Hansard

Presiding Officer, thank you very much for your generosity. I will see what I can do.

I very much welcome the fact that the Public Petitions Committee has decided to debate the petition on the floor of the Parliament. As has been pointed out, Professor Crichton’s petition is specifically about ensuring that Scottish interests are represented in the negotiations that are taking place with the insurance industry, but on an afternoon such as this—when there seems to be plenty of time available—many of us will want to take the opportunity to talk at some length about the impact of flooding in Scotland, including its impact on the insurance industry and on insurance premiums.

As is pointed out in the briefing paper for today’s debate, and as Chic Brodie pointed out in his opening remarks,

“Scotland does not face the same degree of flooding as the rest of the UK, due principally to differing topography.”

That is very much the case, but Scotland’s differing topography can also cause some of our most severe problems. I want to talk a little about that before I go on to deal with the broader issues.

I am lucky—if that is the right word—to live very close to the area that was affected by flooding in Stonehaven. Stonehaven has been affected by serious flooding on several occasions, but the first time it was badly affected was on the first Sunday in November 2009. As a result of very heavy rain in the Carron catchment area, the burn rose, it closed the gaps under the bridges and the water spilled out into the streets. Stonehaven had experienced floods before, but that was the first in modern times and was certainly the worst in living memory.

The effects of that flood were quite devastating on a significant number of businesses and homes near the foot of the new town, but particularly in the High Street area of the old town. Those who fought their way back from that disaster to reconstruct their homes and re-establish their businesses also experienced a significant effect on their future insurance premiums, which rose because the flooding risk was defined as greater.

That experience was made rather worse on 23 December 2012, when virtually the same kind of flooding happened again. I know that there are some disputes about how the water may have flowed and how it got to where it was, but we can say simply that, as with the incident three years earlier, the water fell out of the sky and it ended up 4 feet deep on the High Street of the old town.

That second incident had the effect of making some properties and businesses uninsurable. Over the past few days, I have taken the opportunity to speak to several individuals who have some experience of the effect of the flood. One lady told me that the excess on her home insurance for flooding purposes increased from £250 prior to the two flooding incidents to £5,000 today. One business in the old town now has insurance cover with an excess of £25,000. Another business—a garage—simply cannot get insurance to cover it against the effects of flooding. Thus, the on-going impact of flooding can cause specific problems in certain areas such as Stonehaven, which serves to inform us about the issue.

In terms of the petition, my assessment is that there is a problem with the use of cross-subsidy, which is when insurance companies choose to charge a slightly higher premium across the board in order to cover for extreme eventualities. That may be a justifiable principle in many cases—after all, that is what insurance is about—but, as the petition points out, because of the difference in risk we in Scotland may be paying slightly over the odds for our insurance.

Sadly, the problems that the petition seeks to deal with do not include those of people who are already in an extremely difficult position in relation to insurance. That is why I welcome the fact that, in their opening remarks, both the mover of the motion and the minister took the opportunity to broaden out the debate to talk about the nature of risk and the requirement to ensure that risk is reduced.

The people who suffered two floods in a three-year period will, of course, take the view that something should have been done, but I welcome the fact that the current minister, Paul Wheelhouse, was quick to visit Stonehaven after the second flood, which was the first for which he had ministerial responsibility. I welcome the fact that he talked to people when they were still under the pressure of having been flooded only a couple of days before, and that he has continued to take a positive interest. There were delay and procrastination in the three years between the incidents, so it is essential that we do not experience those again, which is why I will continue to call on the minister to use the powers that are at his disposal to encourage progress to be made whenever possible.

What about those who suffered as a result of the increased insurance premiums and who will continue to do so? Whatever solution we find for the problems, it is essential that it delivers affordable insurance even for those who know that they are in at-risk areas. The old town of Stonehaven has a lot of older housing that has been effectively redeveloped and modernised. A number of small businesses in the area have become very resilient because they simply have to cope with recurring incidents. However, if we do not find a solution, the alternative could be that those areas of the town will be largely abandoned—the business will move out and the houses will perhaps remain empty. I do not want that to happen.

When I visited the High Street yesterday, it was full of vans belonging to workmen who were in the houses and business properties that are working to return the town to its former glory, to prepare for the tourist season, which we hope will be successful, and to ensure that everybody gets back into their houses at the earliest opportunity.

In spite of the minister’s little poke about our being better off independent, I will forgive him on this occasion because I believe that he is taking the correct approach. If we do the right thing and follow the right course of action, we can find a way to ensure that insurance is affordable across the board for those who require it and, more important, we can find a way to ensure that those who have been hit by flooding, and in some cases hit again, can get affordable insurance and can continue to plough their course against Scotland’s increasingly inclement elements.