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Coalition's 'Flood Re' scheme doesn't hold water

Diana Johnson MP's article in the 30 November 2013 edition of the Hull Daily Mail on flood insurance can be read below, or at

As plans for a new flood insurance scheme move forward, Hull North MP Diana Johnson shares her concerns about what it means for households and businesses in Hull


THE 2007 floods in Hull were a once-in-a-250-year event, alth- ough climate change looks like making such volatile weather less rare in the future.

One in five Hull properties flooded, including 7,208 homes and 1,300 businesses. There was one tragic fatality. Many had to live in caravans for months afterwards, while their homes dried out and were refurbished.

Flooding caused misery lasting for months, long after the dehumidifiers and dryers had gone.

Reasonable protection from such an ordeal seems a fair expectation in a modern society, with investment in flood defences and robust planning and building regulations.

Running alongside this has been a campaign to ensure areas prone to flooding, such as Hull, can obtain flood insurance at a reasonable cost and without huge excesses.

This June, the Government announced plans for the future of flood insurance, but I am concerned that they fail to meet the needs of households and businesses in Hull.

It's important to recognise the special geography of Hull, 90 per cent of which is below sea level and vulnerable in the past to flooding from the River Hull and the Humber estuary. In June 2007 the long period of torrential rainfall saw surface water overwhelming the drainage and pumping infrastructure in swathes of Hull.

Back in June last year, the then Secretary of State for the Department for Environment, Food and Rural Affairs (Defra) told me that she was "proud that we have found a way forward with the insurance industry that, above all, guarantees that universal and affordable insurance remains available to all".

This "way forward" then took another year to emerge, as the "Flood Re" scheme, and is still not finalised.

The Government's Flood Re scheme replaces the Statement of Principles, which was first agreed in 2000, renewed in 2008, and ran until this Summer. Under this, the insurance industry agreed to provide insurance in flood risk areas so long as the Government continued to invest in flood defences.

People whose flood insurance was safeguarded by the Statement of Principles would, however, find that they had little choice over which insurance company they could use and, from 2007, even less so. After the 2007 flood premiums and excesses went up for many Hull households.

There are five problems with Flood Re for Hull residents and businesses.

Firstly, small businesses are totally excluded from Flood Re. As if problems such as rising energy costs and business rates aren't bad enough, they'll now face a struggle getting affordable flood insurance.

Secondly, Flood Re is a transitional arrangement. The Government plans to move to a full open market approach after 25 years. If this happened, we would be the only developed country where the state accepted no role in ensuring that flood insurance is available.

Whatever house-builders, businesses and householders did to improve the flood resilience of their properties, I believe that in a free market Hull will be seen as too risky and many will be unable to get flood insurance. This is extremely unfair. Aren't residents and businesses in Hull tax-payers like anyone else? Shouldn't the state protect areas like Hull?

Thirdly, under Flood Re householders could still find themselves paying up to £560 annually for the flood insurance element of house insurance alone. Many in Hull will not regard that as affordable.

Fourthly, in the event of another major flood like Hull's 2007 one, it is unclear whether the scheme would be able to cope. The Government itself admits that there's a 58 per cent chance that Flood Re will fail.

Fifthly, and most importantly, homes completed from January 2009 are excluded from the Flood Re scheme. 444,300 private homes had been built nationally between 2009 and last year. In Hull, for the same period 1,720 private homes were built. All of them will be excluded from the Flood Re scheme.

The Government say that properties built since 2009 should have been built to stricter planning and building regulations, in terms of flood resilience.

Kingswood is a major housing regeneration area for Hull and outline planning permission was first given in 1994 for the area. Like many other parts of the UK, some Kingswood properties were given planning permission before 2009 to the earlier specifications, but any property built since January 1, 2009, will not be covered by the Flood Re scheme. In many areas of the country homes built since 2009 have flooded or caused other properties to flood.

This Government is proposing this retrospective date of 2009 as the cut-off for insurance cover and I think this is unfair to people who bought their properties in good faith between 2009 and now. If there must be a cut-off date, it would be much fairer to set it in the future and I would suggest 2015. When the previous Statement of Principles was first established, the cut-off date for houses not to be covered was set for the future, at least giving people and developers some time to plan.

Earlier this week, when I asked the Secretary of State responsible for housing, Eric Pickles, what discussions he has had within the Government about Flood Re, he seemed unaware of the problem. In the past week, two ministers have told me that the 2009 cut-off date is intended to send "a very clear message" that homes should not be built and sold in flood risk areas – like Kingswood and 90 per cent of Hull.

The Government is currently promoting its "Help to Buy" scheme heavily in Kingswood, helping people to buy new homes. But the same Government has also excluded these same new homes from their Flood Re scheme. In effect, people are being encouraged by some parts of the Government to buy and move into homes that other parts of the Government believe should not have been built!

We've already had the recent Economist article advocating the abandonment of Hull for economic reasons. The subsequent City of Culture 2017 victory provided the perfect answer to that.

Now many parts of the country, not just Hull and the North, could discover how it feels to be abandoned on this important issue, if the Government does not alter course on flood insurance. 

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