FLOOD ANSWERS NEEDED FROM INSURERS, SAYS MARTIN (Cheltenham Liberal Democrats)

Cheltenham Liberal Democrats <info@cheltlibdems.org.uk>

FLOOD ANSWERS NEEDED FROM INSURERS, SAYS MARTIN

October 25, 2007 12:55 PM

Today in the House of Commons, Cheltenham MP Martin Horwood asked Hilary Benn, Secretary of State for Environment, Food and Rural Affairs, about two ways in which the insurance industry may have questions to answer about this summer's floods: the risk to homeowners who buy houses built on land that flooded in July, and the slow progress being made by insurers in actually paying out to small businesses hit by the flood.

Martin Horwood MP: Can I first say I appreciate the Secretary of State's interest in the impact of flooding in Gloucestershire and in my constituency in particular. There are two issues I'd like him to raise with the insurers. First is whether or not it is wise to still keep building planned houses on areas that flooded in July, like Leckhampton in my constituency and whether or not the homes built there will really be insurable at any economic premium? And secondly whether or not the insurers can expedite payments to small businesses impacted by the flooding, many of whom are still waiting for compensation many months later with obvious impacts on their cash flow, bank charges and the interest they pay on their overdraft?

Hilary Benn MP: Well on the second point, Mr Speaker, I'm very happy to pass on the point that the honourable gentlemen has raised to the industry although I have to say that from the conversations I had with many people affected, including when I visited his constituency and those of many other honourable and right honourable members, by and large the insurance industry had responded really well in terms of assessors coming. I understand the point about payments and quite a lot has already been paid out.

On the first of the points, as he will be aware we have very considerably strengthened the guidance through PPS 25, we have given the Environment Agency a statutory right now to be consulted and they are after all the experts on where there is a risk of flooding. Ministers of course have a right to call in proposals. It is a continuing responsibility in the light of that strengthened guidance on local authorities to ask themselves the question: "If you are going to build on a floodplain, can you adequately defend against what is now the increasing risk because our climate is changing?". There are about 2 million homes built on a flood plain. We're in a building which is also on a floodplain but it happens to have defence and so that is what local authorities have to weigh up in taking decisions so that we don't add to the problem we've already got.

Commenting afterwards Martin said:

"The minister's answer showed some progress in both directions. For Leckhampton and other flood affected areas, he has offered us another weapon in the battle against overdevelopment. For small businesses he has promised to take up the issue of late payments with the industry. Let's hope we see some actual results as well."