not take a long time, because when people are grieving the last thing they want is long arguments with lawyers and others to try to recoup, at least financially, what they can—although they can never recoup the emotional costs—in a way that does not worsen the bereavement and pain that they already feel.
I congratulate the right hon. Gentleman on securing this debate. I hope that the Minister will listen carefully to the points raised and that, in the near future, the Government will come up with their own scheme that allows those people who, sadly, have their lives destroyed or maimed by acts of terror to be compensated, at least financially.
10.11 am
Mr. Tobias Ellwood (Bournemouth, East) (Con): I pay tribute to the right hon. Member for Makerfield (Mr. McCartney), who secured this debate.
This is a sensitive subject that exposes Members of Parliament directly to those people affected by a situation or a circumstance that is often so horrific that we cannot but be moved by what we are speaking about. That point was illustrated by both the right hon. Gentleman and the hon. Member for Teignbridge (Richard Younger-Ross).
It is important to remind ourselves that this is the first such debate that we have had; it is long overdue. The right hon. Gentleman mentioned Lord Brennan’s private Member’s Bill, which went to some lengths to try to illustrate the problems and difficulties that we face in providing compensation for overseas victims of terrorism. I am grateful for this chance to put on the record my thoughts, both personal and from my party’s perspective, because we face a dilemma that needs to be resolved.
I pay tribute to the Minister for the Olympics, the Minister present this morning, whom I met before I became a Member of Parliament because of the involvement that I had with the Bali bombings. She has been stalwart, both personally and from her party’s perspective, in trying to promote an understanding of the situation. I speak for all the victims’ families, who have been pleased with the sensitivity with which she has conducted these affairs and with the way in which she has tried to pioneer a way forward in reconciling the problems relating to compensation for terrorist attacks that take place overseas. I place on record my gratitude to her for all her hard work, which I appreciate personally. I think that I speak for the whole House when I thank her for the dedication that she has shown to the families, for looking after and nurturing the individuals’ needs and for doing other things, too—from making the Government recognise their role in alleviating some of the pain experienced from the event itself, all the way through to the creation of a memorial and trying to establish some funding to help those who may yet experience a horrific terrorist attack.
I also place on the record my appreciation of the Secretary of State for Justice and Lord Chancellor, who when Foreign Secretary summoned me to see him after the Bali bombings when I lost my brother on 12 October 2002. I was not a Member of Parliament then. I made a bit of a song and dance about the lack of support that the Government provided; there was no ambassador there, no Land Rover with a British flag on it and no support of any sort. The right hon. Gentleman kindly invited me and my sister to see him and, for an hour and a half, we made some recommendations, including on the establishment of an emergency response team, which is now up and running and, I am pleased to say, working effectively, not just helping out in respect of terrorist attacks, but helping in natural incidents, such as the tsunami, providing support for British citizens who are caught up in such horrific events overseas.
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