Draft Flood Reinsurance (Amendment) Regulations 2025

Julian Smith Excerpts

Wednesday 26th February 2025 General Committees

[Dr Neil Hudson (Epping Forest) (Con)]

It is a delight and a privilege to serve under your chairship, Ms Vaz. I thank the Minister for laying these important regulations.

I am pleased to say that His Majesty’s most loyal Opposition are happy to support this measure, which will help to ensure that Flood Re can continue to operate effectively. As the Minister articulated, the Flood Re scheme is vital. Since its inception in 2016 under the Conservatives, many people have relied on the scheme. We have sadly seen increasingly frequent extreme weather events in recent months and years, with the number of named storms continually going up, so it is important that people have coverage. When those extreme weather events cause flooding in the United Kingdom, they have brought horror and devastating consequences to many people’s livelihoods and finances.

The Minister and I have great mutual respect. We have talked a lot about the severe financial implications when floods hit, and about the human implications—the mental health impacts, the stress and anxiety of people who worry about being flooded and then the trauma when they are. The Flood Re scheme is vital to mitigating, to some degree, the things people go through. Enabling the effective use of Flood Re to support those affected by flooding will not only mean that people receive the financial support they need, but reduce harm to their mental wellbeing, because they know that some support is there when they need it most.

With that, and given that not having an effective Flood Re scheme may result in high-risk households being left without flood insurance, it is a clear and common-sense decision to support this statutory instrument. The increase in the levy is therefore a pragmatic decision, which I note takes into account inflation. According to the Government’s assessment, the cost of the increase in the levy, which will most likely be passed on to consumers through the premiums, is estimated to be about £1.60 per policy.

Although I welcome reaffirming the importance of Flood Re, I hope to see more ambition from the Government about the scheme’s future expansion—I have talked to the Minister about that before. There is potential to expand the scheme, and we have talked a lot about whether businesses can come under its umbrella. What discussions has the Minister had with businesses about the potential merits of expanding the scheme to include them? Equally, there are people who live above their business, so a composite home and business could be affected by flooding. Again, in the spirit of cross-party consensus, I hope the Government will move forward to help more people when floods hit.

Furthermore, the eligibility for Flood Re states that a home must have been built before 1 January 2009. Although I appreciate that regulations have since been strengthened to consider flood resilience, the Minister will be aware that properties continue to be built on at-risk floodplains. In the light of the central, top-down Government targets that are coming for house building, which may mean that more houses are built in at-risk areas, will the Minister ensure that homes built after 2009 have the security of flood insurance? Will she consider expanding the Flood Re scheme to include homes built after 1 January 2009? Labour Back Benchers have also called for that.

Helping people who are traumatised by flooding is above party politics. I have been calling for the expansion of the Flood Re scheme for some time. I hope that the Minister, her colleagues and her officials in DEFRA can look at its merits and talk to the Treasury about that too.

More broadly, as well as insurance, prevention is key. The last Government protected more than 600,000 properties from flooding between 2010 and 2024, and published a policy statement to make England more resilient, with 40 actions and five ambitious policies stemming from that. Furthermore, in March 2020, it was announced that the flooding budget would be doubled to £5.2 billion over the next six-year spending period to deploy more flood schemes. The Minister has confirmed that the Government will bring forward a flood resilience strategy. When can we expect it to be published, and will it include specific targets?

The Government have also launched the floods resilience taskforce. At the last count, we believe it has met only a couple of times recently—if it has met more than that, I stand to be corrected—despite the increase in drastic and devastating flooding. We want it to meet more frequently. Can the Minister assure us that it will meet regularly, and sometimes in advance as these frequent events come down the pipeline? We know flooding will happen in the winter months, so can the taskforce meet more regularly? What has the taskforce done to tackle flooding, especially after the storms that have recently hit the UK? How will it protect residents, farmers and businesses from the next set of storms that we know will come?

For properties that are sadly flooded, support is required. The last Government introduced the frequently flooded allowance, which was a ringfenced fund of £100 million to protect areas that had been affected by repeated flooding. The Government have yet to confirm whether that funding will continue and whether it will be ringfenced. Can the Minister enlighten us on the Government’s plans?

The support available to handle the aftermath of flooding, such as the Flood Re scheme that we are talking about today, has also included discretionary funding, such as the Bellwin scheme. Again, the Minister and I have had exchanges across the Dispatch Box on this issue. When such events happen, can she assure us that there will be cross-Government talks to make sure these support schemes can be activated on a pragmatic, compassionate and case-by-case basis?

