My Lords, I shall speak to Commons Amendment 3 and shall make a general point about all the amendments in the round. I declare my interests as set out in the register—in particular, those in respect of the insurance industry. I would very much like to add my thanks to the Minister, the noble Baroness, Lady Vere, and the Bill team, who have been very courteous and warm as they have engaged with me, particularly on Amendment 3.
We spent a lot of time discussing the area covered by Amendment 3 in Committee and on Report, and even slightly at Third Reading. The amendments suggested in this House—there were quite a few of them—had a common theme: they were short and clear, and they instructed the FCA to act, as it were, as the scorer and to work out how it would ascertain whether insurers had in fact handed the money back to customers.
The section of the policy note, which the Minister referred to, entitled “Context and overall approach to amendment” refers to an intent to:
“Hold insurers to account in a way that is sufficiently rigorous”,
and to:
“Avoid intervening in an already competitive market or placing disproportionate burdens on insurers or regulators”.
I am very grateful to the Minister for confirming that those should be the guiding principles for the FCA as it begins to consider the best way to discharge this duty. I find the three pages of new Clause 11 pretty difficult and they are potentially extremely onerous for insurers. I note that, depending on how you construe new subsection (2), insurers might also have to report on every single comprehensive household policy they have, because injury cover is possibly included in that. I could make other points on that too.
We now know that this amendment was drafted by a committee full of highly intelligent people, including insurers, obviously very intelligent lawyers, accountants and officials. Of course, we all know that when you put a committee together, you get a camel, and I am afraid that it is a bit of a camel. However, I say again that I am very grateful to the Minister for confirming that the policy note will trump what is in the legislation, as that is important.
That leads on to my general point about the Bill. In Committee I referred to the 2016-17 annual report of NHS Resolution. It stated that moving the discount rate from +2.5% to -0.75% meant that the cost of
medical negligence in the UK every year would rise by an extra £1.2 billion. That means that every day £3.3 million is not being spent on the NHS front line. If the personal injury discount rate, which is in Part 2 of the Bill, went up—perhaps not all the way up to 2.5% but maybe to 1%, which is currently the case in France—that would release around £1.75 million a day to the front line of the NHS. In a nutshell, the quicker this Bill passes, the better. My one question for the Minister is whether he agrees with that point.
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