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Flood Insurance

Volume 635: debated on Thursday 25 January 2018

6. What progress he has made on ensuring access to affordable flood insurance for people living in high flood risk areas; and if he will make a statement. (903540)

Before the introduction of Flood Re in 2016, only 9% of householders who had previously claimed for a flood could subsequently get insurance quotes from two or more insurers. By October 2017, availability had improved such that 100% of householders could get quotes from two or more insurers. Costs are down, and four out of five householders who have previously made a flood claim have seen price reductions of more than 50%.

It is two years since Storm Eva and, with flood alerts along the River Ouse in York this week, residents living in leasehold accommodation or accommodation built since 2009, along with businesses, have been failed by the Government’s not putting in place appropriate insurance. What recent discussions has the Minister had about this issue?

I direct the hon. Lady’s attention to the record £2.5 billion that we are investing in flood defences between 2015 and 2021, from which people and businesses in York will benefit, as she knows. The rules for leaseholders are quite specific. After careful parliamentary scrutiny, a certain approach was taken so that commercially required insurance was not included in Flood Re. I continue to meet the British Insurance Brokers Association. Members have raised around five cases with me, and those are the ones that I am pursuing.

Flood Re has really helped to cover residential properties, but what about a guest house? Is that a business or a residence? Can it actually get affordable insurance? Businesses, and small businesses in particular, are finding it difficult to get affordable insurance.

As I have said, I have taken up the issue of leasehold properties, and I have had the issue of commercial properties raised with me. Flood Re was a big and quite fundamental change in this country. In fact, every householder supports other householders for a limited period of time to help with flood resilience. It would be a massive change for businesses in one part of the country to subsidise other businesses because of their location choices. I recognise that this is not a straightforward issue, which is why we continue to work with the insurance industry to improve cover.

Many in Cumbria who suffered flooding were affected by surface water flooding. Although the Environment Agency’s flood defences must meet a once in 100-year standard, the water companies are obliged to meet only a once in 50-year standard. What plans does the Minister have to ensure that the water companies are held to the higher standard so that homes and businesses are not put at risk of the devastation and misery caused by flooding?

We are talking about water companies and the protection of assets. Surface water is the responsibility of local councils. We are working on a strategy, led by the Environment Agency, which has overall strategic oversight on this, and we will be doing more on surface water flooding this year.

As we have already heard, parts of the country, including my constituency, were affected by both flood warnings and flooding again this week. The 25-year environment plan gave the Government the opportunity to think long-term about responding to flood risk. Although I appreciate that the national flood and coastal erosion risk management strategy will be updated in 2019, can the Minister explain why the plan itself fails to include any proposals or funding relating to reducing flood risk beyond just the next three years?

When the Government made the decision to have a six-year plan for funding, they dramatically changed the situation for householders and businesses. The decision allowed the Environment Agency to have long-term plans instead of having a year-to-year hand-to-mouth existence. The hon. Lady should welcome the fact that we have that in place, and we will be working on future budgets at the appropriate time.