PARLIAMENTARY DEBATES - United Kingdom Parliament

1525 Flood Insurance
26 MARCH 2013
Flood Insurance
1526
three, interdependent levers to mitigate flood risk and
limit the stress that it brings. Those are flood insurance,
flood defences and individual property and community
resilience.
Whether people are rampant climate sceptics or paid-up
members of the Green party, most studies show clearly
that changing weather patterns mean that flooding is on
the increase, while population increases and poor planning
have exacerbated the problem dramatically. We will to
have to get better at using those levers to mitigate that
risk. In particular, overloaded infrastructure, such as
drainage capacity, is leaving increasing numbers of
constituents at the mercy of not only notoriously hard-torespond-to
surface water, but revolting episodes of effluent
flooding. I am aghast that in this day and age I have
constituents who have to cope with sewage coming into
their homes simply because it is raining. We are supposed
to be living in a highly developed country. The worst
thing is that the insurance situation means that they feel
gagged because they do not want to put their local
property market at risk.
Mr Nick Gibb (Bognor Regis and Littlehampton)
(Con): My hon. Friend’s description of seeing homes in
her constituency flooded reminds me of the problems I
saw in Bognor Regis and Littlehampton on 10 and 11 in
June, when more than 300 homes were flooded. Does
she share my view that in addition to the flood insurance
issue, we need to spend sufficient capital to ensure that
the surface drainage system is sufficient to mitigate such
problems when heavy rainfall occurs?
Nicola Blackwood: I agree that infrastructure is vital.
I believe deeply that many of the problems we face
today stem from an inherited legacy of bad planning.
Mr Andrew Smith rose—
Nicola Blackwood: My right hon. Friend—ish—the
right hon. Member for Oxford East (Mr Smith) knows
how difficult it can be to get accountability and solutions
for constituents when responsibility falls between the
Environment Agency, local authorities and Thames
Water, and he might want to comment on that point.
Mr Smith: I am grateful to my hon. Friend-ish for
giving way. [Laughter.] Flood waters are no respecters
of constituency boundaries and we work closely on
these issues. On planning, does the hon. Lady agree
that, given that successive Governments and councils
of all complexions have allowed so much development
on the flood plain, it is perfectly proper for the state to
pick up some of the responsibility by participating in
insurance schemes, such as “Flood Re”, which are the
only way to protect our constituents from unaffordable
premiums?
Nicola Blackwood: Clearly, it is vital that flood insurance
continues to be widely available and affordable, a point
I will come to in a moment. Although there is frustration
about the responsibility of different agencies working
together to respond to constituents, the emergency response
to flood events locally since 2007 has improved dramatically,
and there have been positive developments on flood
defences in Kidlington and Oxford.
However, none of that addresses the long-term strategic
challenges we face, and insurance has to be at the top of
that list. That is why, with all the other urgent flooding
priorities that we have heard about, we have to focus on
the 30 June deadline. That date dominates the lives of
far too many of my constituents. They fear that they
will suddenly become uninsurable, breach their mortgage
conditions and have unsellable properties. While I appreciate
that negotiations with the Association of British Insurers
have been complex and that there is no easy solution,
especially with the current fiscal situation, it is not as if
we did not see this coming—it has been coming since
the statement of principles was agreed in 2002.
If we are not going to hit the deadline, we need to be
clear and transparent with constituents about what will
happen between then and any future deal. Until now,
the line has been to not undermine negotiations by
giving a running commentary on them. That is not
unreasonable and had an agreement been reached in
time, I think that all would have been forgiven, but
people need to know now how to protect themselves.
Ministers have been clear about their priorities, which
are to ensure that flood insurance remains widely available,
affordable and fiscally sustainable. Nobody is going to
argue with any of those principles, but they will not
help householders to work out how to plan for their
financial future.
I therefore ask the Minister the following questions.
On the stroke of midnight on 30 June, will we have a
free market or will we have some kind of interim
extension of the statement of principles? If it is the
latter, have there been any discussions about what form
it will take? If the Government are going to let the free
market emerge in the interim, will Ministers let it be
genuinely uncontrolled, with all the pricing risks that
holds, or are they considering regulation? If so, what
kind of regulation, and how and when? On “Flood Re”,
the current cross-subsidy is £8. Yesterday the ABI told
me that the proposed levy would also come to £8, but it
would have to be formalised as a tax. However, the
National Flood Forum brief estimates the levy at £13.
What assessment have the Government made of the
levy and what mechanism would they need to regulate
it? Finally, what measures are being considered to incentivise
flood defence investment on a personal, local and national
level? That is the only responsible way to manage flood
risk on an ongoing basis.
I accept that it takes two to tango. I met the ABI
yesterday and I made those points, but I am afraid that
today it is the Minister’s turn. My constituents deserve
to know whether their homes will be insured in July and
on what terms. They deserve at least that measure of
certainty, even though they live in a flood-risk zone.
3.35 pm
Diana Johnson (Kingston upon Hull North) (Lab): In
2007 my constituency in Hull was badly flooded. Ninety-five
per cent of the city is below sea level, so we have always
been prone to flooding, but in 2007 we had surface
water flooding, a phenomenon that is now becoming
more widespread around the country.
Since 2007, I have on several occasions raised in the
House the question of what will happen with flood
insurance come the end of June. Last summer, when I
asked the then Secretary of State for Environment,