We’ve given you the
lowdown on the UK Budget 2017; now it’s reaction time.
First things first: While it seems anti-climactic that Chancellor Philip Hammond kept mum on the Insurance Premium Tax (IPT) – a hot topic leading to the Autumn Budget – it is perhaps a welcome development for now. No reductions, yes, but at least no increases were announced either.
So what does the industry think?
“More maths for everyone,” Hammond quipped. For the Chartered Insurance Institute (
CII), this is positive news. Here’s why: “We welcome the emphasis on maths education and retraining in the Budget – in the long run relevant skills are more important for prosperity than eye-catching tax breaks,” commented Dr Matthew Connell,
CII’s director of policy and public relations.
“Building strong professional and ethical skills alongside basic numeracy will be crucial,” explained Connell. “The digital economy provides new challenges to corporate governance – in terms of maintaining privacy and security and processing information in a fair and responsible way.
“We are committed to building these skills throughout the insurance profession, and look forward to working with the Government to achieve these aims.”
IPT status quo
As for the ‘non-announcement’ – which contradicted earlier fears about possible IPT hikes –
Ecclesiastical’s David Britton said it’s good news for charities, the firm’s clientele, that there are no further rate rises.
“Buying insurance is an unavoidable cost for charities; either because they are legally required to, or because they are acting responsibly by putting adequate protection in place for their activities and assets,” noted the insurer’s charity director. “The doubling of IPT in the past two years up to 12% has been very hard to take for charities and any further increases would have been devastating.”
Stressing its call for a reduction in IPT, Britton said: “We will continue to work hard alongside the Charity Finance Group (CFG) to raise awareness of the negative impact of IPT on the work that charities do and to urge the government to consider an exemption or reduction for third sector organisations.”
For Rodney Bonnard, UK insurance leader at EY, “no direct changes for the industry” means a sigh of relief from the sector, saying “this time all was calm.”
Drive towards autonomous vehicle technology
Earlier we told you about the
features and performance criteria set out by insurers in the UK to define an automated vehicle. Budget 2017 discussed the future of driving on British roads, essentially supporting the move to go autonomous.
“A concerted effort to turn the UK into a world leader in autonomous vehicle technology, which forms a key part of the Chancellor’s pledge to bolster UK technology more broadly, is absolutely the right thing to do – as is clarifying regulations around how driverless cars can be road tested,” commented David Williams, technical director at
AXA UK.
Williams continued: “The UK is at the forefront of a transport revolution that will save lives and offer mobility solutions to those unable to drive. Strangely, a Budget pledge which didn’t make the Chancellor’s speech may be one of the most important for the future of British manufacturing and the economy.”
For Clyde & Co partner Mark Hemsted, a clear definition of an autonomous vehicle is necessary in order for a “fully workable insurance system” for such vehicles to be implemented, noting concerns that the workable definition to be provided by the Automated and Electric Vehicles Bill might be too broad.
“We expect to see insurers and manufacturers agree a recovery process so that insurers can easily claim from manufacturers when an autonomous vehicle is at fault,” said Hemsted. “While the Bill retains quick and easy access to compensation for claimants, insurers need an equally efficient system of recovery.”
Similarly, EY asked: “When cars are fully autonomous, who is responsible for a crash? Will customers and insurers look to the car makers, and therefore expect them to package insurance with the car itself? This Budget asks for those questions to be answered as soon as possible.”
Related stories:
Pressure piles on Chancellor Hammond over Insurance Premium Tax
Higher Insurance Premium Tax means less money for charity work
