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My understanding is both. In this group, the issue of connections is relevant. If this is a misunderstanding, the record will show that the Minister had the opportunity to comment on automatic connections. There are two issues here, although the Minister satisfied the industry on one of them when he said that water and sewerage companies will have the opportunity to be consulted on national building standards. That is clearly on the record. However, the fact that the approving body should be compelled to include the requirements
of the sewerage undertaking, identified through a statutory consultee response provided by the sewerage undertakers as part of the approvals process in the final approval of any sustainable development connecting to the sewer, will not now be written into the Bill.
Huw Irranca-Davies: I think that this may be a genuine misunderstanding. If the hon. Lady seeks confirmation that water companies are statutory consultees of the SUDS approving body, I can give that confirmation. I can also confirm that they must have regard to the water companies' advice. The SUDS approving body can set conditions on approval based on that advice, but water companies have a general duty to provide, maintain and extend the public sewerage system in their areas.
Miss McIntosh: That is very helpful, but I still do not quite understand the logic of what the Minister said in responding to our new clauses and amendments. It seems that the Government are accepting internal drainage boards and the Environment Agency as statutory consultees but refusing to accept water and sewerage companies, although it is those companies that will be affected in the event of an overflow and a lack of capacity.
I think that there is common ground between us and the Liberal Democrats on flexibility. I readily agree that county councils should be responsible for sustainable drainage systems in relation to highways. However, we seem to have reached an impasse owing to the Minister's refusal to accept that district councils are best placed to be recognised as the approving body, particularly in relation to major housing developments and sustainable drainage systems connected with them. I fear that we will experience difficulties in implementing the Bill unless the Minister changes his view.
Huw Irranca-Davies: That is, I think, a genuine point of difference. I have explained, although possibly not to the hon. Lady's satisfaction, why we consider it appropriate to ensure that the buck stops at unitary authority level, while allowing those authorities, should they wish and with agreement, to transfer some of their responsibility to lower-tier authorities. That flexibility is there, but I am adamant that the buck should stop at one particular level, in line with the spirit of Pitt.
Miss McIntosh: I think that we shall have to agree to disagree, but like other hon. Members, I want the House to be able to deal with the remaining groups of new clauses and amendments, so I beg to ask leave to withdraw the clause.
'The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure the insurance industry has regard to flood prevention measures in calculating premiums and charges for flood-affected customers based on the principles of equity and shared risk.'.
'(1) The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure that local authorities may cite "flood risk" as grounds for refusal of a planning application in high flood risk areas.
'(1) The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure the insurance industry in consultation with the water industry provides a comprehensive, low-cost and affordable insurance scheme against the risk of flood.
Miss McIntosh: Let me deal first with the Government amendments. I find it difficult to understand the logic of amendments 50, 51 and 52. I do not know why, at such a late stage, amendments 50 and 51-referring respectively to conditions 1 and 2-require loss or disturbance to be the result of a "reasonable" exercise of powers, or why amendment 52 seeks to replace the reference to "a refusal of consent" with
"a decision in connection with"
New clause 10 relates to the resilience of critical infrastructure. New clause 11 relates to the resilience of individual properties, households and businesses. New clause 12 sets out the basis for an annual report from the British Standards Institute, and new clause 13 sets out that there should be an annual report from the climate change adaptation sub-committee. On new clause 13, the first Pitt recommendation was;
"Given the predicted increase in the range of future extremes of weather, the Government should give priority to both adaptation and mitigation in its programmes to help society cope with climate change",
yet we do not see anywhere in the Bill how the Government will monitor adaptation. What prevention measures is the Minister asking interested parties such as the Environment Agency to take to ensure that they meet the adaptation requirement?
I hope that the Minister will look favourably on new clause 13, which relates to new clauses 10 and 12. It is in everyone's interests that property should become more resilient and more resistant to future floods. Surely we should have the opportunity to consider an annual report from the climate change adaptation sub-committee to the Secretary of State, which would include information on the progress made towards implementing each recommendation for adapting to climate change. Will the Minister say whether the Government are minded to do that, what the mechanism will be and why there is no mention of adaptation in the Bill in that regard?
New clause 10 relates to the Secretary of State requiring utility companies to report on the critical infrastructure and their ability to withstand future floods. Again, in the light of the Government's most recent report and some answers in response to written questions, I think that it is fair to say that we have not had the level of reporting on critical infrastructure and the audit that Pitt required. I think that there has been some delay in the Cabinet Office; it may not be DEFRA. However, it would be helpful if the Minister enlightened us as to where we are in that regard.
New clause 11 asks for the resilience of properties, households and businesses to be reviewed annually. The report would include information on any developments with insurance companies on anti-flood measures that would be recognised by reduced premiums and excesses. Is the Minister minded to report to us on whether there has been any movement in that regard?
In new clause 12, we are asking the British Standards Institute to set out an annual report. My understanding is, following discussions with it, that we are not asking it to do anything that it would not be capable of doing. Therefore, I hope that the Minister will agree to support the provision. We would wish to go further. If a kitemark were issued and a product proved not to meet the test of resistance, we would want the Government to allow an action to be taken against that product.
The right hon. Member for Makerfield (Mr. McCartney) has tabled a new clause on low-cost affordable insurance. It is good that we have that discussion. He will obviously not be aware that we have had some debates on those insurance issues, but the provision goes to the heart of the concern that constituents throughout the country may have in that regard.
Martin Horwood: Given the limited time available, I shall speak to new clause 14, which I want to press to a Division. Insurance is a huge issue; an amendment in the name of the right hon. Member for Makerfield (Mr. McCartney) also addresses it. It is of huge public concern, and we did not have time to debate new clauses on it in Committee. It is therefore welcome that we finally have the chance to debate this critical issue.
