Chamber
Meeting of the Parliament 07 May 2013
07 May 2013 · S4 · Meeting of the Parliament
Item of business
Flood Insurance Problems
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 urge the Scottish Government to represent Scottish interests in the current discussions between the Department for Environment, Food and Rural Affairs and the United Kingdom insurance industry.
Before I start, I want to wish the convener of the Public Petitions Committee a speedy recovery. I know that he was looking forward to being here today, but unfortunately he is not so good. I hope that he is soon back in the committee.
I want to highlight the growing concerns of many constituents about insurance companies’ hesitancy to provide cover against flood damage to their homes. Thousands of people across Scotland are suffering from decisions by the Association of British Insurers not to renew the statement of principles on flood insurance when the agreement expires in June. As a result of that decision, policyholders in high-risk areas have been left with no assurance that they will be able to secure affordable insurance policies to cover their assets against natural disasters. Failure to reach an agreement will mean that the cost of household insurance for ordinary home owners is likely to rise substantially. That will result in many families being priced out of an insurance policy that would provide protection for the biggest investment in their lives—their home.
This is not an insignificant or isolated issue that affects only a small number of properties that are located around the coast or near large rivers. This is a huge issue for thousands of households throughout Scotland. Four of the five wettest years on record have been since 2000—we have all got the umbrellas and frizzy hair to prove it. The Scottish Environment Protection Agency has recognised that flooding is the greatest natural threat facing the UK and has estimated that approximately 112,000 homes and 14,000 businesses across Scotland are at serious risk of flooding.
One out of every 22 homes and one out of every 14 businesses in Scotland are considered to be at risk from coastal, river or surface flooding. That means that a huge number of homes and businesses throughout the country face dramatic increases in the cost of insurance if a workable solution is not found in the near future, through negotiation between the insurance industry and Government.
I understand that positive steps have been made towards reconciling some of the issues that have been highlighted by the Association of British Insurers and the working procedures of the statutory bodies that are charged with oversight of flooding concerns. Such an agreement has been reached with 29 of the 32 local authorities, meaning that relevant information can be shared through the Scottish flood defence asset database with stakeholders, including insurance bodies, for the task of price setting.
I welcome that development and recognise that much more collaboration is necessary between local authorities, Government and the insurance industry to bring about a resolution that benefits home owners in areas that are most at risk of flooding. I am concerned that the date of extinction of the previous agreement is fast approaching, and I am aware that families and businesses in Scotland would appreciate the certainty that a renewed statement of principles would bring. I urge stakeholders to work together, with urgency, so that we can provide affordable, comprehensive insurance policies for those individuals who are at risk of being unable to afford the most basic cover for their property against the threat of natural disaster.
Before I start, I want to wish the convener of the Public Petitions Committee a speedy recovery. I know that he was looking forward to being here today, but unfortunately he is not so good. I hope that he is soon back in the committee.
I want to highlight the growing concerns of many constituents about insurance companies’ hesitancy to provide cover against flood damage to their homes. Thousands of people across Scotland are suffering from decisions by the Association of British Insurers not to renew the statement of principles on flood insurance when the agreement expires in June. As a result of that decision, policyholders in high-risk areas have been left with no assurance that they will be able to secure affordable insurance policies to cover their assets against natural disasters. Failure to reach an agreement will mean that the cost of household insurance for ordinary home owners is likely to rise substantially. That will result in many families being priced out of an insurance policy that would provide protection for the biggest investment in their lives—their home.
This is not an insignificant or isolated issue that affects only a small number of properties that are located around the coast or near large rivers. This is a huge issue for thousands of households throughout Scotland. Four of the five wettest years on record have been since 2000—we have all got the umbrellas and frizzy hair to prove it. The Scottish Environment Protection Agency has recognised that flooding is the greatest natural threat facing the UK and has estimated that approximately 112,000 homes and 14,000 businesses across Scotland are at serious risk of flooding.
One out of every 22 homes and one out of every 14 businesses in Scotland are considered to be at risk from coastal, river or surface flooding. That means that a huge number of homes and businesses throughout the country face dramatic increases in the cost of insurance if a workable solution is not found in the near future, through negotiation between the insurance industry and Government.
I understand that positive steps have been made towards reconciling some of the issues that have been highlighted by the Association of British Insurers and the working procedures of the statutory bodies that are charged with oversight of flooding concerns. Such an agreement has been reached with 29 of the 32 local authorities, meaning that relevant information can be shared through the Scottish flood defence asset database with stakeholders, including insurance bodies, for the task of price setting.
I welcome that development and recognise that much more collaboration is necessary between local authorities, Government and the insurance industry to bring about a resolution that benefits home owners in areas that are most at risk of flooding. I am concerned that the date of extinction of the previous agreement is fast approaching, and I am aware that families and businesses in Scotland would appreciate the certainty that a renewed statement of principles would bring. I urge stakeholders to work together, with urgency, so that we can provide affordable, comprehensive insurance policies for those individuals who are at risk of being unable to afford the most basic cover for their property against the threat of natural disaster.
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...