The Guardian recently revealed that car insurance companies made a £5,000 payout to Jack Straw, the former Labour cabinet minister, for a three hour appearance where he gave a speech and then answered questions.
Mr Straw did not disclose this £5,000 payment when amendments that would have an impact on such discount car insurance providers were tabled recently, a fact that has raised the ire of many critics. The former home secretary made the appearance on September 28, sitting on a panel of experts and discussing the ‘dirty secrets’ that result in car insurance rate increases.
Mr Straw has been campaigning long and hard to ban ‘referral fees’ within the insurance industry since the summer in an effort to eliminate the payment scheme. Under the current regime, claims management firms will engage in activity that has been called ‘ambulance chasing’ in order to obtain the personal details of accident victims and then sell on the information to insurers and injury lawyers in the form of referral fee payments.
Mr Straw said that both the value and number of personal injury claims have grown phenomenally due to the ‘high pressure sales techniques’ employed by these management firms. As a result, claims costs incurred by insurers have rocketed, which has then led to premium price increases handed down to motorists in order to recoup mounting losses.
The former home secretary informed the Guardian that he was under no obligation to declare the payments as he had not yet received his payment for the appearance. Mr Straw said that has declared four payments so far, which will appear in the register of members’ interests, yet these payments will not be published until after the amendment will have been voted on by MPs.