2011 Public Disorder (Compensation)

David Lammy Excerpts

Wednesday 5th June 2013 Commons Chamber

[Mr Steve Reed (Croydon North) (Lab)]

I am grateful for this opportunity to raise an issue that is of great interest to my residents in Croydon North and to many other people across London and in other parts of the country that were affected by the riots in the summer of 2011.

It is almost two years now since the riots hit Croydon. Businesses were burned to the ground, shops were looted, and homes were destroyed. The Prime Minister and the Mayor of London walked along the devastated London road in the central part of Croydon and promised people that they would not be forgotten and that, while the state had failed to protect them during the riots, it would stand by them as they tried to rebuild their lives. Since becoming the Member of Parliament for Croydon North last November, I have met business owners and residents whose lives were damaged by the riots. They feel completely abandoned by a Government who promised to help them when the TV cameras were on but walked away when the media glare died down.

It is instructive to know how much has actually been paid out compared with the amount that has been claimed. I put in a freedom of information request to the Metropolitan police and found out that that now, nearly two years after the riots took place, only one seventh of the £250 million that was claimed had been paid out—that is, £35.8 million. The Metropolitan police rejected outright half of all claims that were filed, yet the Government continue to claim, and I fear may claim again tonight, that the majority of cases have been settled. The Government might have closed the files, but the cases have not been settled to the satisfaction of the people who were affected. They feel very strongly that the Government have given up on them and walked away. It is no wonder that the chair of The High Street Fund, Sir William Castell, has described the Government’s compensation schemes as a “disgrace” because of how slow they have been at paying out to people who need and deserve that additional money.

I have here some quotes from the Prime Minister during the debate in this Chamber on 11 August 2011. He said:

“I confirm that any individual, home owner or business that has suffered damage to or loss of their buildings or property as a result of rioting can seek compensation under the Riot (Damages) Act 1886, even if uninsured.”

In response to my right hon. Friend the Leader of the Opposition, he said of the money that would be made available that

“the Riot (Damages) Act has no cap at all…people will be able to apply to the police and the Government will stand behind the police.”—[Official Report, 11 August 2011; Vol. 531, c. 1054-59.]

The Government’s promises were good. What the Prime Minister offered to do was exactly what they should have been doing; the tragedy is that the reality has not matched the rhetoric.

What I hope to demonstrate, and hope the Minister will respond to, is my fear, and the fear of many people who have suffered as a result of the Government’s failure to intervene, that the Government are hiding behind definitions to avoid paying up. For instance, they are refusing to replace damaged, old business equipment with new business equipment, even though in many cases businesses are unable to buy like for like, and therefore cannot replace them, get their businesses going again and get their livelihoods back.

The Government, and the Metropolitan police, have also failed to define the riots properly in some parts of London. My right hon. Friend the Member for Holborn and St Pancras (Frank Dobson) has been in correspondence with the Home Secretary about Chalk Farm, where the riots were defined as “public disorder”, which means that the Riot (Damages) Act does not apply to businesses and individuals in that part of London who were affected.

Statistics do not give the full scale of what happened. They fail to tell us the human side of the Government’s failure. Individual stories tell us much more than statistics. I would therefore like to refer to two specific cases involving constituents of mine whose lives remain blighted by riots that happened nearly two years ago.

First, a gentleman called Mr Mumtaz Hassan and his wife ran a dry cleaning business on the London road in west Croydon. Their business was burned down by a mob and as a result their livelihood has been destroyed. Two years later, they have not been paid a single penny in compensation. All they have been offered is like for like. It was an old business that they had taken over. They cannot afford, with what is on offer to them, to pay for new dry cleaning equipment. As a result, that family risk losing their home, because they have no livelihood or income to maintain their mortgage payments. Two years later, the riots are still creating new victims and it is time that the Government stepped up and helped people as they promised in the immediate aftermath of those events.

Secondly, Miss Charlene Munro is a single mother who at the time lived in a flat above a business on the London road with her three-year-old son. When they saw rioters rushing down the London road, smashing and looting their way through the shops, they fled their home. They returned the next day to find the shop and the flat where they lived burned down and all their possessions destroyed. Absolutely everything they owned was gone. She put in a not unreasonable claim of just £6,000 for all her possessions. She received a paltry £2,500 in payment, which is absolutely inadequate to replace all the possessions, clothes and electronic goods that the family owned. She is unable to replace them. In her attempt to build a new home for her three-year-old son, she had to go into debt and is now so burdened with debt she has been forced to file for bankruptcy. The Government say that her case has been settled. It is not settled in any meaningful way other than that the Government have simply closed the file and are refusing to provide her with the support she deserves and was promised.

Some businesses are still being held liable for rent or mortgage payments on properties that have been burned down. Many insurers are going far too slowly in dealing with claims for damaged property and goods.

[Mr David Lammy (Tottenham) (Lab)]

I am grateful to my hon. Friend for the manner in which he has brought this issue back to the House. Is he also concerned about premiums rising in riot areas such as his and mine, and does he agree that the absence of engagement with the Riot (Damages) Act 1886 means that areas are being abandoned and that that could lead to a Detroit-type scenario in this country, with completely barren areas without any insurance presence?

