Parliamentary activity

Answering body: Department for Business, Energy and Industrial Strategy

FRS 27 has addressed many of the critiques made by the Penrose Inquiry in the development of IFRS 17, except for the differences between the accounting bases for regulatory and financial reporting. Insurance is inherently a complex business so some complexity in the related financial reporting is inevitable. However, a standardised basis for financial reporting will go a long way to addressing concerns related to complexity.

The Penrose Inquiry also identified regulatory failures to restrain the hazardous conduct of firms and to protect stakeholders. The Financial Services Authority (now the Financial Conduct Authority) took the recommendations from the report to enhance the solvency and liquidity requirements and set other boundaries more tightly in the Solvency II legislation.

The accounting basis for regulatory purposes is not within the remit of the IFRS Foundation and regulatory reporting is not designed to report performance. The Prudential Regulatory Authority has responsibility for promoting the safety and soundness of insurers and the protection of policy holders.

Answering body: Department for Business, Energy and Industrial Strategy

The Penrose Inquiry into Equitable Life focussed on UK financial and regulatory reporting in the years leading up to 2001, and how they related to the Equitable Life Assurance Society.

The Inquiry identified that life insurance company accounts needed a consistent and realistic accounting basis for the preparation of accounts. They recommended the creation of consistent standards for the preparation and presentation of accounts for long term business. The IFRS Foundation has stated that this was a key aim when developing and publishing IFRS17. In order to make insurers’ financial statements more useful for users of financial statements.

Answering body: Department of Health

Before 1991, thousands of patients contracted HIV, hepatitis C, or both viruses, from treatment with NHS-supplied blood or blood products. This is aptly described by many as one of the great tragedies of modern health care and on the 25 March 2015 the Prime Minister apologised on behalf of the government to all those that were infected. I would like to start by repeating this sentiment and state, on behalf of this Government, how sorry we are for what happened and for the distress caused to those affected and their families.

In March, Lord Penrose published the report of his public inquiry into infections acquired in Scotland. As infection occurred before devolution, this is of relevance for the Westminster Government. Lord Penrose scrutinised events over a period of nearly 18 years between 1974 and 1991. The Report, together with over 5,000 documents from the period 1970-85 which have already been published by Government provides a comprehensive picture of events and decisions made. We have also committed to releasing all additional documents from 1986-1995 late this summer.

Lord Penrose made one recommendation: to take all reasonable steps to offer a hepatitis C test to everyone [in Scotland] who had a blood transfusion before September 1991 and who has not been tested for hepatitis C. In England, guidance to GPs has been issued over the years by the Department of Health, the NHS, and other health organisations which recommend that a hepatitis C test should be offered to patients who received a blood transfusion in the UK before 1991 or were treated with blood products before 1986. This can currently be found on the NHS Choices website. In light of Lord Penrose’s recommendation, the Department will be acting to ensure that GPs are reminded of this duty.

The terms of reference of the Penrose Inquiry did not include financial support for those affected. However for some time we have been listening to the many concerns about the existing arrangements and have been considering how we might improve that support. Concerns have been raised by individuals that have been affected, MPs, and the All Party Parliamentary Group (APPG) on Haemophilia and Contaminated Blood, and include: the complex nature of the organisations, and the criteria for, and charitable nature of, some payments. I would therefore like to briefly acknowledge the work of all the MPs who have raised the profile of this tragedy. Most significantly, however, I would like to recognise the work of affected individuals, and their representatives, who have tirelessly campaigned for many years.

On the 25 March the Prime Minister also announced that £25 million would be allocated to ease transition to a reformed system of support for affected individuals. While no decisions have yet been made on how this money will be spent, I must emphasise that the money will not be used for administrative costs, but will be used appropriately to support any transitional arrangements once we have consulted on how a new scheme might be structured.

Transition to a reformed scheme remains a priority for this Government. Decisions on the overall DH budget from 2016-17 onwards will be determined as part of the forthcoming Spending Review.

While I understand that beneficiaries to the current schemes may be frustrated by this wait, this is an extremely complex and sensitive area and any reform plans must be carefully considered before a consultation can be launched.