I thank the Minister for his helpful explanation. It is right that we do not pay ransoms and that insurance companies are not allowed to do so. The Bill proposes to make it illegal to make payments on ransom insurance policies, and that is an argument I support and do not wish to argue against this evening. However, I do want to ask him a couple of questions.
Will the Minister tell the Committee how he has consulted with insurance companies on the impact and implementation of these measures? The Government’s own impact assessment makes it clear that there is a risk that:
“UK insurers/reinsurers may lose business. Overseas insurers may be able to offer the same product as UK insurers but without this restriction. Based on consultation, we estimate…UK insurers/reinsurers’ annual gross premium income from kidnap and ransom insurance policies to be between £60 and £160 million.”
a year. There are two issues I want to raise. What response has he had from insurers on their potential loss of £160 million? I am particularly concerned about whether the measure will simply transfer that insurance risk to companies that operate abroad.
I want clarity on clause 34, which makes it a criminal offence for people in the UK to take out ransom insurance. If a UK citizen insured themselves through a foreign company, would the provisions still apply? The Minister has mentioned extraterritorial reach, but I want to be clear that the Bill does not deny UK insurance companies the premiums of £60 million to £160 million by simply transferring the fund to foreign companies. Will the provision apply to a company based in the UK but whose policy could be placed with an insurance underwriter based in America, France or Rome? I would be interested to know whether all those aspects are covered. I am sure the Minister will be able to allay my concerns and fears.
As an Opposition spokesman I continue to support the straightforward principle—I supported it when I was a Minister—that we do not pay ransom demands, because they simply encourage further kidnappings and associated activity. Does the Bill cover other areas, such as a kidnapped oil worker? We may not pay a ransom, but there might be insurance issues related to covering his loss of salary or his mortgage payments. I want to be clear that the measures cover the issue of ransom, as opposed to other insurance matters that a responsible company would want to implement.
Finally, the Bill has a clear definition of terrorism, but I would welcome the Minister’s view of, for example, Somali pirates. They are not terrorists, but does the definition cover the payment of ransoms in general, or is its focus on terrorism alone? If the Minister wishes to table further amendments, I would be happy to support measures that address other types of ransom, because it is a cardinal principle that we do not pay ransoms in any way, shape or form for individuals who have been kidnapped. I do not quite understand the Minister’s approach to insurance payments, helpful though it is, and I would welcome an explanation of his position on other types of kidnap ransoms.
We support clause 35, which is a sensible measure. I do not need to say anything else. I hope the Minister will respond to my comments.