Flood Insurance

Sheryll Murray Excerpts

Tuesday 26th March 2013 Commons Chamber

[Sheryll Murray (South East Cornwall) (Con)]

First, I ask the House to join me in offering our heartfelt condolences to the family of Susan Norman, who suffered a tragic fatal accident during a landslip caused by heavy rainfall in Looe in my constituency on Friday. May I pay a special tribute to all the people from the emergency services who attended the scene and worked tirelessly throughout the day? I also wish to thank my hon. Friend the Member for Esher and Walton (Mr Raab) for securing today’s important debate.

My constituency has been one of the places worst hit by flooding over the past couple of years. The BBC acknowledged that places such as Looe, Polperro and my own village of Millbrook were some of the worst affected in Britain by flooding in November and December 2012. The heavy rainfall resulted in a lot of damage to highways, infrastructure and homes across my constituency. Cornwall council has estimated the cost of repairing the damage across Cornwall to be about £2.5 million.

I would like to take this opportunity to thank the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon) for visiting my constituency to see for himself the devastating effects of the floods. It meant a lot to my constituents and it also meant that he was also able to see for himself the damage and destruction caused by surface water run-off in both east and west Looe.

The most recent fatal landslip occurred just yards away from one that took place last December. So will the Minister join me in calling for the immediate publication of all road surveys and reports that have been undertaken over the past four years on the roads in the town of Looe and in the wider area of Cornwall? That would allow insurance companies and residents to be reassured, given the obvious and understandable concern that there is at the moment.

The House should be aware that the residents raised the possibility of the landslip that took place last week when they wrote to the council on 15 January. They asked:

“Is there a risk of subsidence or landslide on to the back of or even engulfing our properties?”

They also asked whether they and their homes would be safe. The council’s response was:

“The site has been inspected on a number of occasions and all areas giving rise to concern are included within the current works programme.”

That works programme was due to be completed and the road to be reopened at the end of this week.

The residents wrote again and presented a 60-page dossier to the chief executive of the council in February; they are waiting for a reply. I last wrote to the local councillor for an update in February, but again I am still waiting for a reply. A Looe town councillor, Councillor Brian Galipeau, formally proposed that the town council should take on the job of securing reassurance about the stability of Hannafore road and lane and sought a contingency plan in case of road failure to reassure the residents, and I am disappointed that the request has been met with what I understand to be accusations of scaremongering.

I am sure the Minister will agree that securing reassurance about road stability deserves to be treated in a responsible manner, because it can affect the availability of insurance for those residents. I hope that he will join me in calling for the immediate funding he announced yesterday to be used for physical flood prevention measures and not to employ yet another council officer.

Let me finish by highlighting the situation for two of my constituents. The first was being charged £200 to £300 for her flood insurance last year. Her home was flooded and in January, she was informed that it would cost £530 to renew her policy. The huge increase in her costs caused her to look elsewhere, but the majority of companies refuse to take her on at the moment. Another constituent has had major issues obtaining insurance since her property was flooded. She was informed by her insurance company that it needed a report from the Environment Agency, which has not given the necessary guarantees. I hope we will get some answers from the Minister today.

[Stephen Gilbert (St Austell and Newquay) (LD)]

I join my hon. Friend the Member for South East Cornwall (Sheryll Murray) in expressing condolences to the family and friends of her constituent, who was so tragically killed. It shows the importance of this debate and the need, as all Members have said, for the Government to get on with the job and provide a solution for what will happen at the end of the statement of principles.

There has been tremendous unanimity across the Chamber. I agreed with every word of what the hon. Member for Oxford West and Abingdon (Nicola Blackwood) said and with most of what the hon. Member for Kingston upon Hull North (Diana Johnson) said, although perhaps not the tone in which she said it. I recognise that the Government have worked hard behind the scenes with the Association of British Insurers to reach a solution, but the clock is ticking.

It gives me no pleasure to be standing in the Chamber talking about flooding again, as I think that this is the fourth or fifth time that I have raised the issue in the House. The key point is the continued availability and affordability of insurance. A second issue, which I shall touch on briefly, is the operation of the Bellwin scheme—that is, shall we say, the insurance policy for local authorities that are hit by the cost of cleaning up floods. Before I do that, I want to join hon. Members from all parties who have paid tribute to the volunteers in their constituencies who are helping to build community resilience. Whether they are in Mevagissey, St Austell, Pentewan or Polmassick—or, perhaps most notably, in St Blazey—I see a huge amount of voluntary work in my constituency, with people coming forward and developing strategies and contingency plans.

