Speaking at a ‘flood forum’ in Westminster, Nick Starling of the Association of British Insurers (ABI) warned that even if a deal between Ministers and the Government was agreed tomorrow, it would not be up and running in time to meet the June deadline.
The previous Labour Government agreed a five-year ‘Statement of Principles’ with the insurance industry in 2008 to ensure people in high-risk areas could still get cover for their homes.
In return for agreeing to increase Government spending on flood defences, Labour obtained a pledge from the industry that it would not refuse cover to homeowners in flood-risk areas.
That agreement expires in June, however, and negotiations between Government and the ABI have been ongoing for the past two years to find a new way forward – without a breakthrough.
“The Statement of Principles will definitely come to an end in the summer,” Mr Starling said. “I think it’s unlikely that if we announced a deal tomorrow, we’d have something in place by then.”
Mr Starling said he hoped a “transitional” agreement might be reached to prevent Britain’s 200,000 flood risk properties having to go without insurance.
“Obviously part of what we discuss has got to deal with whatever happens between the end of June and something being in place,” he said. “The absolute focus at the moment is getting something into place, and then we can deal with any transitional agreements.”
Writing in today’s Yorkshire Post, Shadow Environment Secretary Mary Creagh accuses the Government of complacency.
“The clock is ticking, yet complacent Ministers have sat on their hands for two years,” she writes.