Chamber
Meeting of the Parliament 07 May 2013
07 May 2013 · S4 · Meeting of the Parliament
Item of business
Flood Insurance Problems
Chic Brodie alluded to that point, which I will come to. There are some clear differences with regard to the risk faced by Scottish householders. The treatment of residential properties is covered by some of the discussions that DEFRA is having. There are also issues about coverage of social enterprises and local businesses and the protection from flooding that they have. Some issues are parallel with those in the rest of the UK, but the main area of difference is the level of risk.
Today’s debate allows us to address what can be done both here and in Whitehall, and I am grateful to the convener of the Public Petitions Committee for raising the issue and to Chic Brodie for bringing the debate to the chamber so that we can air the facts and invite comment from members on the way forward.
I highlight that there are significant differences, as alluded to by Jackson Carlaw, between the level of flood risk in Scotland and that in England, which has a much greater number of properties at risk. According to SEPA’s most recent assessment of flood risk, in Scotland approximately one in 22 properties is at risk, whereas in England the figure is as many as one in six. However, although there are fewer properties at risk in Scotland, in absolute and relative terms the overall impact of flooding on properties is as devastating here as it is elsewhere. Therefore, it is important that any agreement reached with the Association of British Insurers meets the needs of Scottish policyholders.
If Scotland were independent—just to get Jackson Carlaw and Alex Johnstone excited—we would be better placed to negotiate a deal with the ABI that is in Scotland’s best interests. In the meantime, we will have to continue to make representations on the issue to the UK Government in order to achieve the best solution possible for Scotland in the circumstances, recognising that although the ABI regards the Scottish Government as a stakeholder, we do not directly participate in negotiations.
It is clear at this stage of the negotiations and with the imminent expiry of the statement of principles that it will take time to put in place any proposed solution. Transitional arrangements for Scotland will have to be put in place until such time as any proposed solution can be implemented. That is another reason why I have asked Richard Benyon to make sure that Scotland is kept informed of progress on the negotiations. Unfortunately, although I welcome his recent letter in response to my letter, his response still leaves us in the dark as to what those transitional arrangements might be. However, having discussed the issue today with Mr Benyon, I am at least confident that the issue is being treated as a matter of urgency and that a preferred solution is being developed.
As Chic Brodie said, last year we commissioned a piece of work to assess the potential impact of the expiry of the statement of principles, which was undertaken by the University of Dundee. It identified that the groups that are particularly vulnerable to any increase in the cost of flood insurance are people on low income, the elderly and those in local authority or housing association rented properties. Access to affordable insurance is likely to be even more difficult for those groups now that the UK welfare reform changes are being implemented and people are seeing their income squeezed further.
In the meantime, we will continue to invest in flood risk management in Scotland, in order to reduce the risk of flooding as much as possible, which will make it easier for policyholders to get flood insurance cover. In partnership with SEPA, local authorities and Scottish Water, we are working hard to reduce flood risk in Scotland. SEPA identified 243 potentially vulnerable areas in the national flood risk assessment, which highlighted the communities that are most at risk of flooding.
SEPA is developing new flood risk and flood hazard maps that will be published later this year. The maps will build on the initial flood risk assessment and provide all the bodies involved in flood risk management with better information for decision making. The better the information that we have on flood risk, the easier that it will be for insurance companies to ensure that flood insurance premiums more accurately reflect the actual level of risk.
Today’s debate allows us to address what can be done both here and in Whitehall, and I am grateful to the convener of the Public Petitions Committee for raising the issue and to Chic Brodie for bringing the debate to the chamber so that we can air the facts and invite comment from members on the way forward.
I highlight that there are significant differences, as alluded to by Jackson Carlaw, between the level of flood risk in Scotland and that in England, which has a much greater number of properties at risk. According to SEPA’s most recent assessment of flood risk, in Scotland approximately one in 22 properties is at risk, whereas in England the figure is as many as one in six. However, although there are fewer properties at risk in Scotland, in absolute and relative terms the overall impact of flooding on properties is as devastating here as it is elsewhere. Therefore, it is important that any agreement reached with the Association of British Insurers meets the needs of Scottish policyholders.
If Scotland were independent—just to get Jackson Carlaw and Alex Johnstone excited—we would be better placed to negotiate a deal with the ABI that is in Scotland’s best interests. In the meantime, we will have to continue to make representations on the issue to the UK Government in order to achieve the best solution possible for Scotland in the circumstances, recognising that although the ABI regards the Scottish Government as a stakeholder, we do not directly participate in negotiations.
It is clear at this stage of the negotiations and with the imminent expiry of the statement of principles that it will take time to put in place any proposed solution. Transitional arrangements for Scotland will have to be put in place until such time as any proposed solution can be implemented. That is another reason why I have asked Richard Benyon to make sure that Scotland is kept informed of progress on the negotiations. Unfortunately, although I welcome his recent letter in response to my letter, his response still leaves us in the dark as to what those transitional arrangements might be. However, having discussed the issue today with Mr Benyon, I am at least confident that the issue is being treated as a matter of urgency and that a preferred solution is being developed.
As Chic Brodie said, last year we commissioned a piece of work to assess the potential impact of the expiry of the statement of principles, which was undertaken by the University of Dundee. It identified that the groups that are particularly vulnerable to any increase in the cost of flood insurance are people on low income, the elderly and those in local authority or housing association rented properties. Access to affordable insurance is likely to be even more difficult for those groups now that the UK welfare reform changes are being implemented and people are seeing their income squeezed further.
