Flood Insurance

Neil Parish Excerpts

Tuesday 26th March 2013 Commons Chamber

[Neil Parish (Tiverton and Honiton) (Con)]

It is a great pleasure to speak in this debate. I, too, thank my hon. Friend the Member for Esher and Walton (Mr Raab) for securing it and the Backbench Business Committee for holding it.

Flooding has been a particular problem in the past year throughout my constituency. Tiverton, Cullompton, Seaton, Axminster and Uplyme have all been affected by flooding and Feniton has been flooded several times. We need to ensure that my constituents and people across the country get flood insurance that they can afford.

I have a great deal of respect for my hon. Friend the Member for Cardiff North (Jonathan Evans), but he speaks, naturally enough, on behalf of the insurance industry. It is a wonderful industry, but it is not terribly charitable. It is there to make a profit. There is nothing wrong with profit, but we must not set up a system that puts a levy on all insurance payers in order to pay for those in flood-risk areas.

[Jonathan Evans]

I do not want my hon. Friend to miss the fact that the “Flood Re” scheme, about which everybody has spoken, is a not-for-profit scheme. It is important that everybody recognises that.

[Neil Parish]

I thank my hon. Friend for correcting me about that being a not-for-profit scheme, but that was not the point I was making.

My point is that when we levy all insurance payers to build up a fund that takes the risk of properties in high-risk areas away from the insurance companies, we should not be too generous because insurance companies are all about taking risk. That is what they are in business for. They should therefore be able to take their fair share of risk. I want to ensure that the insurance companies step up to the plate, but also that the Government help those who, in their areas, cannot get flood insurance under a private scheme on the free market. That is the balance that must be struck.

[Mr Andrew Smith]

Does the hon. Gentleman agree that there is a precedent for the Government’s participating in the way that we are all advocating in the “Pool Re” arrangements that provide terrorism insurance cover?

[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.