Water Bill

Steve McCabe Excerpts

Monday 6th January 2014 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Is it the hon. Lady’s understanding that not only would small businesses and micro-businesses in commercial premises not be covered by Flood Re, but people who run businesses from their own homes would find it almost impossible to get insurance under the arrangements as they stand?

[Miss McIntosh]

I welcome the hon. Gentleman’s intervention, but I believe that homes generally are covered. Our Government have persisted with his Government’s arbitrary choice of 2009 as the relevant year, although this is a new Bill and we have a still relatively new coalition Government. I was very taken by what the hon. Member for Stoke-on-Trent North (Joan Walley) said in a previous debate about 2009 having been plucked from the air as an arbitrary date, and many people will not realise that homes built after 2009 on a floodplain are simply not covered by insurance. One of the purposes of tonight’s debate is to entice the Government to seek a different year—it could be 2013 or 2015, but let us be imaginative.

--- Later in debate ---

[Richard Benyon]

I rise to speak briefly to new clause 5, but I also want to touch on the comments made by my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) about Flood Re. I was intrinsically involved in the tortuous and detailed negotiations with the industry to try to come up with something from zero when the coalition Government came into office. We had urgent and overdue discussions about what would replace the statement of principles. All hon. Members would agree that it is absolutely right that this needs to be scrutinised by the House, with ongoing scrutiny of how it works. I hope that the Minister will agree that flexibility should be built into it to enable it to be changed as circumstances change in years ahead.

However, on behalf of my constituents, who suffered some of the worst flooding in the south of England in 2007 and have continued to face flooding in certain areas since, I beg the House not to unpick the detailed negotiations that have resulted in the Flood Re proposal before the House. For example, if we started to introduce a wide range of businesses into the scheme, that would completely change the complex mathematical—probably algorithmic—calculations that will make it viable. I want as many properties to be included as possible, but if we start to say that we want it to include band H houses, different types of businesses, and houses built after a certain date, hon. Members have to understand that that would come at a cost. The cost might be that the industry walks away and that we have nothing, with constituents who live in areas at risk of flooding facing the really terrifying prospect, when we have the kind of weather we are currently experiencing, of not being able to get insurance. The affordability factor that we have managed to build in would be gone, so I just urge the House to have a little caution when—rightly—scrutinising this Bill, which I really believe is right and should become law as quickly as possible.

I want to speak about new clause 5, but I should have started by reminding hon. Members about my entry in the Register of Members’ Financial Interests. I have been accused of obsessing about over-abstraction, and I have been obsessed about it since long before I entered the House. More than 20 years ago, I set up an environmental body relating to a small river in my constituency, the River Pang, which is a chalk stream. It was one of the National River Authority’s ALF—alleviation of low flow—schemes. We managed to stop over-abstraction by a water company at the top of the aquifer and to restore the river. It is currently in desperate need of further restoration, as are others in my area, particularly the River Kennet. It seems strange to talk about over-abstraction when many of our rivers are overflowing at this time, but it is nevertheless a very serious issue. The River Kennet is a site of special scientific interest, and has overlaying European and national designations. It is an example of a river for which we have to find a better solution.

When I was in the Minister’s role, I would dearly have loved to bring meaningful abstraction reform before Parliament, but it would have been wrong to do so. As has already been said, we have been dealing with a regulatory system that dates back to the 1960s, when people did not mention the words “climate change” and we did not have the levels of population and demand that we now face, particularly in the south and east of England. When the consultation and all the work being done by the Department and the Environment Agency is over, I know that we will have about 30,000 abstractions that affect the livelihoods of our constituents and the ability of their businesses to perform and that have a huge impact on our environment. I hope that the House agrees that we must get the system right, and that we legislate in haste and repent—in opposition—at leisure. I hope that we get this right, and that the reassurance the Minister will be able to give us will set my mind, and those of other hon. Members, at rest.

I have said that the problem is complex. Organisations such as the WWF have been a fantastic help to the Government and hon. Members in our thinking about how we should deal with over-abstraction. I regret that the abstraction incentive mechanism originally hinted at in the water White Paper has been diminished in relation to its ability to address abstraction where it will cause real problems to the environment. I hope that it comes forward in the future as a very useful tool that values water differently where it is scarce and where it is plentiful.

There are technical measures in the Bill that will not be talked about in the Dog and Duck, but that are groundbreaking—perhaps game changing would be a better description. The change from using the environmental improvement unit charge method of assessing over-abstraction to putting it in the five yearly price review is a major one that will make a big difference to how we deal with the environmental damage that is caused by over-abstraction.

I looked closely at new clause 5, which was tabled by my hon. Friend the Member for Thirsk and Malton and other Members. I wondered whether it might be an elegant way forward. However, I think that it would face problems. There would be problems in getting the legislation through Parliament. It undoubtedly uses Henry VIII clauses and would give a dramatic power to the Committee Corridor, as opposed to the whole House. That would concern many Members of this House and would certainly concern Members in another place, where they do not like Henry VIII clauses. I hope that the Minister will address that in his remarks.

I then looked at how such secondary legislation would implement the abstraction reforms that we want to see and that will result from the current consultation and the implementation of a new scheme. If that could all be dealt with in the obscurity of the Committee Corridor to a level that satisfied my concerns and the concerns of the many organisations that are worried about over-abstraction now and in the future, that would be fine. However, the use of secondary legislation is a limiting factor. I regret that in my time as a Minister, I did not get my head around what an abstraction Bill in the next Parliament would look like. I suspect that it will be a relatively complicated document. That legislation would be diminished if it was dealt with as secondary legislation, as under new clause 5.

I hope that the Minister will give two assurances. First, I hope that he will address the concerns that were put eloquently by the Chair of the Select Committee, my hon. Friend the Member for Thirsk and Malton, and my concerns about whether such legislation would deliver what we want it to deliver. The second assurance is perhaps an impossible one for him to give, but I will ask him to give it anyway. I hope that he will give an assurance that the Government are as determined as they were when they put together the water White Paper—a document that was roundly welcomed by Members in all parts of the House, the industry, NGOs and every stakeholder I can think of—that abstraction reform will be followed up by his party and mine, and hopefully by other parties, and that it will race through the House in the early years of the next Parliament so that we can see meaningful abstraction reform that addresses the problems that blight so many rivers. This is not just an environmental problem; more fundamentally to many of our constituents, it is an economic one. Not only do we rely on rivers and aquifers for aesthetic reasons and leisure activities; they are fundamental to our economy. That is why it is so important that we get abstraction reform right. I hope that the Minister will give us those assurances this evening.

[Steve McCabe]

I will be extremely brief and confine my remarks to Flood Re. With all due respect to the hon. Member for Newbury (Richard Benyon), if this is the best that three and a half years of intense negotiations can produce, I am not sure that congratulations are in order. As I understand it, the scheme will cover only a fraction of the 6 million homes that are deemed to be at flood risk.

I want to ask the Minister three questions. First, if it is true that there is a 60% chance that the scheme will fall into deficit, and if, as Professor Diacon, who was asked to review it, said, it relies on luck in the first place, what are the contingency plans if the scheme falls apart? Secondly, what will be the trigger for the Government to intervene on the insurance companies if insurance premiums for everyone else, who will not be covered by the scheme, continue to rise to such a point that they cannot afford them?