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Insurers key in Budget for Growth

Insurers key in Budget for Growth

Responding to today's Budget, Maggie Craig, Acting Director General of the ABI, said:

"Today's Budget offers a dual route for growth - boosting long-term investment and securing a competitive UK tax regime.

We strongly welcome the two per cent reduction in corporation tax which will give the UK the lowest corporation tax rate in the G7. This is a real statement of intent that shows the UK is open for business.

"Insurers fully support the Green Investment Bank, and are uniquely placed to help as they invest for decades rather than years. We would have liked the Bank to have been able to access money markets from day one rather than wait until 2015, but we understand the reasons for a delay and welcome the additional funding.

"Progress on the taxation of foreign profits will bring the UK in line with international competitors. This is crucial for insurers as they align their businesses for massive regulatory change over the next 18 months ahead of the Solvency II regime going live in January 2013."

On the implementation of Lord Young's review of Health and Safety

Nick Starling, Director of General Insurance and Health, ABI, said:
"We welcome the Chancellor's promise to implement in full Lord Young's recommendations made in his health and safety legislation review. Lord Young rightly identified how badly interpreted or misunderstood regulation, bureaucracy and disreputable claims management firms have contributed to a compensation culture.

"Implementing these recommendations will create a culture of responsible risk taking by individuals and businesses, backed by proportionate health and safety regulation underpinned by insurance.

"This also means a clampdown on irresponsible claims management firms. Not only do they help fuel public belief that behind every accident there should be a claim, but they add costs to the legal system that ultimately are borne by all insurance customers.

"Lord Young's recommendations coupled with full implementation of the recommendations of Lord Justice Jackson's review into civil litigation, will lead to claimants getting fair compensation as quickly as possible and help insurers keep costs affordable for customers."

On savings

Helen White, acting Director of Life and Savings, ABI, said:
"The intention to establish a flat-rate pension is an important move towards a simpler and more understandable pension system. It will help people plan for their retirement, stop people falling into the means-testing trap and ensure that it always pays to save. We look forward to working with the Government and other stakeholders to make these proposals work."

On tax reform

Peter Vipond, Director of Financial Regulation and Taxation, ABI, said:
"There is genuine progress today towards the Government's objective to make the UK tax system the most competitive in the G20. The revisions to the exemption for foreign branch profits will particularly help attract and retain insurers in the UK. This is important for UK insurers because the new EU-wide Solvency II regulations favour branch structures over subsidiary structures as they make more efficient use of capital."

On planning of building developments

Nick Starling, Director of General Insurance and Health, ABI, said:
"We understand the need for a more flexible and simple planning process, but changes must not lead to developments being granted planning permission in high flood risk areas. Planning, development and building systems all have a role to play in minimising flood risk, and decisions must take account of proper flood risk management issues"

Economic comment

Dr Rebecca Driver, Chief Economist and Director of Research, ABI, said:
"It was very important that this budget set out a coherent strategy to underpin our long term growth, including ensuring that the UK's tax regime is competitive. Overall, the Budget represents a positive step in creating a framework for long term growth. The important thing will be for the Government to implement its vision effectively over the coming years."

Notes for Editors

1. Enquiries to:
Liz Forster 020 7216 7444 (Mobile: 07717 578 586)
Malcolm Tarling 020 7216 7410 (Mobile: 07776 147 667)
Erfan Hussain 020 7216 7411 (Mobile: 07712 841 184)
Kelly Ostler-Coyle 020 7216 7415 (Mobile: 07968 364 302)

2. The ABI is the voice of the UK's insurance, investment and long-term savings industry. It has over 300 members, which together account for around 90% of premiums in the UK domestic market.
The ABI's role is to:
- Be the voice of the UK insurance industry, leading debate and speaking up for insurers.
- Represent the UK insurance industry to government, regulators and policy makers in the UK, EU and internationally, driving effective public policy and regulation.
- Advocate high standards of customer service within the industry and provide useful information to the public about insurance.
- Promote the benefits of insurance to the government, regulators, policy makers and the public.

The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 24% of the UK's net worth and contributing the fourth highest corporation tax of any sector. Employing over 275,000 people in the UK alone, the insurance industry is also one of this country's major exporters, with a fifth of its net premium income coming from overseas business.

3. An ISDN line is available for broadcasts.

4. More news and information from the ABI is available on our web site, www.abi.org.uk.

Last updated 01/07/2016