Government's mixed messages bemuse

Insurers must be confused at the moment when it comes to the public pronouncements from the government on what it is doing behind the scenes as it looks to cut costs and curry favour with certain causes.

Last week, Post Magazine reported that while the Compensation Bill was not amended to include compensation provision for pleural plaques claimants, Bridget Prentice, the Parliamentary Under Secretary of State for Constitutional Affairs, muddied the whole picture by hinting it could be covered under further legislation (20 July, p1).

The Association of British Insurers, which had already publicly said it was relieved that the government had seen sense was then forced to pick up the phone and ask Ms Prentice's office to clarify her statement. This has been backed up by Lord Hunt of Wirrall this week.

If this was not bad enough, the government's dedication to climate change, specifically flood defence spending, has also come under scrutiny, with PM reporting growing concerns that the budget could be cut (20 July, p1).

This has already been seized upon by rival parties, with the Liberal Democrat environment spokesman Chris Huhne saying that failure to invest during the next spending review could leave householders without flood insurance. He has written to Environment Secretary David Miliband asking for guarantees that ministers will stick to their deal with insurance companies. In it he writes: "It would send out a counter-productive signal that the government is not taking climate change seriously. We need sea and flood defences, together with tougher building standards, to withstand more extreme weather events."

With time closing on Prime Minister Tony Blair's reign, it would seem his legacy as far as the insurance industry is concerned could be one of false promises and the raiding of coffers, unless his team can pull a few surprises out of the hat.