Insurance firms were targeted by MPs following a report by insurers’ association Transport Select Committee, which revealed that firms are paid a fee for referring the names of people involved in car accidents onto lawyers. The person involved in the car accident may then be persuaded to sue for compensation, it was claimed.
The Transport Select Committee believe that the “compensation culture” was behind the current rise in legal costs and that more needed to be done to tackle the issue. The association believe that motorists are paying the price, estimating that £40 a year is added to average motor premiums because of the rise in legal costs.
Fraudulent injury claims was another issue that came to light in the report, with the association believing that staged car accidents were increasing the cost of car insurance. The Transport Select Committee believe that a special police unit dedicated to sniffing out fraudulent claims would solve the issue, but this would have to be funded by insurers.
There were also calls for more transparency on referral payments because consumers are unaware of where their money goes within the insurance industry.
With car insurance costs on the increase, it is vital that the UK’s “compensation culture” is tackled, ensuring that more is done on seeking out the fraudulent injury claims that are causing extra costs to motorists.
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( 3 / 169 )Following a nine-month landmark review of pension reforms, retirement plans for public sector workers will be shaken up with new recommendations given to the government by Lord Hutton.
From 2015, hundreds of thousands of public sector workers, such as doctors, teachers and civil servants, would be denied early retirement and will be expected to retire at the state pension age, which by 2020 it is expected to rise to 66. For public sector workers who can currently retire in their fifties or younger, such as firemen, armed forces and police officers, they would be denied a pension until they reach the age of 60.
A cap on taxpayer contributions to public sector pensions may also be called, which will mean employees will be forced to pay considerably more into their pension.
Generous final-salary pension schemes would also bite the dust and instead be replaced by a career average earnings system. As reported in yesterday’s blog, the schemes have already largely been cut by employers in the private sector.
If the new rules are implemented by the government, they have been told to expect a mass departure of workers in their fifties who would quit their jobs in the public sector rather than be forced to work for longer than they had initially planned.
As life expectancy rises, public sector pensions have started to become increasingly unaffordable, which lead to Lord Hutton being asked by the government to put together plans for the future of pensions in the public sector.
With the cost of public sector pensions currently running at £30 billion and life expectancy on the increase, the government need to make changes, similar to the changes that have been made within the private sector.
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( 3 / 173 )Final-salary pension schemes are set to be a thing of the past. The desirable and beneficial schemes are being closed down by private-sector employees at a record rate, according to a new report.
The report by the National Association of Pension Funds (NAPF) revealed that vast amounts of existing staff, and new employees, will lose out on the scheme because employers want to move staff onto cheaper retirement plans. The annual survey by NAPF showed that 17% of final-salary schemes had become unavailable to existing and new members of staff.
The record jump from previous surveys by NAPF, 7% in the 2009 survey and 3% in the 2010 survey, could mean that is the end of the line for the much-coveted pension scheme. The survey also revealed that a third of employers are planning to make changes to their final-salary scheme by shutting it down altogether or making cuts to benefits that had previously been guaranteed.
It seems that younger staff will be facing the biggest cuts in contributions from employers, as many older staff keep their guaranteed benefits. The NAPF believe that pension schemes have been under huge pressure to cut costs because of market returns and higher life expectancy.
The government has been criticised by unions for letting one of Britain’s most highly regarded private-pension system collapse. In a government review, Lord Hutton will tomorrow issue a report in public-sector retirement plans where he is expected to recommend a retirement age of 65 across the board.
It may come to a point where many employees, especially the younger members of staff, will not have the benefit of building up to a final-salary pension to ensure a good retirement. Contributions will have to be set at the highest level in order for the cheaper alternative retirement plans to provide the same financial security.
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( 3 / 183 )Is Prince Andrew the right man to be representing British business to the rest of the world?
Many have been asking this very question, even the government, who are currently reviewing the Duke of York’s role as special representative for UK Trade and Investment. This is due to the escalating media speculation over his links to controversial business figures.
Recent tabloid headlines have been particularly damaging to the Duke, in particular his friendship with convicted sex offender Jeffrey Epstein.
It is important, of course, that the government does not upset the Royal family. They are currently devising ways to take some of the heat off the situation. However, a recent operation to save Prince Andrew’s reputation backfired after many tributes to a list of “company endorsements”, compiled by his private office to show his performance as special trade envoy, were four years old.
Downing Street has also attempted to dismiss reports that the government were about to downgrade the Duke’s role, with David Cameron’s spokesman stating that the Prime Minister had complete faith in the Duke. This also backfired after No 10 insiders made it clear that his position would become indefensible if more damaging details came out in the press.
Prince Andrew has long been a target of the British press. With having such a high profile role as a trade envoy it is vital that media speculation dies down or else the reputation of British business will be effected. With the UK’s current economic situation, damaging reports over Prince Andrew’s private dealings with various business figures is yet another hindrance.
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( 3 / 191 )Along with the continuous struggle to obtain credit from the UK banks, one of the biggest problems that confront small businesses is the number of regulations imposed by the public sector.
It seems private sector firms have at last gained much needed support from the most powerful political figure in the UK. Prime Minister David Cameron gave a speech at the Conservative Party spring conference in Cardiff where he vowed to personally confront civil servants and other “bureaucrats” who continue to impose needless regulations on private sector firms, with an aim to free businesses from unnecessary red tape.
In the speech, which the majority being devoted to Government promises to help the economy grow, the public sector and Whitehall officials were the targets of Mr Cameron’s confronting criticism, who he believes are “loading costs onto businesses”.
The Prime Minister declared that creating and running a profitable business in the UK is morally and socially right. Mr Cameron also stated that he would be watching UK banks closely to ensure that they are lending more to companies in the UK and changes are made to their business models.
The speech reflects the Coalition government’s frustrations towards the performance of public sector officials, and some ministers privately believe that civil servants stand in the way of their pro-growth policies.
The “enemies of enterprise” are set to be personally challenged by the Prime Minister who believes they are obstructing the path to economic growth by impeding private sector firms.
The speech was thought to be a scene setter for next month’s “Budget for Growth”. The strong words from Mr Cameron will hopefully be followed with strong actions. If this speech was setting the ground for the “Budget for Growth”, it does bring hope that there will be good news for small businesses.
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