Hansard

I thank Professor David Crichton for submitting the petition on flood insurance, and the Public Petitions Committee for bringing the debate to the chamber.

The petition calls on the Scottish Government to ensure that Scotland’s interests are represented in on-going negotiations on home insurance for flooding, but discussion of the petition has raised many other issues. I know that flooding is a matter of concern to the Rural Affairs, Climate Change and Environment Committee, so I hope that today’s debate will contribute to its considerations.

As MSPs, we have seen increasing instances of flooding in our constituencies and regions. I know about the impact that flooding can have on families and communities because my region has been particularly affected in recent times. Last year a home in Dura Den was severely damaged and up to 30 families had to be evacuated from their homes when the River Eden burst its banks. In December, the Eden also burst its banks between Ladybank and Kingskettle, causing severe flooding for some home owners. Within the region, Perth has been particularly badly hit in recent years, which has caused a great deal of stress to residents. Evidence to the committee highlighted the potential risks to Orkney and Grangemouth, and the potential impact of flooding on the economy and energy supply was also discussed.

The problem of flooding is not reducing in Scotland and we must respond to the challenge as a country, not just as home owners. The response is complex but, as the Stop Climate Chaos Scotland briefing recognises, solutions can be as much about land management as they are about anything else. Flood prevention and management measures must include more use of land and natural ecosystems to store water or to buffer at-risk areas, instead of just relying on carbon-intensive and costly infrastructure that might not be sufficiently flexible for future needs. We discussed that with the minister when we talked about Scotland’s biodiversity strategy.

Today’s debate is particularly about flood insurance for individual households. The flooding of a home is traumatic and the consequences can be devastating. Insurance is therefore vital so that individuals and businesses can give themselves a level of security. Payments need to be affordable and to accurately reflect the level of risk. If they are not, individuals are at risk of leaving themselves and others vulnerable.

The minister will be well aware of the financial pressure that dealing with flooding is placing on the worst-affected local authorities. Under devolution, Scotland has started to face up to the challenge of increased risk of flooding and has undertaken some good long-term planning. However, when the Scottish Government removed ring-fencing of funds for capital projects, Labour expressed concerns that the burden that was being placed on local authorities would be too high. Communities look to their local authority to deal with such problems, but the costs of preventative and restorative action can be considerable, and the burden falls heaviest on particular authorities. Although the Scottish Government has the Bellwin scheme, the scale of the problem now and in the future is in danger of not being matched by investment.

Information sharing by relevant authorities and planners was discussed at the committee, which talked positively about the role of flood liaison and advice groups, and the opportunity that they provide for formal and informal discussion and information sharing. In response, SEPA has said that it thinks that the local advisory groups will replace many of the functions of FLAGs in the long term, and that it will seek to continue to support FLAGs where they remain in operation. However, there is encouragement of participation in the planning system in the local advisory groups.

The committee also discussed resilient building. We discussed the attraction of requiring insurers to adopt a more resilient reinstatement policy to adapting existing building stock after a flood or a storm claim, at no cost to the taxpayer. However, it seems that that would mean higher premiums for householders, and that a requirement would need to be placed on insurers to ensure a level playing field for all insurers.

Home owners are seen to be increasingly vulnerable to the effects of flooding, and that is particularly true of low-income households. Since the statement of principles on the provision of flood insurance in 2008, the Scottish Parliament has passed legislation on flood risk management, in 2009. Part of the statement of principles is about providing information about how to obtain flood insurance and promoting access to insurance for low-income households. The petition was prompted by the fact that the agreement is due to end in July 2013, and the ABI has made it clear that it does not intend to renew the agreement because it believes that it prevents the development of a free market in flood insurance.

In a letter to the committee, the Scottish Government said:

“The Scottish Government wants to ensure that any proposed solution is equitable across the UK, and we have made it clear that there are a number of issues around the proposals for an internal industry levy which we believe will require careful consideration in relation to Scotland.”

The minister said that he had a conversation with Richard Benyon this afternoon. Could the minister use his closing speech to say more about whether the discussions are going well? I am a bit concerned about reference to transitional arrangements, because we are only seven weeks away from the period of change, so I would appreciate more detail on that.