In the meantime, we will continue to invest in flood risk management in Scotland, in order to reduce the risk of flooding as much as possible, which will make it easier for policyholders to get flood insurance cover. In partnership with SEPA, local authorities and Scottish Water, we are working hard to reduce flood risk in Scotland. SEPA identified 243 potentially vulnerable areas in the national flood risk assessment, which highlighted the communities that are most at risk of flooding.
SEPA is developing new flood risk and flood hazard maps that will be published later this year. The maps will build on the initial flood risk assessment and provide all the bodies involved in flood risk management with better information for decision making. The better the information that we have on flood risk, the easier that it will be for insurance companies to ensure that flood insurance premiums more accurately reflect the actual level of risk.
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
The next item of business is a debate on motion S4M-06455, in the name of Chic Brodie, on behalf of the Public Petitions Committee, on petition PE1441, which...
Chic Brodie (South Scotland) (SNP)
SNP
Thank you, Presiding Officer—and I noted your hesitation before you said “14 minutes”.I am pleased to open this debate on the motion in my name on behalf of ...
The Presiding Officer
NPA
I call the Minister for Environment and Climate Change, Paul Wheelhouse, who has a minimum of 10 minutes for his speech. I remind members who wish to take pa...
The Minister for Environment and Climate Change (Paul Wheelhouse)
SNP
The provision and affordability of flood insurance is vitally important to residents and businesses in flood risk areas. Insurance is essential for people to...
Jackson Carlaw (West Scotland) (Con)
Con
I am intrigued that the minister said that he has been able to ensure that Scottish interests are represented. Are there particular Scottish interests that h...
Paul Wheelhouse
SNP
Chic Brodie alluded to that point, which I will come to. There are some clear differences with regard to the risk faced by Scottish householders. The treatme...
Sarah Boyack (Lothian) (Lab)
Lab
At what point will we be able to quantify the cost of the potential options for addressing the priorities in terms of those flood risk areas?
Paul Wheelhouse
SNP
I assume—I hope that there will be a physical nod in my direction if I am right—that Sarah Boyack is referring to the potentially vulnerable areas and the co...
Paul Wheelhouse
SNP
The Flood Risk Management (Scotland) Act 2009 sets out for each potentially vulnerable area an indicative figure of the cost of the schemes. In practice, our...
The Deputy Presiding Officer (John Scott)
Con
I call Claire Baker, who has a very generous eight minutes.14:44
Claire Baker (Mid Scotland and Fife) (Lab)
Lab
I thank Professor David Crichton for submitting the petition on flood insurance, and the Public Petitions Committee for bringing the debate to the chamber.Th...
Paul Wheelhouse
SNP
On transitional arrangements, any solution that the industry proposes might take some years to have its full impact because of the nature of the model that m...
Claire Baker
Lab
I thank the minister for that. I do not know what the intentions of the committee are, but it might be helpful if the minister could respond to the committee...
The Deputy Presiding Officer
Con
Many thanks. To Alex Johnstone I give a very generous seven minutes.14:54
Alex Johnstone (North East Scotland) (Con)
Con
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 dec...
The Deputy Presiding Officer
Con
We move to the open debate. I call Nigel Don, who has a very generous six minutes. You can be loquacious, Mr Don.15:02
Nigel Don (Angus North and Mearns) (SNP)
SNP
Thank you, Presiding Officer. I am grateful for your generosity, and I am sure that my constituents—one of whom is Alex Johnstone—will be, too, because, sadl...
The Deputy Presiding Officer
Con
Take as much time as you like.
Nigel Don
SNP
That is a risky thing to say. Okay.
The Deputy Presiding Officer
Con
Within reason.
Nigel Don
SNP
We talk about once in 75 years, once in 100 years and once in 200 years flood risks. I think that Chic Brodie mentioned once in 75 years flood risks. We will...
Paul Wheelhouse
SNP
I will help to extend the speech a little bit longer.In Brechin, in which I know the member has an interest, in terms of a once in 200 years flood risk, the ...
Nigel Don
SNP
We have gone from the numbers to the solutions, but I absolutely agree. That comes back to my basic point that we are never going to prevent floods; what we ...
Anne McTaggart (Glasgow) (Lab)
Lab
As a member of the Public Petitions Committee, I welcome this debate on Professor David Crichton’s petition, in which he calls on the Scottish Parliament to ...
The Deputy Presiding Officer
Con
I call Maureen Watt. You have a generous six minutes.15:19
Maureen Watt (Aberdeen South and North Kincardine) (SNP)
SNP
Thank you, Presiding Officer.Although I am a substitute member of the Public Petitions Committee, I was not involved in hearing the evidence on the topic. Ho...
The Deputy Presiding Officer
Con
I call Marco Biagi.15:27
Marco Biagi (Edinburgh Central) (SNP)
SNP
Are you still being generous, Presiding Officer?
The Deputy Presiding Officer
Con
Pretty generous, yes. We will use up our time eventually, but at the moment you are fine.
Marco Biagi
SNP
You could easily be mistaken for Father Christmas today.As many members said, two issues are at play. One is Professor Crichton’s direct call, in his petitio...