Flood Insurance: Reform of Flood Re

Ashley Fox Excerpts

Wednesday 1st July 2026 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

I thank the Minister for advance sight of her statement, and for our recent conversations about flooding in Somerset.

Flooding is a huge challenge for areas across the country. Some 6.3 million properties in England are currently located in areas that are at risk of flooding, including many in my constituency. When floods occur, the Environment Agency, local volunteer groups and farmers work to help people quickly, often in difficult circumstances. I was humbled and deeply proud to see the way the community pulled together in affected areas during the flooding earlier this year, particularly in Moorland and Fordgate. The Minister knows how seriously I take flooding, and has engaged with me following my requests for stronger national support, clearer local responsibilities, more dredging and improved pumping capacity.

The previous Conservative Government took real action to prevent flooding and protect homes and businesses, ensuring that over 600,000 properties were better protected from flooding and coastal erosion. Between 2015 and 2024, over 900,000 acres of farmland were also protected. In 2020 the previous Government announced a doubling of capital funding for flood defences in England, which rose to £5.6 billion from 2021 to 2027.

Flood Re was set up under the former Conservative Government, and it remains an important scheme to promote the availability and affordability of flood insurance for eligible homes. Its recent accounts report contains serious warnings for Ministers. Flood Re is clear that

“the external environment has changed materially, with higher climate-driven loss volatility, tighter global reinsurance capacity and greater pressure on affordability.”

It says that the scheme is now retaining higher levels of risk and facing “increased liability exposure”. At the same time, Flood Re warns that the scheme is under structural pressure. Its board has said that improved flood mapping has led to

“more properties being classified as high risk…including a growing number of higher-value homes”,

and that without change, the scheme risks being asked to carry

“unsustainable levels of exposure and cost.”

As such, will the Minister please explain what steps she is taking to ensure that Flood Re’s growing pressures do not result in additional costs for households through higher insurance bills? Will Ministers bring forward a credible, long-term flood resilience plan? Do the Government have plans to include businesses in Flood Re? What assessment has the Department made of the impact of these changes on households that are asset-rich but income-poor, including pensioners living in higher-band homes in flood risk areas? In her statement, the Minister said that Flood Re would reform its premium model across council tax bands and regions. Will she publish the modelling behind those changes, including regional impacts, so that households can see what this means for them? Flood performance certificates may help households understand risk, but will the Minister confirm who will pay for them? Will they be mandatory, and will they affect mortgage availability?

Flood Re has done valuable work, but households continue to need affordable insurance. They also need a Government who are serious about flood prevention, resilient homes, and long-term protection for communities. Conservative Members will always work with the Government to ensure that every person living in a property that is vulnerable to flooding gets the support they need.

[Emma Hardy]

I thank the hon. Gentleman, and I recognise his commitment to flood protection. He referenced our meeting, at which we discussed the £50 million that we are putting into Somerset because of its particular landscape and challenges. He is right to highlight the accounts that Flood Re has produced; without reform or change, we would be in a poor situation. Flood Re has been an amazing success, but to continue for the next 10 years, it needs to change. That is why we are introducing the changes that I have mentioned: targeting those who most need support by introducing a cap, making contents cover cheaper for lower council tax bands, and the work on the premium model. One of the other changes, which is probably not as eye-catching, is allowing Flood Re access to some of its trapped capital to make reinsurance costs cheaper. All of the reforms that Flood Re is introducing are intended to ensure that it is sustainable and keeps going.

Turning to continued support for flood protection, the hon. Gentleman will know that we have put the most money into flood protection of any Government ever, with £10.5 billion committed for the next 10 years. There are no current plans to include businesses because, as I said, Flood Re works by levying every insurance company; if we were to include businesses, we would be levying every business in the country to pay for it. For people in the top council tax bands, we are looking at flood performance certificates, so that if they can take action to improve the resilience of their home, that will be reflected in their premiums. We are doing some pilots, and I have been pushing insurance companies and others to get those pilots out the door as quickly as possible. We are not just looking at the top council tax bands; we are also looking at people in social housing to see how flood performance certificates could work.

As for when these changes are going to take place, contents insurance changes will take effect from 2027, but the cap will be from 2028. Up until that period, Flood Re will be carrying out extensive engagement with insurers and other people to make sure they are setting affordable limits. This is all about ensuring that Flood Re is there for the next 10 years.