ABI to lobby the government on taxation of reserves

The ABI has remained tight-lipped about its meeting with the chancellor, Alistair Darling, last week, saying only that it was constructive.

A spokesman said: “It was a constructive discussion and the start of improved dialogue with the Treasury.”

The trade body used the one-hour meeting, which took place at its headquarters on Wednesday, to tackle the issue of taxation on the foreign profits of UK multinationals.

Topics under discussion also included plans for long-term competitiveness in the industry and financial regulation in the wake of the Northern Rock debacle. Flooding and climate change were also on the agenda.

Last week the ABI secured a victory when an industry representative, AXA UK chief executive Nicolas Moreau, was named to the government’s 14-member tax forum.

The ABI has said it intends to lobby the government on taxation of reserves. Excessive reserves are not currently taxed, but the ABI believes the government is about to introduce taxes in this area.

Prior to the ABI’s meeting with the Chancellor, floods recovery minister John Healey hit out at insurers for not doing enough to rehouse flood victims.

In a sharp rebuttal, Nick Starling, the ABI’s director of general insurance, said that the ABI had met with Healey regularly and was caught off guard by what Starling believed were unfounded comments. He said he had written to the communities and local government department about the incident.

But it is thought the ABI’s meeting on home turf with the Chancellor went more smoothly.