Water Bill

Debate between Lord Krebs and Lord De Mauley

Tuesday 11th February 2014 Lords Chamber

[Lord De Mauley]

My Lords, I concur with the noble Lord, Lord Krebs, in Amendment 156C that it is important that householders whose policies are ceded to Flood Re are aware both of the flood risk in their vicinity and of the transitional nature of the scheme. Knowing about flood risk is vital so that households can take simple steps, such as signing up to free flood warnings, as well as investigating longer-term options for managing their flood risk, and can understand the likely impact on their future premiums of the withdrawal of the subsidy from which they are benefiting.

We will work with insurers and Flood Re to support people at flood risk to plan for and adjust to risk-based pricing. I hope that noble Lords will be reassured to know that we have agreed with the ABI that insurers will be required to provide information to customers about their flood risk, Flood Re and the actions that they can take to manage this, both when a property is ceded to Flood Re and at the point of a claim. Of course, raising awareness of flood risk remains primarily a matter for risk management authorities, such as the Environment Agency, so it will be important to ensure that any action by insurers on behalf of Flood Re complements their work.

Turning to Amendment 156D, I understand that by changing the phrasing of the power in Clause 54(3) from “may” to “shall”, the notion that Flood Re is a transitional measure is strengthened. I point to the Government’s stated policy objective in the June 2013 public consultation that,

“there should be a gradual transition towards more risk-reflective prices”,

and to the existing provisions in subsection (2) of the clause, which may require the administrator to have regard to the transitional nature of the scheme in discharging its functions. We have been clear that there should be a gradual transition to more risk-reflective prices and that we are committed to ensuring that the scheme retains incentives for flood risk to be managed. The Government will not designate the scheme until we are satisfied with the industry’s proposals. As I have already said today, the regulations designating the scheme will be subject to public consultation and we are currently considering the recommendation of the Delegated Powers Committee that regulations made under this clause should be subject to the affirmative procedure. While I recognise that the shift from a permissive power to a firm expectation could be claimed to underscore Flood Re’s duties in this regard, I believe that there is sufficient clarity in Flood Re’s role to manage the transition to risk-reflective pricing and for that to be achieved through the current drafting of the Bill.

Turning to Amendment 156E, from my noble friend Lady Parminter, I can confirm that it is, as she said, our firm intention that the policy will be reviewed every five years by the Government. This review will assess the level at which the levy and the eligibility thresholds are set to ensure that the policy objectives of Flood Re continue to be delivered, including the transition to risk-reflective pricing. The plan will be a public document and Parliament will be able to use existing powers to call Flood Re’s staff to answer any questions. On the point made by the noble Lord, Lord Whitty, in the case that Flood Re’s finances are out of kilter or the scheme is not operating effectively, that review will be brought forward. We are working with the ABI to define this process. The amount of the levy and the thresholds will be set out in secondary legislation. We intend those instruments to have a review period, always accepting that they might be reviewed early if circumstances require it. In addition, as I have just said, we are taking a power to make Flood Re’s responsible officer directly accountable to Parliament for the scheme’s value for money and for propriety and regularity. There are powers to require Flood Re’s audited accounts to be laid before Parliament and provided to the Comptroller and Auditor-General to examine and compare against Flood Re’s published transition plan.

I now turn to Amendment 156F, which would require the Flood Re scheme administrator to set out how it intends to manage the transition to risk-reflective pricing by investing in flood risk mitigation measures. Actions taken by households, communities, businesses and Government to reduce flood risk are the best and most cost-effective way to secure affordable insurance for households at risk of flooding in the long term, and I recognise the noble Lord’s intention to see this reflected in the Bill. As I said earlier, Flood Re will have a duty to have regard to the need both to act in the public interest and to ensure economy, efficiency and effectiveness in the discharge of its functions. It may well be that the Flood Re administrator decides in due course that investments of the sort that the noble Lord would like to see present an appropriate means of complying with these requirements where there is a clear case for doing so. Nothing in the Bill precludes this. However, we think that it is important for Flood Re to retain flexibility in the way that it discharges its public-interest duty and plans for transition, in order to ensure that it is in a position to balance these requirements against its core obligations as a reinsurer. Accordingly, we do not think that it would be appropriate to mandate Flood Re to subsidise flood risk mitigation measures.

