Flood Insurance for Businesses

Debate between Craig Whittaker and Alex Cunningham

Monday 8th February 2016 Commons Chamber

[Craig Whittaker (Calder Valley) (Con)]

The floods that hit the north of England over the Christmas period brought untold misery and suffering to a record number of people. In the Calder Valley, 2,700 homes and 1,635 businesses were flooded. In addition, four schools were affected, two of which are likely to remain closed for the foreseeable future, several bridges were destroyed and the total repair bill for damaged infrastructure currently stands at £32 million.

The Government’s response so far has been most welcome. A £12 million package for households and businesses was made available within days of the flooding to help with the initial incidental costs. Since then, we have seen £5.5 million for the rebuilding of Elland bridge and, most recently, funding to repair and improve flood defences in the village of Mytholmroyd, which was particularly badly affected.

As welcome as the Government response has been to date, there is still far more to do. The communities in my constituency will need a great deal of support over the coming months and years as they get back on their feet.

The Environment Agency is due to complete the long-awaited flood prevention modelling work for the length of the Calder Valley in October. Although improved flood defences and upland management schemes cannot guarantee full protection in the future, there is an urgent need to move ahead with such projects. In addition to flood prevention work and the cost of repairing the damaged infrastructure, there is also the need to work with businesses to ensure that they are able to recover. An essential part of that is ensuring that small businesses are able to access flood insurance.

In response to a recent written question on this issue, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Penrith and The Border (Rory Stewart) said:

“While we recognise the difficult challenges that some small businesses could face in accessing commercial flood insurance in areas of high flood risk, we are not currently aware of evidence that there is a systemic problem. Therefore, we have committed to work with the Association of British Insurers (ABI) and other interested parties to monitor the insurance market for small businesses. We are keen to work across government, and with a range of business interests, to better understand the nature and extent of any problem that might exist”.

[Alex Cunningham (Stockton North) (Lab)]

I am grateful to my former Education Committee comrade for securing this debate and for giving way. This afternoon, I met Alan Smith, the leader of Allerdale council, to hear of the problems in his area and his worries for small and large businesses. Of concern is the fact that excesses of several tens of thousands of pounds are needed in order to secure insurance. What specific role should the Government have in developing some form of Flood Re type scheme for businesses, perhaps with some of that underwriting money that we have for domestic issues?

[Craig Whittaker]

I will come on to what I want the Government to do a little later, but I will also explain what is currently taking place. The hon. Gentleman is absolutely right that the excesses for small and medium-sized businesses are phenomenally unaffordable, as are some of the premiums on offer.

In addition to the written question that I mentioned earlier, the Prime Minister recently stated that he was looking very carefully at this issue and that, although some small businesses are highlighting concerns, the insurance companies, via the Association of British Insurers, state that they would not turn down any small business for flood insurance.

Solar Power and Feed-in Tariffs

Debate between Craig Whittaker and Alex Cunningham

Tuesday 29th March 2011 Westminster Hall

[Alex Cunningham]

Indeed I do. The industry was excited by the scheme that was put in place by the previous Labour Government. It saw real possibilities. I will go on to talk about jobs and the effects that the industry has had in Germany.

[Craig Whittaker (Calder Valley) (Con)]

On the point about uncertainty, I accept what has been said, but does the hon. Gentleman not agree that the REA, 165 of whose member companies are from the solar PV technology industry, has come out firmly and said that the review is the first step in a process that should ultimately end all uncertainty around these schemes?

[Alex Cunningham]

I do not think that the process will end any uncertainty. We will simply be saying to people, “Look, just walk away, because it won’t be financially viable for you to develop the sorts of project that you have in mind.” The Government policy is wrong. We need to ensure that the incentives are in place to develop these projects.

In Herefordshire, work is under way on a 300 kW installation on farm buildings that will not be viable when the new tariffs come into effect. Similarly, the UK’s first ever community-owned solar power station is due to be launched in Lewes in April and is expected to save more than 40 tonnes of carbon dioxide annually. Without the feed-in tariff, that development, to be built on the roof of a warehouse, will not go ahead either, as it is 100 kW in size.

--- Later in debate ---

[Alex Cunningham]

Indeed. The hon. Lady arrived late, and that was the very example I used when I opened my speech.

The fact is that we face a predicted energy gap in 2017, with power cuts anticipated for the first time since the 1970s. I am told that DECC had a taste of things to come last Thursday, when it was subjected to its own power cut, which meant that officials were unable to print important briefing notes for Ministers ahead of DECC questions on the Floor of the House. Perhaps that is why the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), was so badly prepared for questions that day and used the rather shabby comparison with Germany’s tariff scheme when seeking to defend the changes his Department has announced. He said:

“Community-based projects that are larger than 50 kW…and up to 150 kW…will still get a tariff comparable to that paid in Germany.”—[Official Report, 24 March 2011; Vol. 525, c. 1068.]

[Craig Whittaker]

Will the hon. Gentleman give way?

[Alex Cunningham]

No, I have to finish.

The fact is that Germany’s solar industry is far more developed than ours. It has taken the Germans 10 years to build their industry, which employs 65,000 people, and they now have massive purchasing power and control supply chains. That enables them to undercut British construction companies by more than 25%. Indeed, solar generation in Germany exceeded nuclear generation for the first time just last week. The UK is a long way behind Germany, which is why we need to maintain effective feed-in tariffs if we are to have any hope of maximising the potential of this popular technology.

I hope that I have been able to outline the concerns in the renewable industry about not only the changes to the feed-in tariff, but the Government’s reluctance to acknowledge the real potential of solar energy. The decision to make medium-sized solar PV developments above 50 kW unviable is frankly bonkers. It is clear that the Chancellor, not the Energy Secretary, is dictating DECC policy, because the arguments put forward by Ministers for this shift in policy make no sense to those I have been in contact with in the renewables industry.

The fact is that this decision is dictated by the Treasury, not DECC. The spending review committed to finding £40 million—10%—of savings from the feed-in tariffs. We all know that the Tory-led Government are cutting too far and too fast—[Laughter.] We all get that in. The fact that the Government are cutting too far and too fast was made clear this weekend, when 250,000 people took to the streets of London to protest against the scale and pace of the cuts. The provisions we are discussing are one more victim of that ideologically driven policy.

We were told this would be the “greenest government ever”, but I think that that will be added to their growing list of broken promises, given that energy policy is now being dictated by the Treasury. It is time for the Government to admit they have got this one very wrong, choked off many schemes at birth, turned enthusiastic potential developers away, broken promises to the industry, lost the opportunity to create thousands of jobs and set back our chances of ever meeting our renewable energy targets. I hope to get an assurance today that the Government will start listening to the industry and the many others who will doubtless respond to the consultation on feed-in tariffs, as well as to organisations such as the Norton sports complex.

In summary, I would like to pose three questions. First, how do the Government propose to restore confidence in their renewable policy, which has been severely shaken thanks to the shambolic way in which the decision on feed-in tariffs has been handled? Secondly, what is the Government’s long-term vision for solar PV? Evidence from other countries demonstrates that it has the potential to play a significant part in renewable energy provision, yet the Government’s policy is geared towards sidelining it as a purely domestic, small-scale technology. We are not being ambitious enough when it comes to solar PV. Finally, will the Government promise today to listen to the industry during the consultation, because it is very angry about this unexpected change in policy? Will they then act to ditch that ridiculous change in policy? If not, they risk alienating not only the solar sector, but the whole renewables sector.