Draft Flood Reinsurance (Amendment) Regulations 2022

Daniel Kawczynski Excerpts

Wednesday 9th March 2022 General Committees

[Alex Sobel (Leeds North West) (Lab/Co-op)]

It is a pleasure to serve with you in the Chair, Mr Robertson. I thank the Minister for introducing the draft regulations.

In recent years, we have seen a sharp increase in extreme weather events all over the world. In the UK, storms and increased rainfall have destroyed homes and claimed lives. We are now at a point where communities are faced with flooding on a semi-regular basis. For those communities, flooding brings misery and huge inconvenience. It can also be financially devastating, which is why people living in flood-risk areas must have access to good, affordable insurance.

In my constituency, that happened on Boxing Day 2015, when the River Wharfe flooded parts of Otley. Since being elected in 2017, I have had to support flooding victims on the difficulties of getting reinsured due to the increased risks. Flood Re has been useful to my constituents, so I am particularly pleased to be responding to the draft legislation. Independent research shows that the availability of insurance for householders at risk of flooding is improving, so I am pleased that Flood Re has been successful in that respect. I am also glad that the scheme is financially secure—it has met its initial liquidity and capital requirements, and has a high solvency ratio.

For those reasons, I agree that reducing the levy on insurance companies from £180 million to £135 million a year makes sense. The figure needs to be kept under review, as climate risk will mean that insurance risk will vary. I will continue to monitor that and hold the Minister to account in future years if more support is needed for flooding victims.

Her Majesty’s Opposition have some questions, which I would be thankful if the Minister will help to address. Flood Re proposes to reimburse insurers up to £10,000 for the Build Back Better scheme in order to reduce the future risk of the property flooding and/or the cost of repair. That will mean that property owners can pay for repair after a flood, which makes the home more resilient to flood damage than before. I was pleased that the Minister mentioned air brick covers and other such innovations in her introduction.

I am very much in favour of the support, but I am concerned that, under the proposals, insurers are not obligated to participate in the Build Back Better scheme. Does the Minister not agree that it should be compulsory for all Flood Re policies to participate in the scheme, when we consider the increased threat of flooding and subsequent need to make buildings more flood resilient? Has she considered making the measure compulsory and, if so, what are the reasons for her rejection of that?

In addition, I will express concerns that I know have been raised in the past, but that I am not convinced have yet been adequately resolved. The existing proposals protect only homeowners. Will the Minister consider widening access to the scheme to protect those in tenanted and rented properties? Renters are likely to be more vulnerable to the financial impact of flooding and yet, under the proposals, they are the least protected. Renters are also less likely to realise the flood risk of their property and many renters are in precarious employment that might be dependent on equipment which could be destroyed in flooding, leaving them without income. Insurance becomes the difference between them working and not.

I have also been in contact with farmers, who are concerned that their homes are not protected under the scheme. Will the Minister clarify the status of farmhouses, which fall into a grey area between residential and business premises?

The scheme is targeted towards households at high risk of flooding across the UK. If recent years and the extreme weather events that have defined them are anything to go by, however, we know that high risk—risk in general—is broadening its scope, and areas previously deemed to be safe now experience flooding events never seen before. Therefore, how is “high risk” defined by the Environment Agency, and how are areas reassessed in a way that keeps up with the impact of extreme weather events? I want to know whether the Minister has had discussions with the Environment Agency about risk. I am interested to hear what assessments were made about the changes that might be needed.

Finally, I draw attention to the fact that more than 5,000 new homes in flood-risk areas of England were granted planning permission last year, despite the Environment Agency advising against such developments. Does the Minister agree that the Environment Agency should be given power to ensure that homes are not built against its advice? In my view, that is a crucial change to avoid unnecessary future flooding and the devastation that comes with it. I hope that the Minister will address my concerns.

I can see the Minister desperately looking for her papers, so I will talk for a few more seconds to give her time.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

She is all right.

[Alex Sobel]

The Minister is doing very well. I am sure she will give a full response to all my queries. People up and down the country, whether homeowners, renters or farmers, are all keen to get clarification on those points. She shares my concerns about the increased number of flooding events and the impact of climate change on our rivers. We need to be constantly mindful of the risks involved in potential flooding events. If she does not need more time, I will conclude.

