Hansard

This has been a timely debate. It has been interesting and helpful to hear members’ views on flood insurance. I thank members for their many insightful contributions; I will pick up on issues that members raised before I make some closing remarks.

Interesting points have been made. Maureen Watt said that new developments can disturb the water table. The issue should be dealt with as part of the planning process, but I will ask my officials to consider whether there is more that we could do to ensure that it is considered at an earlier stage.

Elaine Murray talked about property-level flood protection. The issues in that regard are well known, which is why the Scottish Government will fund further research on property-level protection with a view to ascertaining the best system for individual householders. A one-size-fits-all approach does not work. Flood guards are no good if the water comes up through the floor—I think that it was Alex Johnstone who talked about water coming up through the sewers. As I said, my Hawick office is in a flood area, so I myself have taken property-level prevention measures.

Chic Brodie suggested that the new SEPA flood risk maps have been delayed. The maps were always planned for the end of 2013. I confirm that they are on schedule; we anticipate that they will be ready by the end of this year.

Sarah Boyack talked about the need to quantify the cost of flood protection. I partly addressed the issue in my opening speech. The new flood risk management plans, which will be provided by the end of 2015, and the local flood risk management plans will provide indicative costs of the flood risk management measures that are in the plans, as well as prioritising those measures.

Of course, the 2009 act helps Government and COSLA to judge which applications from local authorities represent the most strategic investments, which need to be prioritised at national level. I reassure Alex Johnstone that Aberdeenshire Council will be treated like any other council when it makes an application, regardless of its capital or current reserves.

John Wilson and other members made important points about insurance for low-income households. The Scottish Government encourages people who rent in the public housing sector to take up insurance-with-rent schemes, where such schemes are available. I recognise that that is not always possible.

I turn to some of the more substantial points that have been raised. A number of members mentioned the flood re scheme, which is the front runner among the options that might be available to the UK Government and ABI. I know that the UK Government wants a scheme that involves some form of pooling. It is possible that legislation will be required if there is agreement on such a scheme across the industry and Government. That would cause the delay that I mentioned in the context of the need for transitional arrangements to cover the gap. I am reasonably optimistic that a solution will come and, having spoken to the UK minister today, I am reassured that the Government is working hard to find a solution.

A number of members raised the subsidy issue. It is worth pointing out that, although an individual household in a high-risk area might be subsidised to the tune of £450, the subsidy across all policyholders is in the relatively modest region of £6 or thereabouts per premium. However, although it does not place a huge burden on individual policyholders, it would be desirable to avoid it if at all possible. Under the flood re scheme, that informal arrangement would essentially be formalised.

Members have highlighted a number of local flooding situations. I reassure the chamber that I will take on board examples of double flooding as in Stonehaven and Comrie, and I will ask my officials to look at those incidents and assess the scale of the impact of double flooding. In response to Annabelle Ewing, I will certainly speak to the ABI about her reasonable suggestion of looking at Comrie as a case study, as it would certainly inform our thinking. On Sarah Boyack’s point about a licensing scheme, we certainly want such a scheme to come forward as soon as possible.

With regard to the points raised by Professor Crichton himself, I am happy to write to the ABI to emphasise the lower flood risk in Scotland and see whether that will have an impact. As for building standards, I note that they already require mitigation for new build but I acknowledge that the main issue is the older buildings that are flooding and what happens thereafter. We feel that the insurance industry is probably best placed to assess individual properties and determine the measures that are required. Introduction of such a requirement in building standards legislation would add a significant burden and it should be relatively simple for the insurance industry to require appropriate resilience work to be carried out as the condition of a claims settlement. Nevertheless, we will continue to look at the issue.

With regard to members’ questions about the Scottish Government’s discussions with the ABI, I point out that we have had positive discussions with Aidan Kerr and have asked the organisation to look at the extent to which individual property-level prevention schemes might be taken into account in setting premiums and ensuring successes. As with neighbourhood watch schemes and, say, the installation of a burglar alarm on a property, such prevention schemes should be taken into account in reducing individuals’ premiums and as a means of encouraging people to take further action. We must also acknowledge the industry-wide problem of some insurance companies cherry picking premiums and deliberately leaving out those at higher risk of flooding, and I hope that any solution will eliminate such a risk.

As I am aware that time is passing, I will move to my closing remarks. The range of this afternoon’s debate has shown the consensus in the chamber for flood insurance to be both available and affordable to those at risk of flooding. The devastating impacts of flooding are bad enough where people have insurance—I have seen that devastation for myself in places such as Stonehaven—but the prospect of families and businesses suffering from flooding and having no insurance cover to help repair and replace their property is appalling.

I am sure that, as the constituency member for Stonehaven, Nigel Don will know that according to the Scottish flood forum’s assessment one in 10 people affected by that flood were not covered by insurance. Since becoming a minister, I have met many people who have endured the recent storms and flooding, and I have seen at first hand the damage and distress that the floods have caused. I have seen communities such as Stonehaven at their best despite nature doing its worst.

In the aftermath of the recent flood in Stonehaven, the Scottish flood forum has, as I have pointed out, advised that 10 per cent of those affected did not have flood cover and that many of those with flood insurance face excesses of between £2,000 and £10,000. In fact, from what Alex Johnstone has said, it sounds as though those excesses might be even higher.

Despite the current public spending constraints, it is clear from the many flooding incidents in 2012 that a long-term programme of work is needed to address flood risk, particularly when the potential impact of climate change is taken into account. We should make no mistake: as members have pointed out, we have a minimum of three or four decades of change in our weather and climate to come.

I assure the chamber that the Scottish Government will continue to work in partnership with SEPA, Scottish Water and local authorities on measures to reduce the risk of flooding from all sources, and I should take a moment to acknowledge the work that SEPA, local authorities and Scottish Water have already done in helping to reduce flood risk in communities across Scotland. Their continued commitment to protecting communities wherever possible is essential and their work makes a real difference.

The Scottish Government has taken a number of steps towards achieving our goal. For example, the Flood Risk Management (Scotland) Act 2009 streamlined the decision-making process for new flood prevention schemes by removing the necessity for central Government approval where there is local consensus. The act also places new duties on all responsible authorities to co-operate and act to reduce overall flood risk. In addition to the flood risk assessment that has already been published, the act requires SEPA to produce new flood risk and hazard maps by the end of 2013—I made that very point to Chic Brodie—and the first national flood risk management plan by the end of 2015.

The flood risk management plan that is under development will set out the national strategy for managing flood risk and the measures to be undertaken. The research that we commissioned in 2012, which I mentioned earlier, made it clear that it is important that the people and businesses in flood risk areas of Scotland—particularly the most vulnerable groups—have access to affordable flood insurance while flood protection measures are being identified and developed.