Water Bill

Lord Moynihan Excerpts

Tuesday 11th February 2014 Lords Chamber

Moved by

[Lord Moynihan]

155: Clause 51, page 107, line 20, at end insert—
“( ) Within 12 months of this Act coming into force, the Secretary of State must publish and lay before both Houses of Parliament a report on the ability of businesses in areas of high flood risk to secure affordable insurance cover.”

[Lord Moynihan (Con)]

My Lords, I shall start by echoing the view that Flood Re is a welcome scheme, and I congratulate the Minister, his colleagues and the industry on introducing it. The scheme is to be supported in principle, but the devil may be in the detail. Other amendments grouped with mine allow the Committee to consider those who will be excluded from Flood Re, their ability to get insurance, and the costs of such insurance. Mine is a probing amendment but, that said, it is important in that it focuses on the significant absence of much-needed support to SMEs in the proposed Flood Re scheme.

Under the current provisions, small businesses of up to 49 employees are covered under the statement of principles. The Bill before the Committee proposes a new scheme, Flood Re, which is substantially built on the statement of principles. However, Flood Re provisions extend only to domestic properties and offer no protection at all to any businesses except a category called “micro-businesses” at risk of flooding. This is a really important distinction between SMEs and micro-businesses. My noble friend the Minister may be able to clear up exactly what that distinction is when he comes to sum up.

--- Later in debate ---

[Lord De Mauley]

I can count on the noble Lord to think of something that I did not arrive in the Committee equipped to answer. If I may, I will write to him.

[Lord Moynihan]

My Lords, I am very grateful to noble Lords on all sides of the Committee for the interest they have shown in this issue. Their contributions have demonstrated how critical it is and what should be in and what is out. I place on record my thanks to my noble friend the Minister for a very comprehensive reply on a lot of issues that have been raised on all sides of the Committee. The noble Lord, Lord Campbell-Savours, is a noble friend on this issue since I am in complete agreement with him. I do not agree with him on every occasion but I certainly do on this one. I say to him that it is not just that some householders did not buy their properties as band H properties; it is that there is no absolute correlation between personal wealth and band H occupancy, a point that I sought to demonstrate at Second Reading. If you accept that principle, surely it is wrong that band H should be automatically excluded. Indeed, the Minister, in his reply, mentioned the 45 properties that were in need of support; that is, owned by people who were not wealthy but would be automatically excluded as the Bill is drafted.

My noble friends Lord Ashton of Hyde and Lord Cathcart mentioned how complicated it would be to change the Bill to take appropriate care of small businesses. I agree that the Bill is complicated; it is complicated throughout. However, surely the thoughts of this House are with the SMEs, the pubs, the guest houses and the farms that have been devastated by the recent floods and cannot now secure affordable insurance provision. They have been hit incredibly hard. If it is not through Flood Re, surely we should be looking to deliver support for SMEs through an appropriate provision. I argue that the Bill is the right vehicle to do that.

I appreciate that my noble friend Lord Cathcart was eloquent in the detail he went into to secure his insurance for his egg business—or “an” egg business, to be fair to him. Such expertise cannot be expected to reside with every publican or small business at the centre of communities serving important commercial and social roles. We should look very carefully at this matter at a later stage.

My amendment simply allows us to study that in detail. I am very grateful to the noble Lord, Lord Whitty, for his support. I am also grateful to my noble friend Lord Campbell-Savours for highlighting the fact that this market will have markedly changed in the past three months. Of that, there is no doubt whatever. It is incumbent on your Lordships’ House and the Government to look at the extent to which that market has changed and to which we need to respond to those market changes.

While I hope that further consideration will be given to these issues—I, for one, will seek to bring them back for further consideration—for the time being, I place on record again my thanks to the Minister for his answer and beg leave to withdraw the amendment.

Amendment 155 withdrawn.