Water Bill

Lady Hermon Excerpts

Monday 25th November 2013 Commons Chamber

[Dan Rogerson]

We would be much further forward had the previous Government done some of this work before they left office, but we have had to act on what we inherited, which, sadly, was very little.

Members have raised a number of other issues, including the use of council tax banding. I hope that all Members accept that that is a way forward. It may have some problems around the edges, but fundamentally it is the right approach. It is not my intention to move away from what was originally agreed, although the hon. Member for Cardiff North (Jonathan Evans) has made a case on behalf of his all-party group and Members who have an interest in issues such as band H and the 2009 cut-off.

The hon. Member for Kingston upon Hull North (Diana Johnson) made an impassioned plea, understandably, for her constituents and the issues faced by communities such as Hull, which is constructed in such a way that it has historically been subject to flooding. My hon. Friend the Member for Wells (Tessa Munt) pointed out similar issues with her rural constituency. The agreement takes forward the work that was already in place. The hon. Lady set out the argument—although she came to a different conclusion from ours—that we do not wish to incentivise more building in areas prone to flooding, which explains the 2009 cut-off. The Government will respond to any argument for change, but our current view and, indeed, our agreement with the industry—which is, crucially, at the heart of this—is that that is the right way to proceed.

[Lady Hermon (North Down) (Ind)]

Will the Minister give way?

[Dan Rogerson]

I am sorry, but the hon. Lady has not been present for most of the debate and I need to make progress.

The Chair of the Environment, Food and Rural Affairs Committee raised the issue of state aid. We have made it clear that aspects of Flood Re will count as state aid, so under competition rules we will need to seek approval from the Commission. We have been in communication with it and will start, along with the ABI, the formal notification process in 2014.

As we have heard, the aspiration of all this is to move to a free market over the next 25 years. Part of that involves seeking to continue to invest in flood defences and their maintenance, which I have already talked about, and looking at property-level protection schemes to ensure that they can be insured.

Hon. Members have mentioned uninsurable properties. I want to make it clear that no property will be seen as uninsurable initially, but if a property is repeatedly flooded, issues may arise that the scheme will have to take into account as we move forward. Certainly, the expectation is that all properties will initially be covered.

In relation to the impact on bills, a crucial part of the agreement was to get a limit on the proposed industry levy of £10.50 for a combined policy. The ABI thinks that that reflects existing levels of cross-subsidy for high flood risk, but it can of course be set out far more transparently. As I have said, I hope to table the flood clauses as early as we can in Committee, but we have to make sure that they are ready for debate.

We have sought to be as helpful as we can on the issues raised by members of the all-party group. I hope that consensus on a solution that works for those under threat of flooding and that is affordable and deliverable for the industry means there will be support for the proposals as a whole.