Clause 2 - Statements of Inherent Risk
Promotion of Volunteering Bill
9:30 am
Miss Judy Mallaber (Amber Valley, Labour)
At the end of our previous sitting, I was exploring the scope of the Bill after listening to the arguments about the amendments. On specific aspects of the Bill, I was concerned—as are other members of the Committee—that nothing in it should lead to adverse consequences in respect of what we all wish to achieve and to make sure that it will have the desired effect and not lead to bureaucracy and costs for voluntary organisations and volunteers.
I am worried about the scope of the part of the Bill that is the subject of the amendments. I appreciate that producing a statement of inherent risk is voluntary and that the hon. Member for Canterbury (Mr. Brazier) took care when drafting the Bill and subsequent amendments to ensure that such a statement would be voluntary. Many organisations will consider a risk so negligible in their circumstances that they do not feel the need for a statement and do not want the burden of having to produce one. However, given my experience of insurance companies, there is a serious danger that they will put pressure on any organisation that is eligible to provide a statement to do so, as a belt-and-braces job.
I realise that the Bill has come about because of court cases, out-of-court settlements, bizarre and unacceptable situations, and the view that such matters have stoked up insurance costs. However, in my experience, insurance companies can make bizarre decisions that are not necessarily based on an analysis of whether a particular organisation or individual really falls within the category of risk on which they base their premium. It is therefore likely that they would wrongly categorise a broad range of voluntary organisations as needing a statement of inherent risk. In that categorisation, insurance companies could catch organisations that do not wish to be caught and those that we are not seeking to push into making such a statement.
I thought of such matters at our previous sitting when I remembered firms in my constituency that had difficulty in obtaining employers' insurance and public liability insurance in the post-9/11 insurance world. One company, which made hand-produced guitar strings in a small workplace next to the owner's home in a Derbyshire village, was denied insurance simply because it was selling goods to, among other countries, the United States of America, even though it was hardly a firm that would be threatened by international terrorism, which presumably was what that category of risk was meant to catch.
A second example was a firm classified as being in the construction industry, which we know is unsafe and which might have high insurance premiums, but which did not do its work on a building site, but produced materials used on building sites.
I am worried that insurance companies might with similar inaccuracy lump small voluntary organisations into a category alongside sporting and adventure groups in which they need to provide a statement. My concern is based partly on my experience of how insurance companies have wrongly categorised firms and individuals in areas that do not relate to the level of risk for the premium that they are asked to pay. Insurance companies are often too lazy to undertake a more sophisticated analysis of actual risks relating to a particular organisation. I am not convinced that they will be mollified by the commendable protections put forward by the hon. Member for Canterbury to strengthen the voluntary nature of the Bill. We need to limit the scope, and I would err on the side of caution because I am not confident that insurance companies will accurately consider the risks of particular organisations.
My right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) made a convincing case about why amendment No. 38 is too narrow; he said that it does not mention play activities. I feel that I have to support amendments Nos. 39 and 55, although I understand that hon. Members may be reluctant to leave the measures to subsequent scrutiny. However, it may be possible to refine the provisions later in the course of the Bill.
I am genuinely concerned about how insurance companies will operate in cases in which a category that does not want a statement of risk is entitled to one under the Bill. Judging from previous experience, and
from the crude way in which insurance firms often categorise companies and people, I worry that they will insist on sweeping them into the Bill and making them do what they do not want to. We always speculate on exactly what a Bill's impact will be, but although we cannot be sure of the impact of this one, I would hate to add new problems to those of voluntary organisations and volunteers who might otherwise not be affected. I think that there are arguments for attempting to limit its scope.