PARLIAMENTARY DEBATES - United Kingdom Parliament

1541 Flood Insurance
26 MARCH 2013
Flood Insurance
1542
clear that the Opposition will take a responsible approach
and support any deal to ensure affordable and available
insurance. The Government had the resources of the
Department for Environment, Food and Rural Affairs,
the Cabinet Office, and even of No. 10 Downing street,
yet with 96 days to go there is still no deal.
The consequences of that are stark. Nick Starling
from the Association of British Insurers warned that
the only alternative to a deal with the Government
“is a free market, meaning up to 200,000 people will find insurance
unavailable or unaffordable.”.
Ian Crowder of AA Insurance has stated:
“We are concerned insurance premiums will spiral out of
control if no agreement is reached between the ABI and the
Government.”,
and Paul Broadhead of the Building Societies Association
warned chillingly:
“Failure to reach agreement could also have an effect on
mortgage lending in high risk areas”.
The National Flood Forum stated:
“Government needs to accept its responsibilities of protecting
its citizens by making a decision. Failure to make a proposal will
put thousands of people at risk”.
In short, if the Government fail to get a deal, nearly
200,000 households could find themselves without
insurance, unable to sell, and with their properties revalued
sharply downwards. That could place them in negative
equity and create tranches of property blight across the
constituencies we represent. In other words, the stakes
could not be higher.
Given those consequences, it is even more worrying
that the Government seem unable to admit that they
are struggling. In a letter to me of 19 April 2012, the
Minister stated:
“I cannot comment on the timing of any future announcements
on this issue but have committed to providing a further update
this spring”
For the sake of clarity, that was spring 2012. No response.
In response to my written question of 18 June 2012, the
Minister said that the Government were
“at an advanced stage in intensive negotiations with the industry
on alternative arrangements for when the Statement of Principles
expires.”—[Official Report, 18 June 2012; Vol. 546, c. 738W.]
In her written ministerial statement of 11 July 2012,
the former Secretary of State, the right hon. Member
for Meriden (Mrs Spelman), said:
“Intensive discussions with the insurance industry are continuing
and we will announce further details in due course.”—[Official
Report, 11 July 2012; Vol. 548, c. 30WS.]
Last November, Lord De Mauley said in the other
place:
“We are in intense but constructive negotiations with the
industry and further announcements will be made in due course”.—
[Official Report, House of Lords, 1 November 2012; Vol. 740,
c. 644.]
When asked a question by my hon. Friend the Member
for Nottingham South (Lilian Greenwood) in January,
the Minister said:
“We want to protect those on low incomes in flood-risk areas,
and we think we have a method of doing that. We are at an
advanced stage in negotiations; I will come to the House shortly, I
hope, with details.”—[Official Report, 24 January 2013; Vol. 557,
c. 445.]
Come the next set of DEFRA questions in March, the
Minister responded to another question asked by my
hon. Friend by saying:
“Constructive negotiations continue with the insurance industry,
at the highest levels of Government, on a range of approaches
that could succeed the current statement of principles.”—[Official
Report, 7 March 2013; Vol. 1109, c. 559.]
This situation would be comical if it were not so
serious. This is the mañana Department of a mañana
Government—always tomorrow and no help for today.
Even if an agreement could be reached, it would
require primary legislation. The Minister should admit
what we now know to be true—that this will not be in
place for 30 June. The 570,000 properties to which this
motion applies and the 570,000 families that could find
their homes uninsurable, unmortgageable and unsellable
are calling for certainty, but there is none.
What is the plan? To deny the risk and the social
responsibility that any Government bear would deny
one of the most basic laws of political gravity, which is
that catastrophic risk resides with us all. When catastrophic
floods devastate streets, towns and communities, we rightly
expect the Government to be there to help us pick up
the pieces. That is what is so short-sighted about the
Government’s response to getting a deal done on flood
insurance.
As the Minister has previously made clear, there is
only one deal on the table. The alternative is a free
market that will allow insurers to leave the market for
high-risk properties and that will unwind a long-standing
settlement that flood insurance should be available as
part of every policy.
Climate change is making flooding more prevalent
and less predictable, and the UK climate change risk
assessment cites it as the No. 1 threat that we need to
adapt to. I have made it clear that the Opposition seek
to be helpful and constructive in securing a deal that
protects home owners, businesses and communities
vulnerable to the risk of flooding. Despite our constructive
approach, Ministers have refused to brief this House or
involve the Opposition in the discussions. As each week
passes, it is becoming harder to defend a situation in
which Ministers appear to be drifting without giving
any indication of when a deal will be concluded.
This Government must get a grip. They have 96 days
and the clock is ticking.
4.32 pm
TheParliamentaryUnder-Secretaryof StateforEnvironment,
Food and Rural Affairs (Richard Benyon): I echo the
plaudits given by Members on both sides of the House
to my hon. Friend the Member for Esher and Walton
(Mr Raab) for securing this debate and to the Backbench
Business Committee for agreeing to it.
I say from the start that, yes, the Government are in
arduous and urgent negotiations with the insurance
industry. We recognise that the Government’s first and
primary role is to tackle risk by building flood defences.
We are doing that, and I will talk about it later. We must
get a good deal for the taxpayer and policyholders and,
frankly, a better deal than the statement of principles.
Therefore, insurance must be available and affordable,
without adding to bills. We are not yet in a position to