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Flood and Water Management Bill

Given the limited time available, I shall speak to new clause 14, which I want to press to a Division. Insurance is a huge issue; an amendment in the name of the right hon. Member for Makerfield (Mr. McCartney) also addresses it. It is of huge public concern, and we did not have time to debate new clauses on it in Committee. It is therefore welcome that we finally have the chance to debate this critical issue. Let me begin by giving an example of the problem. Mr. and Mrs. Staight from the Park area of my constituency have recently had a pretty bad experience with their insurance company. It is unrelated to flooding, because their property has never flooded. In the floods of 2007, which were likely to take place once in every 100-plus years, they were untouched by flooding. However, as a result of that recent bad experience, they wanted to change their insurance company and discovered that flooding was excluded as a risk simply because of their postcode, despite the fact that their property had never flooded. With a combination of threats, from climate change to the Government's regional spatial strategy putting more and more new housing in countryside areas around the constituency, as well as the risks of increasing and unpredictable bouts of extreme weather of various different kinds, it seems wise to extend cover to families such as the Staights. Yet the approach of the insurance industry appears to be to tolerate there being exclusions the moment someone moves insurance companies. However, that is, of course, outside the remit of the voluntary agreement that the Government have already reached with the industry. If such exclusions become more common, that will have serious consequences. A quarter of the homes flooded in the great floods of 2007 were not covered by insurance. The average cost of a household flooded was between £23,000 and £30,000. This is clearly very serious for any family, but it is catastrophic for poorer families who cannot remotely afford to pay such sums of money. The average cost per flooded business was even higher—between £75,000 and £112,000. Most businesses are covered for flood risk—about 95 per cent. of the businesses flooded were covered by insurance—but, again, if transfers of insurance lead to flooding exclusions spreading throughout the market, more and more businesses will be excluded and will therefore be liable for these very damaging costs.