Riot Compensation Bill
Debate between Anne Marie Morris and David Lammy(8 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Anne Marie Morris (Newton Abbot) (Con)
I rise to give my support to amendments 1, 2 and 3 in the name of my hon. Friend the Member for Dudley South (Mike Wood). I congratulate him on his hard work in getting the Bill to this stage. He deserves a great deal of credit.
Amendment 1 seeks to insert substantial time limits in the Bill and introduce a two-tier system for making a claim. That will allow those affected by the riots to register a claim within 42 days of the riots starting and then submit evidence within a further 90 days after that. As my hon. Friend says, that gives those affected 132 days from the start of the riots to make their claim and submit evidence. It is crucial that those affected have adequate time to make their claim, especially considering the likelihood that paperwork and/or laptops will have been destroyed in the riots.
Riots are not only physically destructive but emotionally draining. With that in mind, it is important to consider the priorities of those forced from their homes and stripped of their possessions. The immediate reaction is probably not to call the insurance company but to consider urgently where they and their families are going to sleep that night and to ensure that everyone in the family is safe and well. Time will also be needed to process what has happened. I have no doubt we have all been in a position where something so distressing has happened that we fail to take in all the details straightaway.
The days available to make a claim also give the police force in an area struck by riots the ability not only to get the community back into some sort of order but to get their own house in order. There may well be internal processes to decide the best way to proceed or establish the date the riot started. I am sure that many cities, since the 2011 riots, will have put in place better protocols. We hope they will not have to use them, but every police force would need time to get everything in order before considering compensation claims. It has taken us 130 years to modernise the law on riot damages and compensation. I am happy we are doing it and that it is being considered in a measured way on both sides of the House. I therefore support amendment 1.
Amendment 2 is another very good amendment. I am thankful that my constituency was fortunate enough not to experience the riots that gripped many areas of the country in 2011. Despite threats on social media of rioting in Exeter, Plymouth and Truro, Bristol was the only area in the south-west unfortunate enough to be confronted with violent disorder. During the riots in London, more than 100 people were forced from their homes, driven from their livelihoods and forced to make alternative arrangements while their homes were under repair. While unfamiliar with riots, the west country is sadly very familiar with flooding. Floods in my constituency in 2012 caused damage to more than 180 homes, with many forced to seek alternative arrangements, so I know how important the provision of alternative accommodation is when exceptional circumstances occur.
A person’s home is at the centre of their life. People’s day-to-day lives revolve around it. The home is a place of stability, and when that is taken away, it is the most traumatic experience, particularly given the circumstances of a riot. Many who were caught up in the riots across the country experienced activity totally unknown to them. Vandalism, arson, violence and theft are not day-to-day happenings, so we need to make the healing process as smooth as possible, which includes support with alternative accommodation, should we face a similar situation again.
Without the amendment, victims of riotous offenders would be left to pick up the bill for the alternative accommodation required through no fault of their own. I have no doubt that some people who took out insurance will have been told, after their home was destroyed and deemed uninhabitable, that the insurance would not cover the additional costs incurred while essential repairs were carried out on the home. The British Insurance Brokers Association said in 2011 in an article in the Financial Times that
“some insurance policies will also cover people for alternative accommodation costs if they cannot stay in their home”.
I emphasise the word “some”. It means that some were not covered, and although I am not sure on which side the majority falls, if it affects anyone, it is too many.
The amendment is purely a reflection of the clauses normally included in commercial insurance policies that pay out compensation for financial loss caused by disruption. In the instance we refer to, we are compensating the loss of a home due to disruption. Not having a home can inconvenience essential tasks, such as going to work to continue earning or taking children to school. Although neither the amendment nor the Bill replaces insurance, they do provide a safety net for the unexpected circumstances we are all exposed to at some point in life. In the instance of rioting, it is imperative we legislate to compensate people sufficiently, and that is why the amendment is particularly important.
