I wish to share my time with Deputies Upton and Lynch.
Perhaps the greatest problem facing our economy is the appalling and devastating impact of insurance costs on all our lives, whether as individuals, communities or business people. Since the general election, every Member has been inundated with e-mails, letters and visits from the owners of small businesses pleading desperately for action to be taken in response to the appalling insurance quotes they have been receiving.
In recent days in my constituency, a one-man business seeking public liability insurance, a window cleaner, discovered that his quote had jumped by 100% for the forthcoming year, while the employer's liability insurance of another small company, a window replacement firm, jumped from about €8,000 last year to €28,000 for the coming year. These type of rises in premia are typical.
People have also tried to come to grips with the problem on an individual level. While I could quote from many of the messages I have received, I will confine myself to one sent by a constituent yesterday evening in which she states:
I write in connection with my insurance premium. Last year I paid approximately £900 for myself, my husband, and two of my children, one female aged 23 and one male aged 21. Both had full clean licences with no previous claims or endorsements of any kind.
This year despite having no claims during the year I have been quoted €2100, an increase of approximately 80%. When I inquired about this, I was told it was because of the age of my children. Yet I had no difficulty adding them to my insurance last year.
She goes on to relate how perplexed and irate she is about the matter. Her letter is typical of what has been happening throughout society.
Many politicians are members of community forums – I am the director of several community companies – which have also faced year on year rises of 100% in public liability insurance. The reason for this is that sometimes our legal representatives and insurance brokers are simply not willing to contest a claim, such is the climate engendered in society regarding claims. For community bodies, this means having to invest hard work as volunteers to raise the money required. We do not even have the cashflow available to ordinary business.
In recent days the joint managerial body of our secondary schools has also complained bitterly about the devastating increases in schools' costs caused by rises in public liability insurance. JMB general secretary, George O'Callaghan, informed me that these increases are between 25% and 60%. The only option open to school administrators is to turn to the Minister for Education and Science and the Minister for Finance and request some redress.
We have arrived at an appalling position, the impact of which has been devastating on the entire economy. In recent months, many businesses have told me their only option will be to try to claw back some of their insurance costs against their tax bill. This is one recourse to which shell-shocked small businesses will resort this year in order to get by. As indicated by the proceedings this afternoon, Members are concerned about falling tax revenues. Corporation tax, for example, is due to decrease again. The small business group, ISME, has calculated that 96% of small businesses have had rises in public liability and employer's insurance this year, averaging 71%. These increases have led to a fall of about 20% in their overall workforce. The Tánaiste reported to the House on this survey a few weeks ago.
In terms of tax revenue, falling employment and the general rise in costs to society, recent developments have been a total disgrace. The leader of the party to which the Minister of State belongs has had a very central role in this process, having been Tánaiste and Minister for Enterprise, Trade and Employment for more than five years. Throughout the last Dáil she left the responsibility for the critical area of commerce in the very unsafe hands of a very affable Deputy who was, however, a highly incompetent Minister of State, namely, Deputy Noel Treacy. For five years he kow-towed to vested interests in the insurance industry and the legal profession and refused to take action. He even managed to lose the first interim report of the MIAB. The report was later put on the back-burner and he pretended its central findings were ludicrous and did not add up. For five and a half years we listened to the mantra that progress would be made.
As the end of the rainbow Government approached, Deputy Rabbitte, who was Minister of State with responsibility for commerce, pursued the issue of insurance and was in the process of establishing an implementation body to implement the findings of the personal injuries assessment board. These plans date back to April 1997, yet here we are nearly six years later and the findings of the board have still not been implemented. Moreover, the Tánaiste is still talking about establishing the board on an interim basis. There is a real case for calling for her resignation, such has been her lethargy in the past five years in not pursuing this key element of our costs. Nothing has been done.
Every time I contact the Tánaiste about businesses in my constituency, as I have done endlessly in the past two or three years, she sends me the same letter which, I am sure, other Deputies also receive. I can nearly recite its contents by heart. She first lists the reasons for the difficulties in the insurance sector, namely, the level of claims, the increasing level of awards, poor investment returns to insurance companies and so on, all of which we have heard before. After this, she always states that:
The pricing and underwriting of insurance is, however, a matter for individual insurance companies. EU law prevents us from intervening in relation to the matter of premium levels or in respect of what risks insurance companies are prepared to underwrite.
Her statement is utter hogwash and nonsense and the Minister of State, who is an accountant, knows it. We do have the powers to set in train very significant measures to tackle high insurance costs. My colleague, Deputy Rabbitte, when he was party spokesperson on this issue, made one simple suggestion to the Tánaiste which she never took up. Noting that the MIAB report showed that young drivers, contrary to what we had previously believed, were being ripped off by as much as 1000% and that insurance companies here were making 11 times more profit from this group than were their British counterparts, he proposed asking Mr. Niall Crowley and the Equality Authority to begin a statutory inquiry into the matter, as it is entitled to do. Such an investigation could call for papers and documents to be produced to look into the insurance industry and the way in which it discriminates against young men and women and older drivers.
That simple proposal could be accepted tonight by the leader of the Minister of State's party. Year after year, however, she has refused outright to do so. Why? Could it be that the vested interests in the legal profession and the insurance industry exercise a major influence on the Progressive Democrats Party and the Fianna Fáil Party, to the extent that both are afraid to take on these vested interests who are crucifying our people, businesses, schools and communities? They have left us in a desperate crisis. For this reason alone the Government should not have been returned. Its re-election was an outrage given its dramatic failure in this area.
I ask that my colleagues address some of the other problems arising in the area of insurance. It is now time for action. We have had the so-called action plan launched with great fanfare by the Minister a few weeks ago. At the time I called it a damp squib and Deputy Hogan described it in similar terms. What has been achieved? What has been done? It is vital that the Minister finally starts to take the issue seriously. She talked a great deal about referring it to Dr. Fingleton and the Competition Authority. Why was such a plan not implemented three or four years ago? Why are we still waiting for the Minister, Deputy Harney, to take action on possibly the most important area of her portfolio? Her plan is belated. This plan should have been implemented years ago, as it will not have sufficient impact when it is finally implemented. We need an urgent plan of action.
I commend the Irish Insurance Federation on suggestions it made, particularly regarding fraud, requiring a sworn affidavit and an RSI number on every claim and addressing the outrageous legal fees we permit. We cannot allow the insurance industry to continue to operate as it has been. If a Deputy on this side of the House had been responsible for the management of the insurance industry, as the Minister has, Fianna Fáil and the Progressive Democrats would be calling for that person's resignation. It is past time that the Minister took action.