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‘No subsidy for floods insurance companies’
THE Government insists it will not give insurance firms a “taxpayer subsidy” to convince them to continue offering cover to homes at risk of flooding despite warnings it is running out of time to agree a new deal.
Environment Minister Richard Benyon insisted there is “urgency” in negotiations with insurers who want more spent on flood defences in return for extending a guarantee that they will offer insurance to flood-risk homes.
The current deal, struck after the floods that devastated parts of Yorkshire in 2007, is due to expire next year and yesterday former Labour environment minister Ben Bradshaw warned homeowners were facing a “double whammy” of cuts to flood defences and uncertainty over insurance.
But Mr Benyon hit back: “Is there urgency about how we progress in our dealings with the insurance industry? Absolutely. Do we want an arrangement moving forward from 20 June 2013 that still ensures that insurance is widely available? Absolutely.
“We will make an announcement in the spring that will give a full year for new systems to be in place, providing clarity and ensuring that insurance is freely available.”
The Association of British Insurers has been critical of Ministers for failing to make more progress in negotiations over an extension of the so-called Statement of Principles.
The existing deal pledged to offer cover in return for a certain level of investment in building flood defences, but the Government recently cut the amount it is planning to spend on defences in the coming years and wants communities to contribute to the costs of schemes.
Mr Benyon said it was “not realistic” for the insurance industry to demand a “taxpayer subsidy” in return for guaranteeing to provide cover, but insisted he would work with the industry to find a solution.
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Saturday 26 May 2012
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