Flooding: Insurance

Lord Knight of Weymouth Excerpts

Thursday 29th November 2012 Lords Chamber

[Lord De Mauley]

My Lords, this is a serious matter. We have been working very hard with the industry on this extremely complex issue. We need a lasting solution that ensures affordable insurance bills for those at flood risk but does not place unsustainable costs on wider policyholders and the taxpayer. The ball is now in the industry’s court. The ABI understands the Government’s position. It is up to the ABI to come back to us with a practical and sustainable option that provides insurance for those that need it without increasing bills for all or placing unacceptable burdens on the taxpayer.

[Lord Knight of Weymouth]

My Lords, first, I offer sympathy to those who have lost loved ones and suffered the trauma of flooding in the past week. This is the third time since July that this matter has been raised at Question Time. The Minister consistently tells us that the Government are in intense and constructive negotiations with the insurance industry. Today, he tells us that it is a priority. Yet today I received an e-mail from the Association of British Insurers saying that negotiations are currently at an impasse. The Minister now says that it is up to the Association of British Insurers to come up with a better deal and yet he has been asked a perfectly good question by the noble Lord, Lord Greaves, on whether he agrees with the proposal that it has put forward. When will Defra sort this out and give comfort to the 200,000 people who are really struggling to get flood insurance?

[Lord De Mauley]

My Lords, I absolutely agree with the noble Lord on his first point. We really feel strongly for those affected by this. The emergency services, local authorities and the Environment Agency have been working extremely hard for them and I pay tribute to that. In answer to the noble Lord’s question, the statement of principles that his party put in place takes no account of the affordability of insurance, so I will not take any criticism from the other side.