UK riots could cost taxpayer £100m

Damage to retailers and homeowners after riots in London and elsewhere to be paid for by police authorities under 1886 act Taxpayers could face a £100m bill as a result of the riots seen in London and across the UK, with police authorities facing the prospect of picking up insurance costs for damage done to properties across the country. Retailers and homeowners were coming to insurers on Tuesday with the huge damage done to their properties and businesses as a result of three days of rioting in the capital and elsewhere. Shops around the capital were shutting early amid fears of further violence. The damage to both domestic and business properties is likely to be picked up by police authorities, and in particular the Metropolitan Police Authority, under the provisions of the Riots (Damages) Act 1886, which specifies that where damage is caused by people “riotously and tumultuously assembled”, local police authorities are required to compensate victims. The Met has suggested in a statement to the Guardian that it would meet the cost from its reserves, which are funded by the taxpayer. “No specific fund is maintained by the Metropolitan Police Authority to cover claims against such contingencies but we maintain general reserves to cover unexpected events. Such risks cannot be insured against,” a Met spokesman said. The bill could run to more than £100m, according to provisional estimates of the insurance claims resulting from the unrest. The MPA’s reserves stood at £70.6m at the end of March, the 2010/11 accounts for the authority show. Nick Starling, director of general insurance and health at the Association of British Insurers, said: “It is too early for us to have an accurate picture of total costs, especially business interruption costs, but insurers are expecting significant losses, of well over £100m.” The liability for riot damages is a contentious issue. The Association of Police Authorities (APA) and the home affairs select committee have both called for it to be reviewed. Bedfordshire police was sued for £42m over the riot at the Yarl’s Wood immigration detention centre in 2002, but was insured against the cost. Rob Garnham, chairman of the APA, said: “The potential implications of the Riot Damages act have been of considerable concern for police authorities for a number of years. It is crucial that riot damage is quickly repaired and communities restored but in a context of cuts the public will see little sense in a shrinking police fund being diverted to pay for criminal damage.” Businesses and individuals were being urged on Tuesday to get claims in as soon as possible. Insurers require claims to be submitted within seven days, since they in turn have to claim on police budgets within two weeks. Stuart White, a partner at Reynolds Porter Chamberlain, said: “The good news for some of the smaller retail units that have been damaged is that even if they do not have a property insurance policy they may be able to recover the value of any damage sustained because of the rioting directly from the police. “However the compensation under the act will not normally extend to the financial losses of the business while it is unable to trade. Trading losses are likely to be recoverable only by businesses with business interruption insurance.” The ABI has urged the government to extend the period to allow affected businesses more time to prepare claims. The body met with the home secretary on Tuesday, suggesting an extension of the claims period from the usual 14 days to the maximum 42. Caroline Woolley, from insurance broker Marsh, said that the losses could be much larger than figures being put out by insurers. “Any figures quoted will be in relation to insured losses, [and not include uninsured losses].” Across the UK on Tuesday shops closed early and were boarded up or emptied for the night. Carphone Warehouse in Clapham High Street posted a sign saying “All stock and money removed”, and the company’s Birmingham store was emptied of stock. Shops closed early in Wolverhampton, Coventry and many London neighbourhoods including Lewisham, Tooting, Camden, Hackney and Croydon. In London Whiteleys shopping centre closed at 3pm. In Birmingham shops such as Tesco and some banks in the jewellery quarter decided to close from mid-afternoon. Carphone Warehouse saw 20 of its stores around the country damaged or looted. Everything Everywhere, which runs the Orange and T-Mobile brands, saw 25 shops hit. The company is boarding up stores and calling in extra security personnel in certain areas. Rioters smashed up just under 20 Vodafone and O2 shops. Among the supermarkets, 16 Sainsbury’s stores were attacked, and three remain closed. Morrisons reported four attacks. Tesco said a number of stores around the country were attacked and a handful had yet to reopen. Peter Marks, group chief executive at The Co-operative Group, the country’s fifth largest food retailer, said: “There is no justification for this wanton and senseless violence, which has endangered people’s lives and destroyed property. The safety of our staff and customers is paramount, and over 100 Co-operative branches, primarily food outlets in the London area, were temporarily closed last night (Monday) on police advice. Two members of staff were attacked during looting at one of our petrol forecourts in Streatham and staff in other locations narrowly escaped mob violence, which is completely intolerable. “Although the vast majority of our stores have now re-opened, around a dozen remain closed due to damage incurred, including the three most seriously damaged food stores – London Road (Croydon), Hilton House (Brockley) and New Addington, which was completely destroyed by fire.” We are liaising with the police and local authorities in each of the affected areas and, as the UK’s largest community retailer, we are ready to play our part in helping affected communities to recover from these unprecedented attacks, and would urge the prime minister and the government to take firm and decisive action to quickly bring this appalling situation under control.” A Sainsbury’s spokesperson said: “A number of our stores were closed earlier than usual yesterday as a precaution, in some cases on the advice of police. Sixteen of our stores experienced serious incidents during the disturbances last night. All of these stores have now reopened, except three of our convenience stores, which remain closed and will reopen as soon as possible. All our other stores are open for business as usual. As far as we are aware, no customers or store colleagues have been injured, and their safety remains our priority. “We are assessing the situation on an hour by hour basis as the safety of our customers and store colleagues is paramount. We will continue to take advice from police and other authorities throughout the day.” A spokesman for Debenhams said the Romford store had suffered smashed windows but was open for business as usual. The Clapham store remains closed. “We don’t know when it will reopen yet, the whole area is cordoned off by police. We don’t know how much was taken. Thankfully no one was hurt. We are taking guidance with the police in all the areas we operate stores, and the safety of our staff is our main priority.” An Everything Everywhere spokesperson said: “We can confirm that 25 of our stores were affected, causing varying levels of property damage and some loss of stock. Most importantly, none of our team members have been hurt. We are putting additional security and safeguard measures into place in case there is further escalation of similar activities, with our top priority being the protection of our staff.” Security firms meanwhile reported increased inquiries from worried businesses. A G4S spokesman said: “The current disturbances in London and other cities have resulted in an understandable increase in requests for increased security from our business customers and some disruption to our cash transportation services. “We have been responding to requests for additional security personnel, as well as for security advice. We have also been contacting our customers to provide advice and, where needed, are helping them to develop contingency plans to deal with any incidents. UK riots Police Metropolitan police Insurance industry Retail industry Crime Carphone Warehouse Orange T-Mobile J Sainsbury Morrisons Vodafone London Co-operative Group Alex Hawkes Juliette Garside Julia Kollewe guardian.co.uk

Posted by on August 9, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.