[Sir Julian Smith (Skipton and Ripon) (Con)]

Does my hon. Friend agree that engagement must happen with councils as well? North Yorkshire has suffered very badly from floods recently, but the engagement with North Yorkshire council has often been lacking, from not only this Government but previous Administrations. That is largely based on cost, but that engagement is key.

[Dr Hudson]

I totally agree. There needs to be joined-up thinking at all levels of government, including local authorities. There also needs to be engagement with local emergency resilience groups, many of which are volunteers. When storms and floods hit, can people get the information they need? DEFRA could work with the Environment Agency, local authorities and emergency resilience groups to help people when they are flooded. There needs to be a co-ordinated effort that considers things such as planning, insurance, flood prevention, support and response. I hope that my questions are constructive in helping people when they experience dreadful flooding events. We support helping Flood Re to do its excellent work.

Water Companies: Regulation and Financial Stability

Julian Smith Excerpts

Wednesday 23rd October 2024 Westminster Hall

[Tim Farron]

I very much agree. Regulation is the key. Welsh Water is not for profit and Scottish Water is publicly owned, yet they both still face major problems with sewage discharges. As my hon. Friend is getting at, there is evidence that although ownership and finances matter, effective regulation is the key, and we simply do not have that at present.

[Sir Julian Smith (Skipton and Ripon) (Con)]

I thank my constituency neighbour for giving way. Does he agree that as well as regulation, commissions and the initiative proposed by his party, there is a massive breakdown of trust within the industry? I spoke to one of the major investors in Thames Water and asked them to tell me the last time that the regulator, the Government and the company’s investors were in a room together, and that had never happened. Among all these initiatives, does the hon. Gentleman agree that getting people together to talk about their different equities and priorities, and how they deliver for the consumer, is also key?

[Tim Farron]

I agree. Although I also think an urgency is needed that many people who own water companies do not demonstrate, and that is why the Government need to lead—but I do think it is right that we get people together to make things significantly better.

Over the past 33 years, for every pound that water companies have spent on infrastructure and doing their job, 80p has drained away to finance debt and pay dividends. That is an appalling waste of billpayers’ money and water company assets. The separation of operating companies from parent companies, where the regulated operating company racks up huge debts to allow the unregulated parent company to pay huge dividends, has been a disgraceful scam. I am sure that my hon. Friend the Member for Witney (Charlie Maynard) will say more about how that model has done such damage to the customers of Thames Water; suffice it for me to say that that model of ownership must cease. For the regulator to have stood idly by while that has happened is unacceptable, and for it not to step in as similar asset-stripping begins in other water companies is an abysmal dereliction of duty by it and the Government.

What is to be done? I just want our waterways to work and to be clean and safe. I am not convinced that renationalisation would be a good use of public money. It could mean putting taxpayers’ money into the pockets of those who have already made so much money out of them without a single extra penny going to improving infrastructure. We propose a radical move away from the current model: water companies should be community benefit corporations, ensuring that all revenue goes into keeping environmental standards higher and solving the long-term problems of our network. Given that 45% of all water company expenditure has gone on debt financing and dividends, that kind of ownership and governance reform should mean that there is more money available for infrastructure renewal.

Oral Answers to Questions

Julian Smith Excerpts

Thursday 12th September 2024 Commons Chamber

The Secretary of State was asked—

[Sir Julian Smith (Skipton and Ripon) (Con)]

1. What steps he is taking to promote innovation in the agricultural sector.

[The Secretary of State for Environment, Food and Rural Affairs (Steve Reed)]

First, I add my congratulations to the Speaker’s Chaplain on her distinguished tenure, and to Terry Wiggins, who has been here much longer than all of us.

I thank the right hon. Member for his question. The Government recognise the importance of innovation in supporting farmers to boost Britain’s food security, drive productivity and improve nature’s recovery. The UK has world-class science and innovation capabilities. The Government will promote the UK as a great place for technology innovators, which will drive investment, economic growth and create high-skilled jobs, supporting farmers to embrace the latest technology and best practice.

[Sir Julian Smith]

One of the challenges for risk-taking farmers is the regulatory environment. Will the Secretary of State update the House on how he will bring together Natural England, the Environment Agency and other agencies to reflect and be much more responsive to the enterprise culture in farming?

[Steve Reed]

I share the right hon. Member’s interest in the need for effective regulation. I will soon make an announcement about our intentions to review regulation to ensure that it is fit for purpose across the Department and helps to achieve the priority objectives that we have set out as a new Government and ministerial team.