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Government to probe Labour's insurance mis-selling claims Government to probe Labour's insurance mis-selling claims
(about 1 hour later)
The government is to investigate claims that some of Britain's top employment agencies have been mis-selling insurance to thousands of workers.The government is to investigate claims that some of Britain's top employment agencies have been mis-selling insurance to thousands of workers.
The move follows claims in the Commons that top employment agencies have been needlessly selling personal accident insurance to low-paid workers.The move follows claims in the Commons that top employment agencies have been needlessly selling personal accident insurance to low-paid workers.
The shadow business secretary Chuka Umunna accused the agencies of "profiteering" out of the practice.The shadow business secretary Chuka Umunna accused the agencies of "profiteering" out of the practice.
He said the companies concerned employ over 100,000 workers. But the industry said such firms are doing nothing wrong or illegal.
Mr Umunna named six agencies - Blue Arrow, Acorn, Taskmaster, Randstad, Meridian and Staffline - as being involved in the practice.Mr Umunna named six agencies - Blue Arrow, Acorn, Taskmaster, Randstad, Meridian and Staffline - as being involved in the practice.
He said the insurance was often sold to workers on the Minimum Wage. He said that the personal accident policies were often not needed as workers were already covered by their employers.He said the insurance was often sold to workers on the Minimum Wage. He said that the personal accident policies were often not needed as workers were already covered by their employers.
"There is even a company - G7 Group - which specialises in putting together these dubious arrangements for agencies," Mr Umunna said in the Commons. "There is even a company - Gee 7 Group - which specialises in putting together these dubious arrangements for agencies," Mr Umunna said in the Commons.
The business secretary Vince Cable said if the practice had been happening, "it would be indefensible, and I think it is unlawful".The business secretary Vince Cable said if the practice had been happening, "it would be indefensible, and I think it is unlawful".
"I will commit to ensuring that we have a proper enforcement procedure," said Dr Cable."I will commit to ensuring that we have a proper enforcement procedure," said Dr Cable.
He added that the companies would be investigated, and that he would also consider a more broad-based enquiry.He added that the companies would be investigated, and that he would also consider a more broad-based enquiry.
Kevin Green, chief executive of the Recruitment and Employment Confederation, the organisation that represents the industry, has previously defended his members. Cover 'appropriate'
He told the BBC last year that companies were "not selling insurance, they are giving people the opportunity to take insurance up". The Recruitment and Employment Confederation (REC), which represents recruitment agencies, said the companies concerned were offering a useful service.
"They are explicitly clear that they don't sell this activity," he insisted. Tom Hadley, the REC's director of policy, said many trade unions offer similar products.
"Let's be clear, employment agencies are not doing anything wrong by offering workers the opportunity to purchase accident insurance," he said.
"It's a product that many other organisations offer to their members, including trade unions."
But he added that profiteering was a very serious allegation, and asked Mr Umunna to hand over any evidence he has about the organisation's members.
He also said that many workers need insurance, to cover them for accidents when not at their place of work.
"Personal accident cover can be appropriate for workers in high risk sectors such as rail and construction and can also cover them for accidents off-site that would prevent them from working," he said.