Flood Re Insurance Scheme

Seema Kennedy Excerpts

Tuesday 6th December 2016 Westminster Hall

[John Stevenson (Carlisle) (Con)]

I beg to move,

That this House has considered the Flood Re insurance scheme.

It is a pleasure to serve under your chairmanship today, Mr Hollobone. I am delighted to have the opportunity to move the motion.

Back in 2005, Carlisle was badly affected by floods, following which substantial investment was made in flood defences. By December 2015, the view was that Carlisle was probably safe from further floods and would not be affected. Exactly one year ago today, however, Storm Desmond struck the United Kingdom and in particular Cumbria. It was an extraordinary weather event, and the floods had a profound effect on our city.

For the record, the emergency services were absolutely brilliant. We must also recognise the contribution of individuals—friends, families, strangers—and communities. They all did a terrific job. I acknowledge, too, the contribution of Government. Central Government and local government rose equally to the challenge of the times, giving great support, manpower and assistance to the community.

To give one small example, the week after the floods I asked the then Chancellor at Prime Minister’s questions if he would support the Cumbria Community Foundation. He indicated that he would match any funding raised. The foundation subsequently raised £5 million, which meant that, with the matched funding from central Government, £10 million was available, helping people enormously throughout Cumbria to recover from the floods. Work by the Environment Agency and the Cumbria Community Foundation is still going on, and people are gradually getting back into their homes. For the future, the Government have also committed a further £25 million to flood defences, which I am sure the EA will invest in and around Carlisle over the next few years.

What of the impact of Storm Desmond? From a Carlisle perspective—not even Cumbria, just Carlisle—more than 2,000 individual homes were directly affected. The knock-on impact on families, friends and the wider city was considerable. Furthermore, hundreds of businesses were affected, ranging from small, one or two-employee businesses to large factories such as McVitie’s, which has more than 800 staff—I am delighted that it is back up in production now.

Nor should we forget the side effects of the floods on sporting facilities. Carlisle lost its tennis, rugby, squash, football, cricket, bowls and athletics facilities. The impact of that on the wider community is quite extraordinary. Furthermore, many people do not appreciate that three secondary schools were also affected. One of them has closed at its original site and is looking to move to a different location. The impact on Carlisle, its community, individuals, families, businesses, schools and social clubs, can therefore be appreciated. The effect was dramatic and is still ongoing.

It is important to set the scene for the Minister and explain what happened in Carlisle as a result of the floods then and subsequently. However, the purpose of today’s debate is to address one particular aspect of flooding, namely Flood Re, which I will talk about from my perspective. A number of my colleagues are present today, and they will have their own views and issues to do with their own local communities, including the impact that Flood Re may or may not have had on individual households and the wider community.

For the record, Flood Re was an excellent bit of thinking by the Government and the insurance industry. Overall, it has been a great success. It took a number of years to get there; nevertheless, it was an inspired bit of thinking by the industry and Government, which reached a sensible compromise that has been hugely beneficial to many people up and down the country. The statistics are starting to tell the story about the number of people who managed to get insurance under the Flood Re regime.

An important thing from the Carlisle perspective was that the 2015 floods came, in many respects, unexpectedly—given what had happened in 2005 and the subsequent work on flood defences. At the time the community was badly affected and morale was low, but the one thing that gave people a little confidence was that through the Flood Re scheme they knew they could get insurance. That was vital for individuals and householders. I congratulate the Government and the insurance industry on Flood Re, because it is a job well done.

Therefore I am not here to be negative; I am here to be constructive. As with any new idea or piece of legislation passed by the House, however, sometimes issues can be overlooked, particular circumstances not taken into consideration, or judgment calls by the Government or the industry might need some adjustment or further thought. Perhaps the Government need to review the Flood Re regime and make some adjustment to it for the future.

I will concentrate on the specific issue of long leaseholders, although I accept that there are other issues with regards to leaseholds and so on. For example, there is what I call the accidental landlord—someone who for whatever reason, perhaps a job, might have to move to a different part of the country. Such people might not be able to sell their house, or they do not want to because they intend to move back to the area, so they lease the property out while purchasing or living elsewhere. That is clearly an issue, because they would not be able to get Flood Re insurance for the house they have vacated. That is a side issue for me, today in particular, but it is worth the Government looking at it.

I will concentrate on the long leaseholder. The purpose of Flood Re, as I understand it, is to help owner-occupiers—those who own their own principal private residence—not commercial owners. I fully understand the thinking about commercial owners, and in many respects I accept that.

[Seema Kennedy (South Ribble) (Con)]

I thank my hon. Friend for securing the debate. He is always a great champion of Carlisle and the north-west. May I make a point about non-commercial, community assets? On Boxing Day in my constituency, the village of Croston was badly flooded by Storm Eva, but Croston community centre is not eligible for assistance under the Flood Re scheme and it has been quoted excess of £35,000. The future of the centre, which of course was a hub of activity in the floods, is now unviable. I know my hon. Friend is concentrating on long leaseholders, but does he have anything to say about that?

[John Stevenson]

I have some sympathy with what my hon. Friend says. In Carlisle, the sporting facilities were badly affected and they have ongoing issues with their insurance. She has raised a similar issue, which the Minister might wish to address when she sums up.