--- Later in debate ---

[Daniel Kawczynski]

I know that the River Severn flows through your constituency, Mr Robertson. I am the chairman of the caucus of 45 Conservative Members of Parliament through whose constituencies the River Severn flows. We represent 12% of the Conservative parliamentary party. Unfortunately, flooding is now an annual disaster for our constituencies. The sheer damage and economic chaos for places such as Shrewsbury following the annual flooding of the River Severn is wholly unsustainable for our communities.

I am extremely grateful to the Minister for taking the time to visit Shrewsbury last year, when she had the opportunity to meet the River Severn Partnership, a consortium of councils that represent communities across the whole of the River Severn, Britain’s longest river. Let us not forget that we are the communities that live by the River Severn. I am particularly pleased that the Minister has spoken about her interaction with devolved Assemblies and, following my discussions with her earlier this week, I am grateful to her for visiting the source of the River Severn and for initiating dialogue with her counterparts at the Welsh Assembly.

Will the Minister give the assurance that she will continue to work with the River Severn Partnership and with me, in my role as chair of the caucus of 45 Conservative Members of Parliament who have the River Severn flowing through their constituencies? I can tell her unequivocally that this is the single biggest detrimental economic barrier to the development of our constituencies.

My hon. Friend is a very effective Minister, if I may say so. I look forward to her ongoing negotiations with the Treasury and other parts of Government, and with the Welsh Government, to ensure that we find a long-term, holistic solution to managing Britain’s longest river.

--- Later in debate ---

[Rebecca Pow]

The Bellwin scheme comes under the Department for Levelling Up, Housing and Communities. Although I am the floods Minister, there is only one significant fund that comes under DEFRA, and that is for farmland. That is why we have to work with other Departments. The Bellwin fund is very much for local authorities to cover the urgent and drastic clean-up required after a flood. I will write to my right hon. Friend on the issue of flooding on the roads, but I take his point.

I thank my hon. Friend the Member for Shrewsbury and Atcham, who talks to me regularly and is a massive advocate for his constituency. I am sorry that it has had flooding recently. He knows that there are schemes under way, and we are going to have a meeting about some additional ones. I welcome his work chairing the partnership of 45 MPs who represent constituencies up and down our enormous and important River Severn. He will know that we have recently given funding to do some much wider, innovative and creative thinking about how to tackle flooding right up and down the whole catchment. Some pilots have already started. A lot of that involves nature-based solutions, as well as hard flood defences and so on. It also involves speaking with our devolved colleagues in Wales. I am really working hard on that, because the river does of course have two sides—in England and in Wales.

[Daniel Kawczynski]

My hon. Friend is doing a very good job. I am grateful to her for visiting Shropshire and the River Severn. Bearing in mind that we are seeing an increased frequency in flooding and the devastation it is causing to our communities, does she agree that £5.3 billion of extra funding for DEFRA is not sufficient and that we need to lobby the Treasury for even more money for flood defences?

[Rebecca Pow]

I would say that my hon. Friend is being a bit cheeky, actually. It is £5.2 billion—an extraordinary amount of investment in flood defences and coastal erosion, covering up to 2,000 defences, and an awful lot of other schemes and projects. It is not the only money, either. That is why I say it is so important to work with other Departments to attract levelling-up funds and so on.

I will give an example. I recently launched flood defences in Hull; £42 million was spent on eight different schemes along the Humber estuary. Because that has made people feel more secure and businesses now know they are not at risk of flooding, they are flooding into Hull and setting up. One of the big manufacturers of safety equipment that businesses use, including covid safety equipment, moved there. It was encouraged to go because it knew that it could now get insurance and that it would be safe. There are so many things in addition to that money, but we have to make sure that it is well spent. Of course, the money has to come from somewhere, and the Government have to be very mindful of how we spend our funds.

I hope that I have covered all the questions. This SI will improve the efficiency and effectiveness of the Flood Re scheme and help to build a nation more resilient to future flooding, which is what we need, and that is better able to cope with the changing climate. Once again, I thank everyone for their contributions, and I thank you, Mr Robertson.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Flood Reinsurance (Amendment) Regulations 2022.