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Vol. 739 Wednesday No. 37 18 July 2012 PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT ORDER OF BUSINESS Death of a Member: Lord Chilver Announcement Questions Flooding: Insurance Economy: Growth Schools: Children in Care Railways: Electrification Littering from Vehicles Bill [HL] First Reading Five Statutory Instruments Motions to Approve Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2012 Motion to Approve Financial Services Bill Committee (4th Day) NHS: Specialised Services Question for Short Debate Financial Services Bill Committee (4th Day) (Continued) Grand Committee Northern Ireland Act 1998 (Devolution of Policing and Justice Functions) Order 2012 Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment) (England and Wales) Order 2012 Data Protection (Processing of Sensitive Personal Data) Order 2012 Public Bodies (Abolition of Her Majesty’s Inspectorate of Courts Administration and the Public Guardian Board) Order 2012 Public Bodies (Abolition of Crown Court Rule Committee and Magistrates’ Courts Rule Committee) Order 2012 National Minimum Wage (Amendment) Regulations 2012 Community Interest Company (Amendment) Regulations 2012 Tribunals, Courts and Enforcement Act 2007 (Consequential Amendments) Order 2012 Considered in Grand Committee Written Statements Written Answers For column numbers see back page £3·50 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. 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BOUND VOLUMES OF DEBATES are issued periodically during the session. Single copies: Commons, £105; Lords, £40. Standing orders will be accepted. THE INDEX to each Bound Volume of House of Commons Debates is published separately at £9·00 and can be supplied to standing order. All prices are inclusive of postage. © Parliamentary Copyright House of Lords 2012, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey, TW9 4DU; email: [email protected] 223 Death of a Member: Lord Chilver[18 JULY 2012] Flooding: Insurance 224 Baroness Knight of Collingtree: My Lords, will my House of Lords noble friend the Minister bear in mind when dealing with this matter not just the terrible inconvenience of Wednesday, 18 July 2012. having one’s house flooded but the fact that no mortgage can be obtained if insurance is not available? It therefore 3pm becomes almost impossible to sell one’s house if the deal does not go through. Prayers—read by the Lord Bishop of Chester. Lord De Mauley: My Lords, that is a very important Death of a Member: Lord Chilver point. We recognise that there are concerns over the Announcement continued ability of existing and prospective mortgage- holders to find affordable insurance. We are working 3.06 pm with those involved to get a better understanding of what the impact on the mortgage market would be The Lord Speaker (Baroness D’Souza): My Lords, I of increased premiums and how lenders would choose regret to inform the House of the death of the noble to react. Lord, Lord Chilver, on 8 July. On behalf of the House, I extend our condolences to the noble Lord’s family and friends. Lord Gordon of Strathblane: My Lords, surely the answer is to ensure that planning permission is not given for building on the flood plain unless the developer Flooding: Insurance takes precautionary measures to ensure that the area Question cannot be flooded in future? 3.07 pm Lord De Mauley: My Lords, that is also an important Asked By Lord Dubs point, which the Government are fully apprised of. To ask Her Majesty’s Government what discussions Lord Greaves: My Lords, the affordability of insurance they have had with insurance companies to ensure depends partly on the flood risk. I commend the that affordable flood insurance is available for Government and the insurance industry for all the householders in areas considered to be at risk. work that they are doing to find an internal solution within the industry to this, but it also depends on how Lord De Mauley: My Lords, Ministers have met much money the householder has and their resources. with a range of representatives from the insurance Last December, the excellent report published as the industry, including the Association of British Insurers. road map states: Together, we are looking to deliver a new approach “The Government will look at further ways to encourage take that genuinely addresses the availability of flood insurance up of insurance by low-income households, including the potential as well as securing its affordability for the first time. A of insurance-with-rent schemes for social housing”. number of options are being considered that would Are the Government taking this forward seriously, as allow policyholders in high flood-risk areas to continue it is one answer to the problem? Do the Government to secure affordable insurance without having an impact understand that the people really in difficulty when it on bills more generally. comes to insurance are often those in privately rented accommodation? Can insurance-with-rent schemes be Lord Dubs: My Lords, the Minister’s statement is promoted within that sector? welcome but is he aware that, given that thousands of homes have been devastated by floods in recent years, Lord De Mauley: Once again, my Lords, yes is the at present some insurance companies are imposing answer to my noble friend. swingeing increases on premiums in order to deter householders, some of whom have to go to other Lord Campbell-Savours: My Lords, it is not just a companies that then bear all the risk? The insurance question of the availability of insurance. Just as important industry needs to put its house in order. Will the is the question of excess. Will that very important Minister take all that into account in his negotiations component be on the agenda? with the industry? Lord De Mauley: Yes, my Lords. Although this is Lord De Mauley: My Lords, I have first-hand not exactly a declaration of interest I ought to say that experience of that very point. I think that in a number my former home was flooded in 2007, so I have been of cases, premiums have been held relatively steady through the process of claiming on the insurance. We but the excesses have been put up. The noble Lord is recognise that the price of insurance is rising in areas absolutely right. of flood risk and has the potential to become unaffordable for some. This is precisely why the Government, working Lord Elton: My Lords, I understand that the closely with the industry, are considering an internal environment department has a complete set of maps industry levy which would allow policyholders in high of flood risk areas. Will my noble friend suggest that flood-risk areas to secure affordable insurance without the Secretary of State should call in all planning having an impact on bills more generally. applications that fall within those areas? 225 Flooding: Insurance[LORDS] Economy: Growth 226 Lord De Mauley: I will certainly pass that suggestion Lord De Mauley: My Lords, the Government have on. set out a comprehensive strategy to deal with the challenges we face. Fiscal, monetary, financial, tax and structural reform all play a role to deliver our Lord Knight of Weymouth: My Lords, a week last objective of lasting economic recovery and sustainable Saturday the River Wey rose and chose to flow through public finances. That strategy has reduced the deficit the ground floor of my house. I now know the scale of and helped to deliver near record low interest rates. difficulty that this is causing thousands of householders around the country. I take this opportunity to thank not only neighbours but staff in the Environment Lord Roberts of Conwy: I am grateful to my noble Agency and the insurance industry for their support. friend for that reply. I am sure that the entire House These people tell me in conversations that we will be would like to welcome the 65,000 fall in unemployment, lucky to end the summer with ground water at anything which was announced today. Welcome as that news is, other than normal winter levels. Is it not therefore we must face the fact that demand for goods and urgent that before Defra Ministers go on holiday, they services is slackening, if not falling, worldwide. It is must conclude a deal with insurers to incentivise reducing growth prospects in many countries, including householders to invest in flood resilience for householders’ our own. Does my noble friend agree that in these homes to be insurable and for their premiums to be circumstances the best that we can do is concentrate affordable? on those sectors of industry that have full order books, especially of exports, and on the key areas of housing and infrastructure at home where we can be sure of a Lord De Mauley: My Lords, there is a lot in that return in the longer term? Can we get on with it as question.