Minister: insurers as guilty as bankers over financial crisis

Trade minister Lord Davies has launched a blistering attack on the insurance industry, refusing calls for a cut in corporation tax and accusing insurers of being as guilty as bankers over causing the financial crisis.

Speaking at the Labour Party conference in Brighton last week, Davies sent a message to insurers, many of whom have been campaigning for a cut in corporation tax to improve the UK’s competitiveness.

He said: “We do have very competitive levels of capital gains tax and corporation tax. For those people that do not want to pay tax and want to get to tax havens, that is yesterday’s story. You’d better pay your tax like everybody else.”

In a further uncompromising statement, Davies said: “The message to the insurance industry is that you held long-term money. You were just as guilty as any industry of pushing the banks for ridiculous levels of growth.”

Hiscox chief executive Bronek Masojada said: “I’m quite interested in what Lord Davies (a former chairman of the bank Standard Chartered) has to say.

“The whole thing about this financial situation we are in is that none of the bankers has got the humility to say: ‘We got it wrong’.

Masojada continued: “They can’t accept their primary responsibility. They are trying to blame everyone else.

“For Lord Davies to blame insurers, I just don’t understand it. He should worry about the fact that firms such as WPP [an advertising company] have moved their head offices away from the UK because of the various arrangments there.”