Let me begin by giving an example of the problem. Mr. and Mrs. Staight from the Park area of my constituency have recently had a pretty bad experience with their insurance company. It is unrelated to flooding, because their property has never flooded. In the floods of 2007, which were likely to take place once in every 100-plus years, they were untouched by flooding. However, as a result of that recent bad experience, they wanted to change their insurance company and discovered that flooding was excluded as a risk simply because of their postcode, despite the fact that their property had never flooded. With a combination of threats, from climate change to the Government's regional spatial strategy putting more and more new housing in countryside areas around the constituency, as well as the risks of increasing and unpredictable bouts of extreme weather of various kinds, it seems wise to extend cover to families such as the Staights. Yet the approach of the insurance industry appears to be to tolerate there being exclusions the moment someone moves insurance
companies. However, that is, of course, outside the remit of the voluntary agreement that the Government have already reached with the industry.
If such exclusions become more common, that will have serious consequences. A quarter of the homes flooded in the great floods of 2007 were not covered by insurance. The average cost of a household flooded was between £23,000 and £30,000. This is clearly very serious for any family, but it is catastrophic for poorer families who cannot remotely afford to pay such sums of money. The average cost per flooded business was even higher-between £75,000 and £112,000. Most businesses are covered for flood risk-about 95 per cent. of the businesses flooded were covered by insurance-but, again, if transfers of insurance lead to flooding exclusions spreading throughout the market, more and more businesses will be excluded and will therefore be liable for these very damaging costs.
Lembit Öpik: While very much agreeing with my hon. Friend's observations, does he agree that the objective of the new clause is not to bankrupt insurance companies, but to ensure that they charge reasonable rates so that the public and small businesses are not bankrupted as a result of circumstances entirely out of their control?
Martin Horwood: Typically, my hon. Friend is absolutely right. It is in the interests of insurance companies themselves to get many of the issues relating to flooding and insurance sorted out. They do not want to insure properties that are at the most extreme risk-those that repeatedly flood and where no provision has been made to defend them against flooding-but we as a society have a common interest in insuring those properties where people have made best efforts to defend them or where flood risk management of the kind we have been discussing throughout the passage of the Bill has been put in place. We also have an interest in not seeing spiralling premiums and very high excess charges, thereby effectively excluding people from flood insurance even when that is formally provided.
Some of these cases of spiralling premiums and very high excess charges even arise when households have spent tens of thousands of pounds on flood defences for their own households. In the case of Mr. Saunders-Pope of Keynshambury road in Cheltenham, the EA has spent tens of thousands of pounds putting flood defences right at the bottom of his garden and those of his neighbours, yet still the insurance company did not see the need-until the local MP intervened-to reflect that in their premiums and excess charges. The insurance industry and the insurance market for flooding are in danger of unravelling gradually over time, and we need to address that. I hope that Conservative Members will support either this new clause or the one tabled by the right hon. Member for Makerfield, because this is a crucial issue.
New clause 15 also addresses a very important issue-planning permission in respect of floodplains and high flood-risk areas-that I would have liked to discuss had we had time to debate things adequately, but I recognise the late hour and the fact that we voted on a similar new clause in Committee. There are clear examples-one occurred only a few days ago in Tuffley, in Gloucester city-of planning permission being given in an area
that regularly floods. In response to the planning inspector's granting of the planning permission appeal, Jackie Hall, the Conservative councillor for Quedgeley and Gloucestershire county council cabinet member, said:
"This is very disappointing and does not address issues raised by residents. We simply cannot go on determining planning cases without updated legislation, which needs to reflect the events of the last few years."
The planning inspector involved commented that the flooding of 2007 was not likely to happen again. That is wildly optimistic, especially given that there were two such flood events in the space of a month in 2007 and another quite serious one subsequently. As I have said, climate change, urbanisation and more extreme weather patterns mean that it is wildly over-optimistic to suggest that these kinds of flood events will not happen again. We need to make it crystal clear that local authorities have the right to refuse planning permission on floodplains or on otherwise defined high flood-risk areas. I could have cited many other examples had I had time to do so, and there are other important issues that we sadly do not have time to discuss, but I wish to give the Minister time to respond on the issue of insurance at least.
Mr. Ian McCartney (Makerfield) (Lab): I thank the Front Benchers for giving me the opportunity to speak. I should tell the Minister that new clause 19 is a probing provision, but in probing I wish to ensure that we make progress on the discussions that I have been trying to have with his Department since October 2008 on this matter.
I have been engaged on issues associated with insurance and flooding since the 1980s, both as a local authority member and subsequently as a Member of Parliament. Over the past decade or more, we have seen catastrophes on a large scale. Although the flooding in my constituency has not been on such a large scale, the result for all the individuals concerned has been a 100 per cent. loss. Nine out of 10 small businesses affected by sewer water flooding never reopen their doors and families are left desperate. Once flooding has occurred, the insurance industry is able, even with the agreement that it has with the Government now, to increase the cost of insurance cover or to refuse to provide any whatsoever. New clause 19 would ensure that the water industry and the insurance industry are brought together within a year of the passing of this Bill-
Huw Irranca-Davies: I think I can do better than that. I applaud my right hon. Friend and others for pushing this issue heavily. I made the commitment in Committee that we would examine it, because we thought that there was a need to review how we provide insurance cover and so on. We shall be writing later this week to invite the following groups to a discussion on flood insurance: the National Flood Forum; the Association of British Insurers; the British Insurance Brokers Association; the Local Government Association; interested MPs; insurance and social inclusion experts from the Treasury, the Department for Communities and Local Government and the Department for Work and Pensions; and any other interested parties. We will, thus, be able to see how we can take this issue forward.
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