Chester Street Holdings Ltd.

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 1 March 2001.

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Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone 12:00, 1 March 2001

If he will make a statement on Chester Street Holdings Ltd., previously known as Iron Trades Holding Ltd. [150147]

Photo of Miss Melanie Johnson Miss Melanie Johnson Economic Secretary, HM Treasury

The Government understand the concern of those suffering from asbestos-related disease as a consequence of employment in firms whose employers' liability insurance has been provided by Chester Street Holdings Ltd.

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

I thank my hon. Friend for that answer. I also thank her for meeting my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) and me yesterday to discuss the issue. As she is aware, it appears that Iron Trades dumped the asbestos liabilities into Chester Street Holdings in 1990. The company continued trading until the late 1990s, when it was sold to an Australian insurance company.

The insurance protection board will provide some protection for some of the cases, but the pre-1972 cases—that is, cases of men exposed before 1972—may not be covered by the protection system. Will my hon. Friend therefore set up an inquiry into Iron Trades? Will she also consider how she might urge the insurance industry to work with the Government with the aim of ensuring that each claimant gets compensation in full?

Photo of Miss Melanie Johnson Miss Melanie Johnson Economic Secretary, HM Treasury

As an insurance company, Chester Street—and Iron Trades before it—was authorised to do business in the UK, and has been supervised by insurance regulators to ensure that it meets the requirements of the Insurance Companies Act 1982. Since 1 January 1999, the FSA has been responsible for prudential supervision of insurance companies.

The Policy Holders Protection Act 1975 offers protection for compulsory employers' liability insurance policies, which are required under the Employers Liability (Compulsory Insurance) Act 1969. It is the employer who holds the policy with Chester Street, not the employee. The employer remains liable for claims made against it by employees or former employees. It is for the employer to establish whether any further protection is required under the 1975 Act, to the extent that Chester Street is unable to meet the terms of the insurance contract in full.

I am aware of the problem mentioned by my hon. Friend of the pre-1972 claims. The Treasury is considering that issue.