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Government will discuss fund for insurers' disaster losses

Monday 12 July 1993 23:02 BST
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THE Government will consult this summer about setting up a reserve fund to help the insurance industry cover disaster losses, Stephen Dorrell, Financial Secretary to the Treasury, told the Commons last night.

He was speaking during the report stage debate on the Budget-enacting Finance Bill, which includes measures to set up such a system for Lloyd's.

'We are not bringing forward these proposals in response to short-term considerations at Lloyd's and we are certainly not bringing them forward motivated by a desire to create a tax shelter,' Mr Dorrell said.

'To talk about this package as a great tax break for Lloyd's names simply does not agree with the facts.'

Alistair Darling, for Labour, welcomed government changes to the Bill which, he said, would prevent the Lloyd's reserve fund from being used as a tax shelter by its investors.

The names should not be discriminated against, but neither should they be given unduly favourable treatment, he said. Many Tory MPs were unable to look objectively at the City or Lloyd's 'because so many of them have a vested interest with their wealth tied up there - and that is a thoroughly intolerable situation'.

The Government's own judgement was impaired because 'at least four members of the Cabinet are also Lloyd's names'.

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