The new government clearly has an overflowing in-tray and at present speaking to journalists about its plans for the group risk industry is further down the immediate ‘to do’ list. Neither Wes Streeting, Secretary of State for Health and Social Care, nor Sir Stephen Timms, Minister of State, Department for Work and Pensions (DWP), accepted invitations from Corporate Adviser to be interviewed.
But, hopefully, Labour will prove more forthcoming in conversing with group risk insurers and trade bodies. And at least the submissions it has invited by September 10 for the October 30 Budget is giving the industry the chance to make their feelings known on important issues
Zurich has in fact already engineered contact on other fronts. This July, Tim Bailey, Zurich UK CEO, welcomed Swindon’s two newly elected Labour MPs, Heidi Alexander (Swindon South) and Will Stone (Swindon North), to its Unity Place office.
This move had more to do with Zurich’s support of the regeneration of Swindon’s town centre than it had to do with group risk. But the insurer is also hosting a policy round table with ministers and other stakeholders in conjunction with the New Statesman at this September’s Labour Party Conference.
Peter Hamilton, head of market engagement at Zurich, says: “We will be discussing the sorts of issues we have been highlighting, such as the cost-effectiveness and suitability to SMEs of the insurance model in procuring and pooling vocational rehabilitation. A total of 90 per cent of group income protection policies currently in force belong to SMEs, and around one-third cover businesses with fewer than 10 workers.”
Zurich is also unusual in highlighting an instance of where its group risk activities caught the attention of Labour prior to the election (see box opposite). Most other insurers’ attempts to liaise with the government and opposition MPs outside industry bodies tend to be shrouded in secrecy.
Rebecca Gladstone, head of public policy and public relations at Canada Life, says: “Insurers like us always ensure they have relationships with all the major parties. We developed relationships with Labour politicians before the election, but I can’t comment specifically on what form they took.”
But the key messages being put across during any contact with Labour politicians are likely to be broadly similar, especially in the light of ministerial comments about the need to achieve economic growth and tackle economic inactivity – which, according to Office for National Statistics data released this August, is currently at a rate of 22.2 per cent amongst UK 16-to-64-year-olds.
Government needs to be aware that group risk already offers a way of helping people back to work via its rehabilitation facilities and added-value services – which can both help boost economic growth and reduce strain on the NHS.
Ron Wheatcroft, technical manager at Swiss Re says: “Insurers understand how to provide support services to SMEs but probably need more help from government in terms of the recommendations it makes and information it puts out. The new government will be more focused on revenue generation than revenue spending, so, as with the last one, it’s unlikely to be realistic to ask it for more tax relief for group risk.”
The big unknowns
It remains unclear at the time of writing whether Labour intends to build on the work of the two occupational health consultations that closed last October: ‘Occupational Health: Working Better’, driven by the DWP and the Department of Health and ‘Social Care, and Tax incentives for occupational health’, through HMRC and the Treasury.
The fate of the resulting Occupational Health Taskforce, led by Dame Carol Black, is also still unknown. But there is noticeable optimism that most such unfinished business will be allowed to continue.
Katharine Moxham, spokesperson for Group Risk Development (Grid) says: “We recently responded to the Fit Note Reform call for evidence, which closed after the election on July 8, and I imagine the new government will carry on quite a few of the initiatives around health and wellbeing and getting people back to work.”
Reasons to be cheerful
The fact that much of the recent progress in these areas has been achieved by cross-party committee provides cause for optimism. And, in particular, the appointment of Sir Stephen Timms at the DWP is considered extremely welcome.
Timms made an excellent impression on the group risk industry during the previous four years whilst chairing the Work and Pensions Select Committee.
Gladstone says: “He has a huge amount of experience in the sector, and the Work and Pensions Select Committee under his leadership explored all of the issues around workplace protection in huge detail. His experience and expertise can only be beneficial to the DWP.”
Another encouraging sign is that the new Pensions Minister Emma Reynolds has a dual role at the Treasury and DWP. This could have knock-on implications for a group risk field that has long highlighted a lack of communication between different government departments as a barrier to progress.
Moxham adds:“P11D charges are a clear example of where the Treasury and the DWP seem to have been at odds. The DWP is pushing the importance of supporting peoples’ health and mental health, yet the Treasury ignores requests to extend the welfare counselling tax exemption status for family members and dependants under EAPs.”
Longer-term goals
But there is a general acceptance that significant positive changes impacting the group risk industry are unlikely to happen within Labour’s first term in office.
Steve Herbert, independent wellbeing consultant and communications coach says: “In the longer term the industry should also be lobbying for government to consider the benefits of an automatic enrolment approach for group income protection. This would take many years to introduce, and so is only likely to take effect in a second term, but would have multiple benefits for the nation.”
Prosperis head of employment benefit consulting Steve Ellis, is another firm advocate of income protection auto-enrolment but is not optimistic it will be introduced.
He says: “There’s as much chance of any progress for group risk under the new Labour government as there is of me being British Open golf champion.” Ellis plays off a handicap of seven — which may be impressive, but unlikely to cause pro golfers too many sleepless nights!
ZURICH GAINS LABOUR ATTENTION PRIOR TO ELECTION
This February, in conjunction with the Centre for Economics and Business Research, Zurich published research results highlighting the case for better recognition of the role of rehabilitation.
It revealed that one in three workers has a long-term health condition, costing the economy £32.7bn in 2023.
The insurer was keen for the campaign to have a broad reach, with audiences including politicians, consumers, advisers and opinion formers. And a statement issued by Labour MP Kim Leadbeater confirmed it had been noticed in political circles.
She said: “Zurich’s research shows the need to spread best practice among employers about how to prevent illness in the workplace through a national ‘health at work’ standard, including the provision of vital vocational rehabilitation services, to return the long-term sick to productive employment.
“As I set out in my Healthy Britain Report in 2023, I believe we need a much more comprehensive approach to the health and wellbeing of the nation, and increased support from employers will help unlock the full potential of the UK’s workforce and generate economic growth.”