Amendment 3 gives the Secretary of State the power to make regulations setting out the
“considerations that decision-makers must take into account in deciding the amount of compensation payable”.
It is right that she have the power to take these situations into account when making regulations regarding the amount payable to those who need it after riotous behaviour. The ability to curtail the amount one can claim is welcome. Although we must help those who genuinely need support to get back on their feet, we must not allow the taxpayer to pay for the support longer than is necessary.
The extra cost incurred from having to stay in hotels or other rented accommodation would put pressure on most people, but those who have also lost a business are in even greater need of support and assistance. Business owners are the backbone of the British economy, and it is only right that we support them, after they have contributed to our growing economy, by helping them back on their feet and back into their own homes. Of course, the Secretary of State does not have to use the powers—with any luck, she will not have to—but her having them at her disposal will I hope be a comfort to those affected previously by reassuring them that the House has heard their cries for help and support and is taking them seriously. On that note, I add my support to amendments 1, 2 and 3.
Mr Lammy
The amendments address the issue of the £1 million compensation cap. It is important for the House and for individuals beyond it who, unfortunately, may find themselves caught up in a riot that we interrogate how the Government reached that figure. In Committee, I raised the issue of the cost of running a business and the fact that it varies across the country. The price of running a newsagent, off-licence or small gift shop in Yeovil is different from the cost in Northumbria and different again from the cost in Tottenham, yet this £1 million figure exists for all those businesses.
I was grateful that the Minister for Policing, Crime and Criminal Justice, who led for the Government in Committee, wrote to my right hon. Friend the Member for Knowsley (Mr Howarth), who also served on the Committee, in response to some of the points I had made and that he shared that with members of the Committee. The letter stated:
“In finding a solution it was important for the Government to come up with a balanced approach that protected the public purse from unlimited liability whilst also ensuring that significant numbers of businesses would not be inhibited from making claims. A further key issue was to minimise the bureaucracy around the administration process.
A number of respondents to the consultation suggested an alternative, and more simple administrative approach, of a cap on the amount of money…We examined data provided by forces and found that 99% of claims from businesses and insurance companies made after the 2011 riots were under £1m.”
It is important to stress that we do not know when there will be another riot. We hope there will not be one, but we are here this morning because we suspect there will be, given the history of our country and the fact that from time to time these things happen. It is important to emphasise that the fantastic nature of our policing model, with policing by consent and our police not routinely carrying guns, means that the public stand alongside them. When that consent is withdrawn and a riot happens, it is not the fault of the business or the homeowner, who have paid their taxes and expect to be protected. Therefore, setting a £1 million cap is an important moment, particularly given the nature of our economy at the moment and the cost of a property in a city such as London. The average price here is now running at half a million, so the average shop front on a high street in Tottenham is about the same and the £1 million cap is an important figure to understand fully.
Anne Marie Morris
Clearly the right hon. Gentleman makes an important point about ensuring that people are properly compensated, but does his amendment not give him a concern that it would provide people with a disincentive to be responsible and take out insurance? How does he suggest we get a better balance between the obligation of the taxpayer and that of the individual?
Mr Lammy
The hon. Lady makes an important point and there is a balance to be struck, but I hope she will understand that it is important to interrogate why we have arrived at the £1 million figure. It is also important that we recognise something about parts of the country that experience these upheavals from time to time. It remains the case in a constituency such as mine, which has had two riots in a generation, that when someone walks down Tottenham High Road they do not see the sort of scene they would see in Detroit, with boarded-up shops, houses in which people do not live and no-go areas—areas that have failed. Fortunately, in these fantastic islands of ours there are no communities that have failed—we do not allow them to fail. We do not want to see that kind of failure. We need to get the balance right between having people, rightly, insuring themselves, and recognising that in the poorest parts of our country people are often under-insured or not insured, so when there is a riot we must still try to put them back into a situation where they can get on with their lives and with their business, and get on with the economy.
