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Government to probe Labour's insurance mis-selling claims Government to probe Labour's insurance mis-selling claims
(35 minutes 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.
But the industry said such firms are doing nothing wrong or illegal.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 - Gee 7 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.
However Gee 7 denied being involved in such insurance policies.
"We have never ever got involved in temporary accident cover," said Jon Pardoe, the managing director of Gee 7.
"We are aware of companies that do it, but we've always disagreed with the principle," he told the BBC.
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.
Cover 'appropriate'Cover 'appropriate'
The Recruitment and Employment Confederation (REC), which represents recruitment agencies, said the companies concerned were offering a useful service.The Recruitment and Employment Confederation (REC), which represents recruitment agencies, said the companies concerned were offering a useful service.
Tom Hadley, the REC's director of policy, said many trade unions offer similar products.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."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.""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.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.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."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.