Insurers warn that fire reforms would drive up home premiums

Barrie Clement,Labour Editor
Saturday 25 January 2003 01:00

Insurance premiums could soar because of ministers' plans to reduce fire cover, the Government is being warned.

There could be "considerable" increases in costs for householders and businesses if ministers insist on adherence to the Bain report, according to a letter sent yesterday by insurers to John Prescott, the Deputy Prime Minister.

Meanwhile a settlement of the fire dispute seemed as far away as ever. Talks broke up ahead of two 48-hour strikes scheduled for next week. At the heart of the dispute remained the Government's backing for the report, which the Fire Brigades Union estimates would cost 4,500 jobs. Insurers are particularly worried by the report's suggestion there should be a switch of resources away from city centres at night when office workers have left.

Jonathan O'Neill, managing director of the Fire Protection Association, which represents insurers, was incensed by remarks attributed to fire authority officials asserting that response times to a fire at a city centre bank were unimportant because there was no one in the building and it would be insured.

He said: "A lot of businesses do not recover after a major fire. If they are going to get rid of 4,500 firefighters and they are mainly lost from city centres, the effects could be considerable." Mr O'Neill said the Government seemed to be determined to introduce change at an "extraordinary pace".

Concern has also been expressed about proposals in the Bain report to charge insurers for the attendance of firefighters at road crashes. Premiums soared by 15 to 20 per cent two years ago when the NHS started to impose charges for attending such accidents.

Firefighters are planning 48-hour strikes from next Tuesday and from next Saturday unless there are signs of progress in negotiations.

¿ The building workers' union, Ucatt, tabled a pay claim yesterday for a 62 per cent rise to £12 an hour. It followed a deal to pay workers building terminal 5 at Heathrow airport up to £55,000 a year.

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