Riot Compensation Bill — House of Commons, 2015-12-04
Topic: Domestic Commerce
Julian Carlton Knight (Conservative, Centre-right): English is my first language, and I, too, find it very difficult to understand fully the wording of the Act. That is not the only reason, but it is another reason why we need this update. Let us not forget that the Bill comes after very extensive, independent reviews, such as the Kinghan review. I welcome the fact that there is a lot of thought and consideration behind the Bill. We can see that in the careful way that many of its measures have been drafted and in the way it has been promoted by my hon. Friend the Member for Dudley South, who has worked incredibly hard on it My hon. Friend the Member for Torbay focused extensively on the provision of new for old, and I completely agree with him. As someone who worked on a range of financial matters, particularly personal finance, for the best part of a decade and a half, I must say that I know of no insurance policy that would replace items on an old for old basis. That almost disappeared 20 or 30 years ago, so to continue to insist that an item is replaced by one of a similar age is, frankly, ridiculous and completely out of kilter with modern society and modern insurance practices. The provision of new for old will give greater clarity and certainty for all those affected by riot, including small businesses The cap of £1 million per claim is eminently sensible. As I understand it, if there is a claim of £1 million for a building, there may be a separate claim by another individual for the loss of its fabric and other elements. That aspect takes good account of rising modern property prices. The advent of a riot claims bureau is also welcome. I want to know a bit more detail about exactly how it will work, but I am sure that that, like many other elements of the Bill, will be examined in Committee The Bill reflects the reality of modern insurance patterns not only in the provision of new for old, but, frankly, in recognising the existence of the motor car, which did not exist in 1886. I believe it does not make provision for third-party cover. As someone who has written about insurance and other financial matters, I know that third-party car insurance is almost extinct. In fact, if someone applies for a quote on a website, they will almost invariably find that car insurers’ quotations are higher for third-party cover than for fully comprehensive cover. To be honest, car insurers think someone taking out third-party cover is a bad insurance risk per se, so they are unlikely to write the business. It is good that the Bill covers the modern car, as well as tools and other items that may be left in vehicles overnight The Bill will allow for compensation to be paid more quickly, which we all desire. The proof of the pudding will of course be in the eating, but as my hon. Friend the Member for Torbay said, if the Bill does not go into Committee, we will simply be left with the 1886 Act and we already know how it works—or does not work—in relation to compensation. I do not agree with the idea that legislation should be introduced just because something must be done, but the fact that the Bill has already been considered extensively by an independent review reassures me that such matters will be looked at further I share some of the concerns expressed by the right hon. Member for Tottenham about the 42-day limit, so I welcome the Minister’s comments. I look forward to seeing how that plays out in Committee in catering for those who, as the right hon. Gentleman said, may be suffering a great deal of shock, may not have English as their first language and may need a gentler approach to time limits and more understanding in relation to time barring My hon. Friend the Member for Torbay asked whether the Bill would lead to increased premiums. Most claims will be paid out up to the £1 million cap, but, knowing the insurance market, I genuinely believe that the effect on premiums would be very marginal. Home insurance is in fact a very profitable business, unlike—strangely enough—car insurance. In the past 20 years, the car insurance industry has made a profit from writing its policies on only four occasions. Home insurance is generally quite a cash cow—a Steady Eddie, as it were—for the insurance industry. Let us not forget that there are moves ahead to help out on insurance premiums, such as by clamping down on the compensation culture and the no win, no fee blight in our society. Looking at it in the round, the effect of the Bill will be very marginal and will not be felt to the degree that some people fear Some legislation is brought forward almost because it is said that something has to be done and this feels as if we are doing something—I always vehemently oppose that aspect of lawmaking—but the Bill advances and upgrades the law, makes it more relevant to our society and sets us on a new footing so that if such an awful eventuality happens again, we can, I hope, respond more quickly and in a better manner.