[Mr Reed]

I thank my right hon. Friend for his intervention. I compliment him on his work as the Member for Tottenham in standing up for riot victims not just in his constituency, but elsewhere in London. That has been of great reassurance to my constituents as well as his. I absolutely agree with him. The issue is not just that premiums have gone up in areas hit by the riots; businesses have even told me that they cannot get insurance at all.

If we hollow out whole areas of London, we will further blight the lives of people who, through no fault of their own, were victims of hooligan mobs trashing and looting their way through London. We need the Government to step up to the mark, take on the issues that confront these areas and work with insurance companies to ensure that whole areas do not get blighted because of incidents two years ago that were nothing to do with the people who were living their lives peacefully and running businesses there.

--- Later in debate ---

[The Minister for Policing and Criminal Justice (Damian Green)]

I thank the hon. Member for Croydon North (Mr Reed) for raising this important subject. I take this opportunity to pay tribute to his predecessor, Malcolm Wicks, who was extremely assiduous, as all those who knew him would expect, in representing the victims of the riots in his constituency before his very sad death.

I am, of course, aware that the Croydon North constituency was one of the areas most severely affected by the riots of August 2011. I, like everyone in the House, sympathise with the individuals and businesses in that area, across London and across the country that experienced losses because of the riots.

Given the tone adopted by the hon. Gentleman, it is important to make sure that we have the facts and figures on the record. I note, for example, from local media coverage in March 2013, that it was claimed that as many as 40 claims for compensation under the Riot (Damages) Act 1886 appeared to be outstanding in Croydon alone. It is simply not the case that there are 40 outstanding uninsured cases in Croydon, as only 11 uninsured cases remain unresolved nationally, nine of which are in the Metropolitan police area.

The hon. Gentleman quite reasonably brought up some figures, so I am sure it will help him and the House if I quickly run through the latest statistics on compensation payments. They show that 577 uninsured claims were originally made, of which five remain outstanding—about 1% of the original total. A further 716 uninsured claims were later received by the Metropolitan police. These were largely made after insurance companies had repudiated claims. Only six of that latter group of claims are unresolved, which is again around 1% of the original total.

The largest category of outstanding claims represent insurance companies seeking compensation from police and crime commissioners for reimbursement of settlements paid to policyholders. This does not affect individuals or businesses who have received some form of payment from their insurance company: 3,935 of these types of claim were made and 270—about 7%—are outstanding. So far, PCCs, and in London the Mayor’s Office for Policing and Crime, have paid out just over £30 million in claims.

The hon. Gentleman brought up the Government’s initial response to the riots. Indeed, through the Department for Communities and Local Government, the Government quickly set up funds to help individuals and businesses to get back on their feet, and these schemes paid out £10.8 million.

With specific reference to compensation payments under the Riot (Damages) Act, the Government took swift action by extending the application period from 14 to 42 days, by replacing the antiquated prescribed form with a simple claims form and by setting up a Home Office bureau to act as a single point of contact to advise claimants and take in applications.

From recent correspondence with Members, I am aware of a few individuals—the hon. Gentleman mentioned them—who have had to continue making mortgage payments on properties left uninhabitable by the riots. I should say that this type of loss is not covered by the Riot (Damages) Act, and I shall come on later in my speech to the inadequacies we have identified in a what is a rather old Act. I have recently written to the Council of Mortgage Lenders, which has agreed to liaise with lenders to see whether a more sympathetic approach can be taken. I am happy to assure the hon. Gentleman and other Members that my officials are working closely with them. In the end, this is a commercial decision for mortgage lenders, but as I say, we are taking action on this.

[Mr Lammy]

My hon. Friend the Member for Croydon North (Mr Reed), other Members and me have pressed this case for years with the Association of British Insurers. It must be unacceptable that people still find themselves in receipt of insufficient funds to get back on their feet.

[Damian Green]

As I say, particularly in the case of the mortgages, it is for the mortgage lenders to decide in the end, but I have explained that I am doing what I can to persuade them to take a sympathetic attitude to individuals who deserve help.

As the House will know, all those who made claims under the Riot (Damages) Act were offered sums in settlement. In case they were unhappy with their offers, the PCCs—and MOPAC in London—established a right of appeal, which a number of people have exercised. At the outset of the riots, the Government made a commitment to back the costs incurred by police forces in meeting Riot (Damages) Act costs, because that was another potential problem. We have provided that backing, and will continue to do so until the few remaining claims have been settled. So far the Government have paid some £30 million to forces to meet Riot (Damages) Act costs, as well as meeting the operational costs of policing the riots, which totalled £97 million.

--- Later in debate ---

[Damian Green]

That is part of the principle of the Act, but it is not the whole point of it. The right hon. Gentleman has been a Minister and he knows that Ministers have to obey the law like everybody else.

I take the point about money, and MOPAC has been making some interim payments. I understand that about £10 million has been paid out, including some to residents of London road.

Underlying all this is the unsatisfactory nature of what is 19th century legislation. As I set out in a written ministerial statement last month, we have appointed Neil Kinghan to conduct an independent review of the Act. That has already begun and is expected to be completed by the end of September.

[Mr Lammy]

Will the Minister ask Neil Kinghan to meet Members and constituents who have been affected, because he has not got in touch so far?

[Damian Green]

Well, he only started two days ago, I think. He is very keen—