The 2011 riots were unusual, in that, surprisingly, there were riots in Clapham Junction and in Ealing. There were riots in parts of the country where one might not have expected riots. However, riots occur most often in the most deprived communities and we do not want the economies of those communities to disappear completely. Insurance premiums can also be so high in communities such as the one I represent, and such as those represented by my hon. Friends the Members for Croydon North (Mr Reed) and for West Ham (Lyn Brown), that they are a disincentive to insuring or they encourage under-insuring in the first place.
Amendment 4 seeks to get further explanation about the £1 million cap. Amendment 5 would take the figure up to £10 million, and it is a probing amendment to understand how the £1 million figure has been reached. Amendment 7 is the most important amendment I have tabled and it asks for greater transparency. I have asked for the methodology being used to be put before this House, for Parliament to be able to understand that methodology every three years or so and for this House to be a bigger determinant in reaching the figure for the compensation level.
Mr Lammy
Forgive me. The hon. Gentleman was not on the Committee, but if he reads the Hansard report of its proceedings he will see that there was quite a lot of debate about this figure. The Government were unable to give much detail of how they arrived at the figure. The Minister has since written to my right hon. Friend the Member for Knowsley, who chaired the Committee—its members were copied in—and given greater clarity on what the Government were told by the insurance industry and on the amount of figures that came under £1 million. I received that letter after tabling these amendments. However, the amendments are probing, because it would be quite wrong for a Bill of this kind to pass quietly through the House without discussion and scrutiny. I see the hon. Member for Croydon Central (Gavin Barwell) nodding in agreement, because his constituency was caught up in the riots. My amendments have been tabled in that spirit.
The hon. Member for Bury North (Mr Nuttall) is right: there is of course a difference between removing the £1 million cap and raising it to £10 million. I suspect that not all of my amendments will be pressed to a vote. However, I emphasise amendment 7, in particular, because it facilitates scrutiny and the need to return to this figure in future, which must be right. I do not want the House to settle on £1 million and then find in 10 or 15 years that it would leave a lot of people, particularly in London and the south-east, really short if their property were damaged in a riot.
Anne Marie Morris
The right hon. Gentleman talks about the challenge of striking a balance between the Home Office and other potential sources for the unpaid sum, but I do not think he has offered sufficient clarity on the role of insurance. He has talked about the challenge of insurance being extraordinarily expensive. In my constituency we have a similar issue with flooding. Flood Re and the negotiations that the Government have had in that regard have clearly been very helpful. What conversations has he had with the insurance industry, and indeed with the Government, on what can be done to make insurance more affordable?
Mr Lammy
There are parts of this country that routinely experience flooding, as I said in Committee, and there is considerable experience in the system in relation to how we deal with those communities and how the insurance industry reacts in those circumstances. Floods happen more frequently in our country than riots, but a similar catastrophe befalls those who find themselves caught up. I hope that the bureau that will be set up as a result of this Bill can draw on the experience in those areas.
I have heard hon. Members in those areas raise concerns about loss adjustors and the manner in which they treat our constituents. In circumstances in which everything has been lost in the flood or burnt to the ground in a fire, the individual concerned is expected to go and find a receipt for a stove or oven that they now have to claim for. How are they going to find that receipt? Where is it? It is a miserable situation, and I am afraid that during the riots we found the performance of loss adjustors very patchy, and some of them behaved quite inappropriately to my constituents.
However, as I have indicated before, we have a situation of insurance, underinsurance and no insurance at all. That is why we have the Riot (Damages) Act 1886 and why we should inquire as to what the appropriate levels of this newly introduced cap should be. For all those reason, this clutch of amendments address that point. As I have indicated, they are largely probing amendments. I look forward to hearing what the hon. Member for Dudley South (Mike Wood) has to say both about regulations and the need for greater clarity. Perhaps this House might have a greater role in determining that figure, scrutinising it and returning to it over time, because I fear that £1 million may well look very different to people in the wider country in 10 or 15 years’ time, long after the Bill has passed through both Houses.