The big issues for the industry in the upcoming Parliamentary session
The new Parliamentary term kicked off yesterday, heralding what looks set to be a pivotal two months in politics.
Following September’s fortnight-long recall of the House of Commons, followed by the party conference season, this week sees the start of real business at Westminster.
The key date, though, is 20 October when Chancellor of the Exchequer George Osborne will present his much-anticipated comprehensive spending review.
The effect of the cuts that Osborne is expected to outline will be felt across the country, and the insurance industry will not be immune. Insurers and brokers will see a knock-on effect from businesses likely to go under as a result of public sector contracts being cancelled.
Flood defence spending, however, continues to top the industry’s agenda. The comments of floods minister Richard Benyon last week – that the importance of flood defence investment is recognised at the highest level – are welcome.
The industry is, however, understandably keen to see the colour of Osborne’s money before judging the government’s commitment to flood defence; avoiding heavy cuts is probably the best that we can expect at the moment.
While the focus will be on the spending review, the coalition government is keen not to be defined by cuts: it also wants to be seen as a reforming administration, especially with regard to financial services regulation.
This Thursday marks the deadline for responses to the Treasury’s consultation paper on financial services reform, which proposes the abolition of the FSA.
The shake-up was resisted by the Liberal Democrats during the coalition’s early days, but at last week’s Tory party conference, City minister Mark Hoban repeatedly underlined that the direction of reform is not in question.
It is not just big-ticket reforms that the industry will be keen to see implemented. The last government left behind a lot of unfinished business, like the introduction of continuous insurance enforcement for drivers.
The most prominent item in this particular list, at least as far as the insurance industry is concerned, is the Jackson review of civil litigation costs, which the Ministry of Justice has told Insurance Times will be tied to a wider review of legal aid.
The run-up to next Wednesday’s spending review will see the publication later this week of the Young compensation review, which is likely to recommend a crackdown on advertising by claims farmers and the payment of referral fees by lawyers.
Given the Conservative party’s decision to give Lord Young, a Thatcher-era survivor, a turn on the main stage at last week’s party conference, the peer’s recommendations are likely to receive a favourable wind from ministers – and from insurers.
