Stephen Haddrill, ABI Director General,said:

“We give two cheers to the Pre-Budget Report.  We strongly welcome the intention behind the Better Regulation proposals.  We also strongly support the approach on VAT.  To get the third cheer we need to see these words turned into action by the Government and the FSA.  We also need to be sure that in the future the Government will avoid last minute about-turns such as on SIPPs and the OFR, on which a great deal has already been spent”.

VAT exemption on outsourced insurance services

Peter Vipond, ABI Director of Financial Regulation and Taxation, said:

“The ABI urged the Government not to be first past the post in Europe to introduce new VAT rules on outsourced insurance services.  We are pleased that the Government has taken note of that.  Every quarter this change is not brought in will save the industry and its customers £50 million”.

Better Regulation

Peter Vipond, ABI Director of Financial Regulation and Taxation, said:

“We welcome the Government’s focus on better regulation, in particular the reviews of the Regulated Activities Order and the Financial Promotions Order.  We need to look carefully however at the proposals to reduce consultation.  If the outcome is that the FSA consults more strategically and in a joined-up fashion, this will be good news.  If the outcome is that the Regulator becomes free to push through damaging proposals without proper dialogue, it will be disastrous”.

SIPPs and the OFR

Peter Vipond, ABI Director of Financial Regulation and Taxation, said:

“We will look at the detail on both housing and the OFR.  Changing the rules for SIPPs at this stage - just as changing the regulations for the OFR after they had been settled - is damaging to the private sector.  When the Government changes direction at such a late stage, the costs to industry and its customers are significant.  We need to get better at getting it right first time”.

Ends

Notes

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2.            The ABI is the trade association for Britain’s insurance industry. Its nearly 400 member companies provide over 94% of the insurance business in the UK. It represents insurance companies to the Government, and to the regulatory and other agencies, and is an influential voice on public policy and financial services issues. ABI member companies hold up to a sixth of all investments traded on the London Stock Exchange, on behalf of millions of pensioners and savers.

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