UK gags Bolkestein over Lloyd’s names probe

By Peter Chapman

Date: 13/11/03

JOHN Grant, the UK's top diplomat in Brussels, has warned Frits Bolkestein, the internal market commissioner, not to reveal confidential information to MEPs about the Commission's probe into the Lloyd's of London insurance market.

The bid to gag the Dutchman and his staff means Bolkestein is unlikely to meet a 15 November deadline set by MEPs for access to key documents obtained by the Commission during its two-year long investigation, which ended last month.

Bolkestein has insisted that he is unable, for legal reasons, to meet their demand for a statement outlining any shortcomings in the way the UK supervised Lloyd's before it updated controls on the market in 2001.

European Voice has seen a letter sent by Grant, the UK's permanent representative to the EU, to Alex Schaub, director-general of DG MARKT, advising him that releasing details of the probe would breach an EU regulation on relations between the European Parliament and Commission, as well as rules on public access to documents.

He also claimed that disclosure could prejudice ongoing legal action in the UK, although critics say this is a smokescreen because the plaintiffs, former Lloyd's investors, have exhausted their rights to pursue a case in their own country.

"In order to resolve alleged infringements, it is essential that member states are able to correspond with the Commission in a relationship of trust and confidence," Grant states in the letter.

If details about the investigation and correspondence between the parties are released, Grant claims "there is a real danger that the relationship of trust and confidence between the Commission and member states would break down".

However, failure to give MEPs answers could land the Commission in hot water with deputies, who believe that for more than 20 years the EU executive may have neglected its duty to ensure that the UK applied a European insurance law designed to protect investors and customers.

British Tory Roy Perry told European Voice that MEPs that if deputies are left in the dark they may decide to call for a special committee of inquiry or "short circuit that and take the Commission to the European Court of Justice".

Perry's supporters suspect Bolkestein's decision to drop the inquiry last month effectively means a blind eye has been turned to years of breaches of EU insurance law.

Scores of Lloyd's investors allege that they would not have faced financial ruin from "unforeseen" asbestos claims if the market had been properly audited.

Bolkestein said last month he was content that the UK's new regime for Lloyd's was fully in line with EU rules, although he refused to say whether he thought the old system fell short.

Bolkestein said it was not the Commission's job to issue rulings on past failings - and officials claimed the EU executive could be sued by the UK if it did.