Riot Compensation Bill

Debate between Steve Reed and Mike Penning

Wednesday 13th January 2016 Public Bill Committees

[Mike Penning]

I fully understand and also respect, not least because of the conversation that we had outside, the right hon. Gentleman’s probing amendment. I have to agree with him that “must” goes a bit too far, but I fully understand exactly where the amendment is coming from.

May I say at the outset that we are looking to put together an approved list of loss adjusters who will be responsible should riots take place? Obviously this is different from the insurance side, because these measures are for people who are uninsured.

[The Chair]

The Minister mentioned the issue of insurance and I wanted to raise that issue in this regard. The areas that tend to be worst affected by riots tend to be poorer areas, as my right hon. Friend the Member for Tottenham has described. One of the issues that affected businesses in the London Road area just outside the town centre of Croydon—it was the London Road that was hit the hardest; that is where businesses tend to be poorer and to be led by ethnic minority owners—is that after the riots insurance premiums grew so rapidly that many of those businesses became uninsurable. That led to further pressure on those businesses to close down. The last thing that we want to see is areas that are already poor, and where businesses are starting to grow and bringing life back into those areas, being hollowed out and shops closing down. Do the Government have any intention of addressing the issue of insurance becoming unaffordable in areas that have previously been hit by the riots?

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[Mr Reed]

I will be brief. The proposal for the Secretary of State to be able to set up riot claims bureaux is welcome and a sensible move forward.

First, after the 2011 riots one of the problems was that communities did not have a voice in decisions taken about compensation or about models of reinvestment in affected areas. For example, in Croydon the council set up an independent riots panel with the community, but three years later, when I held a review meeting with people who had participated in the panel and with businesses and agencies affected by the riots, I found that not one of its recommendations had been implemented in full. That was extremely disappointing for the community, who had been told that they would be listened to and that action would be taken, although, regrettably, subsequently it was not.

Secondly, the riots recovery fund allocated by the Greater London Authority, a sum in excess of £20 million, was handed to the council, but half the money was spent in an area that was not among the worst affected by the riots and the other half was simply left in the bank account for several years until the GLA asked for it back—reasonably, if the money was not going to be spent. The businesses and property owners in the affected areas again felt severely let down, because not only had they been promised additional support, but it had been made available and never used.

If riot claims bureaux are to be set up, are the Government minded to ensure community representation on them? The needs and wishes of the community should be fully represented in decisions taken in the aftermath of riots, if we are ever unfortunate enough to see a repeat of the disturbances that happened in 2011.

[Mike Penning]

That is an important point. From my own constituents’ point of view, I understand the frustration when money is sitting in a bank account and not being used by the local authority. I cannot comment on why that happened, because I do not know, but I fully understand the frustration.

If we are asking local people to take part in and to be part of their community—if we believe in localism—it is critical that they are listened to. Perhaps the hon. Gentleman and I could meet after the Committee. I will look into the recommendations that were made—I was not in post at the time—and we can see the reasons why they were not implemented and whether those reasons were logical. The Secretary of State wants the power to do something with the local community—localism in action—which is exactly what he will do.

Question put and agreed to.

Clause 6 accordingly ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

Clause 8

Amount and payment of compensation

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[Mike Penning]

I can immediately alleviate the right hon. Gentleman’s concerns. No matter where the charitable donation comes from it will be outside the £1 million, and I will set that in regulations.

[Mr Reed]

Croydon, of course, is the king of the suburbs. The mayor of Croydon set up a fund immediately after the riots. Many of the generous citizens of Croydon donated to that and were aghast to see that the money that was handed out to businesses and individuals that had suffered was deducted from the compensation payments made. I hope the proposal that the Minister now makes will also address such circumstances.

[Mike Penning]

It will. I completely agree morally that charitable donations should stay outside, whether from a lady putting 50p in a tin on the high street, as I know took place, or from some of our great businessmen coming together to offer help. I will set that in regulations. I hope that alleviates concerns on amendment 4.

On the £1 million cap, we have to be honest about what the Bill is for. It is a safety net for those who are not insured should a riot affect them and their businesses. Of course, if it is taxpayers’ money a limit has to be set somewhere, and 99% of all claims following the terrible riots that took place across the country in 2011 were below that limit. I am happy to share that information with colleagues before Report.

In looking at where to set the cap, we should not encourage people not to be insured or insurers to take the view that the state will pick up the cost for which they and businesses have responsibility. That is why we set the cap at £1 million. I will make the commitment today that that will be continually reviewed within regulations without the need for primary legislation. At the moment we have very low inflation nationally, although building and residential inflation is quite high, particularly in London. We will keep a close eye on that but there has to be a limit. There cannot be a blank cheque from the taxpayer; I think we all accept that.

In response to the shadow Minister’s point, if the money comes out of the police or Home Office budget, it is still taxpayers’ money and there is a limited amount available. I think £1 million is fair and we will keep it under review. We will also ensure that charitable donations, no matter where they come from, are exempt, and I will place that in the regulations for the Bill. I hope that the amendment will be withdrawn.