As we all know, flooding can be devastating, even when there is no loss of life. It can have a devastating impact on businesses and individuals as possessions and memories are washed away. In the clear-up, people need to know that insurance companies will pay out in a timely way and that they will be able to get insurance again for the future. Sadly, there remains a considerable danger that this simple aspiration for business and home owners will not be guaranteed and that affordable flood insurance will become unavailable in our country.

The scale of the challenge is getting worse, not better: one in every six homes are at risk of flooding; 2.4 million properties are at risk from the sea and rivers; 2.8 million homes are at risk from surface flooding; and 5 million people live or work in flood-risk areas. As my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) said, with the extent and nature of the threat we face changing, surely our response as a society should change, too. We are in an era of climate change and we all face unpredictable flooding risks and the potential for great costs. Therefore, I encourage the Government to recognise that this is not a problem that can be contained to specific areas; it is a national problem that requires a national response.

As my hon. Friend the Member for South East Cornwall made clear, Cornwall has suffered hugely with the costs of repairing flood damage over recent years. The latest estimate I have from Cornwall council is that the cost in November and December for last year’s floods alone is £7.4 million in revenue and capital expenditure. The Government have rightly activated the Bellwin scheme, the insurance policy for local authorities hit by flooding.

[Sheryll Murray]

Does my hon. Friend agree that under the Bellwin scheme’s rules the fact that Cornwall was changed to a unitary authority from six districts and one county council has disadvantaged Cornwall considerably?

--- Later in debate ---

[Neil Parish]

I agree with the right hon. Gentleman that the Government can step up to the plate and be the insurer of last resort. However, the point I am making is that the Government must be the insurer of last resort, not the insurer of first resort.

Because there has been so much flooding in the past year, the insurance companies have naturally been putting the maximum possible pressure on the Government. They are in business, so it is right for them to do so. However, given that everybody who pays insurance across the piece will pay for the scheme, the Government must ensure that everybody is dealt with fairly.

It is essential that people who genuinely cannot get insurance—those who have been flooded two or three times, such as my constituents in Feniton—can get insurance in the future. The current statement of principles does not cover them. I am therefore looking forward to the Government putting in place a much better system so that people can access insurance irrespective of whether they have been flooded several times. It is not their fault that they live in a property that is flooding; in many respects, it is planning decisions that generate floods.

In the village of Feniton, there have been appeal decisions allowing more houses to be built where the appeal inspector has actually recognised in his brief that the village will flood and might flood further as a result of the development, but has allowed the houses anyway because the district council has not got its five-year housing plan up to speed. That means that the poor people down the bottom of Feniton will get flooded even more. What is the logic of that? This must be not only about flood insurance but about a planning policy that says we do not build on floodplains or on hills above villages so that the water runs off and floods the people at the bottom end of the village even more. This is something I get quite excited about, because the people who get flooded should not have to put up with it.

Other hon. Members have talked about ensuring that the money for the Bellwin scheme is available when, for example, roads are washed away by floods. Very often, the Government claim that Bellwin is available to local authorities, but when the latter claim it, the Government and the bureaucracy decide that many of the proposed schemes to cover flood damage are not eligible. That has to be dealt with.

[Sheryll Murray]

Does my hon. Friend agree that the Bellwin scheme is only for immediate and emergency repairs, which it is often not possible for local authorities to carry out?

[Neil Parish]

My hon. Friend is absolutely right. If a road or bridge is washed away, the local authority might not be able to put it right immediately, but it will still have an effect on local people and local authority spend.

I am keen for the Government to negotiate a system that gives people access to affordable flood insurance in high-risk areas; otherwise, we will end up putting a levy on all insurance payers, only to find that people cannot get genuinely affordable insurance. That is key. I will want to see in the proposal what the word “affordable” means, because what is affordable to one person is not affordable to another. I do not want the insurance companies gobbling up a great deal of money and then not offering affordable assurance to my constituents in villages and towns that have been flooded.