Finally, Amendment 156G would limit the maximum proportion of the cost of a claim that an insurer could reclaim from the Flood Re scheme to a specific amount, as part of the Flood Re scheme’s management of transition to risk-reflective pricing. I understand that the intention is that this would restore an element of risk-reflective pricing to insurance policies in Flood Re. This could create a financial incentive for households and insurers to put in place the necessary measures to manage their flood risk. However, price is one, but not the only, signal to households for achieving that and our proposals for ensuring that households have the necessary information to make informed choices about managing their risk should also act to drive resilient behaviours. While superficially attractive, sharing an element of the risk between Flood Re and households would also have the effect of creating a more complex system to administer, thereby adding to the overall costs of the scheme. Having listened to what I have said, I hope that the noble Lord will be prepared to withdraw his amendment.

[Lord Krebs]

My Lords, I thank the Minister for those comments in response. Above all, my amendments are about trying to put risk communication and management at the heart of Flood Re; we have heard that in relation to previous amendments earlier this afternoon. I am pleased to hear from the Minister that this is indeed the Government’s intention. I look forward with great interest to seeing how that develops through to the next stage of the Bill.

I also thank other noble Lords who have taken part in discussion of these amendments. On the frank feedback of the noble Lord, Lord Whitty, on my lecturing skills, in Oxford we normally do that anonymously. This was non-anonymous feedback on my lecturing skills in explaining risk sharing; I will take that away and consider it for the future. In the mean time, however, I beg leave to withdraw the amendment.

Peatlands

Debate between Lord Krebs and Lord De Mauley

Wednesday 8th January 2014 Lords Chamber

[Lord Krebs (CB)]

My Lords, I would like to ask the Minister about the impacts of climate change on upland peat. As he will know, the report of the Adaptation Sub-Committee of the Committee on Climate Change, which I happen to chair, reported this year that only 4% of upland deep peat in England is in active, peat-forming good condition. Furthermore, only one-third of upland deep peat has a management plan in place. Will he inform the House what he intends to do about the other two-thirds of upland peat that has no management plan in place to improve its quality?

[Lord De Mauley]

Yes, my Lords—and I should take this opportunity to thank the noble Lord for the work he does with the Adaptation Sub-Committee; it is extremely important to us. The peatland code, which was launched in September, provides a basis for business sponsorship of peatland restoration; that is a key plank in what we are doing. We are also undertaking a considerable amount of important and relevant research. Environmental stewardship, which I referred to in my initial Answer, has for many years benefited peatlands, but the new ELMS will be more focused on environmental outcomes and therefore will be more directly beneficial to peatland restoration. The three nature improvement areas that have peatlands are working hard on improving their habitats.

Badgers

Debate between Lord Krebs and Lord De Mauley

Tuesday 11th December 2012 Lords Chamber

[Lord De Mauley]

My Lords, the noble Lord and I will disagree on the science. Ultimately, of course, we want to be able to use vaccination both for cattle and for badgers, and we are investing in this option through extensive research and development. However, there are practical difficulties with the injectable badger vaccine, which the noble Lord refers to as being used in Wales and which right now is the only available option. The difficulties involved include the need for each badger to be trapped and the fact that vaccination does not appear to cure already infected badgers, along with the cost and the fact that it has to be repeated every year.

[Lord Krebs]

My Lords, I have spoken in your Lordships’ House before about the scientific evidence for the efficacy of culling as a way to control TB in badgers, and I do not wish to repeat myself. However, I should like to ask the Minister two questions. First, how will the success or failure of these two pilots be judged? The independent panel will make the judgment, but what will success look like? Secondly, is it not right that the Government should take the opportunity between now and next summer, when the cull is proposed to resume, to review all the options for controlling TB in badgers, bearing in mind that not even the most optimistic proponent of culling would consider it a credible strategy for the eradication of this dreadful disease?

[Lord De Mauley]

My Lords, as always, I respect the noble Lord’s position. An independent panel of experts will oversee the monitoring and evaluation of the two pilots for the badger control policy to test our assumptions, as I said, about the effectiveness, humaneness and safety of controlled shooting. The expert panel will play an important role in overseeing the design of the data collection and their analysis, and in providing additional advice on interpretation of the data. It will be on the basis of both the pilots and the panel’s report that Ministers will take a decision on whether the granting of culling licences should be authorised in areas besides the pilot areas, and whether the badger control policy should continue to include controlled shooting as a culling method. On the noble Lord’s second point, we are constantly reviewing the options. As I said earlier, we are working hard on a vaccination, and there are a number of other measures in progress. In a general sense, we are doing as the noble Lord suggests.