ABI slams Whitehall flood spin

See also: Flooding Question Time

The ABI has attacked the government for attempting to spin negotiations over floods, in the week it was set to meet Chancellor Alistair Darling.

The ABI was set to enter crunch talks with Darling yesterday, after Insurance Times went to press. The tone for the meeting was set on Tuesday, with a row over flooding – one of the key issues to be raised at the meeting, alongside tax and the competitiveness of the UK business environment.

On Tuesday, floods recovery minister John Healey released a statement that hit out at insurers for not doing enough to rehouse flood victims. He said: “I urge councils and the insurance industry to step up the pace of progress over the coming weeks and months... I will continue to press the insurance industry to ensure claims are being processed and repairs made as quickly as possible.”

In response, Nick Starling, the ABI’s director of general insurance, said: “I’m not happy about this at all. I have written a note to the communities and local government department to register this. We have regular meetings with the minister, but following this meeting they have said that they have told us to increase our efforts to help families that have not been rehoused after the floods.”

He added that the ABI always said it would take a year to get the majority of families rehoused, and that it believed there were 700 families still homeless, not more than 5,000 as the government had indicated.

The ABI is in ongoing negotiations with the government over flood defences and cover in flood plain areas.

The ABI was also set to tackle Darling over a raft of tax issues when he made an unprecedented appearance at its board meeting. Top of the agenda was the proposed new tax on foreign profits, which the ABI has protested against strongly, with insurers such as Brit even threatening to redomicile.

The government has indicated that it is willing to reconsider the proposals.

The ABI was also seeking a key role in the Treasury’s ongoing review of fiscal policy. It was announced earlier this week that Nicolas Moreau, chief executive of AXA UK , has become the insurance industry’s representative on the government’s 14-member tax forum.

The forum, to be chaired by Financial Secretary Jane Kennedy, aims to ensure UK competitiveness.

Meanwhile, the government is believed to have prepared a final draft of the legislation that will overhaul the personal injury claims process.

It is thought to have bowed to pressure from trade unions by exempting industrial accidents from the draft and focusing instead on motor-related claims, as predicted in Insurance Times. Sources say the Ministry of Justice expects the draft to be approved by mid-June.