Labour conference: Alarm as industry plots to top up welfare ‘safety net’



Leading figures in the insurance and outsourcing industries have told a controversial seminar that they are not trusted by disabled people or the general public.

They were taking part in a seminar* sponsored by the Association of British Insurers, organised by the centre-right think tank Reform, and attended by Anne McGuire, the shadow minister for disabled people.

The seminar, at Labour’s annual conference, also heard from charities and think tanks, but McGuire’s presence at the invitation-only event angered some disabled activists, who believe that political parties are too close to the financial services industry.

Campaigners have shown through their research how parts of the industry have spent years influencing welfare, health and other government reforms.

The key theme of the seminar was how the financial services industry can play a bigger part in topping up the “safety net” provided by the welfare state.

Participants explained how government spending cuts and an ageing population would make it harder for the social security system to provide support to people in need.

They said the industry would have to work with government and employers to ensure people have access to the necessary financial protection.

One suggested that there would be a “potential saving” for the government if it persuaded more people to “protect themselves and therefore to draw down less from the state in the long term”.

Another said that income protection insurance – the private insurance equivalent of employment and support allowance – was a “very important area in trying to give people more financial resilience as they deal with the financial challenges of life”.

He said that the insurance industry was “very open-minded about how that could be developed from here”.

But he also warned that the industry needed to “demonstrate it can be trusted” again by the public.

He said: “If the industry wants to be a larger part of this change it needs to understand it has a social responsibility as well as a contractual responsibility.”

McGuire said that just holding the seminar was seen as controversial by many disabled activists, because of the “distrust of politicians and probably of many of you round the table today”, including those in the insurance industry and those who delivered government programmes.

She said Labour was moving towards the idea of a national disability insurance system, based on the one introduced in Australia.

She said: “I think there is a major challenge for the financial services. You guys are seen as selling a product and not being part of a social partnership.”

And she told her fellow delegates that they needed to do more to become part of a social partnership with individuals and the government.

She said: “Up until that time you will be seen as selling a product and selling a product for profit.”

She said she hoped they could “deal with those issues of trust to bring us to a situation where we can have partnerships”, which “would be good for you businesses”, because the “disabled pound… is good for business”.

McGuire said there was a need for a “mature conversation with the general public” about their “realistic expectations” of what levels of social security the state could provide in the future.

She warned: “There has been an expectation… that the state would provide. The demographic has changed and the state is not in a position to provide in a way that was expected. To unpick it is going to take a lot of discussion, a lot of frankness.”

Another speaker told fellow participants that their industry was not trusted.

He said: “We are not trusted by disabled people and we are not trusted by the greater public and that is really unfortunate because… we are delivering a service for the government, but we also need to ensure we do that with dignity and professionalism.

“What we have found in recent years is disabled people, older people, people on benefits, get less and less dignity [when receiving]professional services.”

And he said his company and other service-providers had “a responsibility to stand up to government when asked to do things that are inappropriate and do not help the service we provide”.

*The seminar was held under the Chatham House Rule, which meant that only the conversations, and not the names of the participants, could be reported, except for Anne McGuire, who gave her permission to be named  

26 September 2013