Prime Minister appeals over flood coverInsurers criticise government flood defence cash

11 October 2007

 

A flooded street with houses

Houses damaged by flooding

Gordon Brown has appealed to insurers not to deny cover to people at risk of flooding as he insisted that differences between the government and the industry over spending on defences were 'very small'.

The Prime Minister insisted the government was doing everything it could to improve flood defences.

He was responding to warnings that homeowners in high-risk areas could struggle to get insurance if spending on flood defences does not increase.

Insurers highlight shortfall

The Association of British Insurers (ABI) accused ministers of letting down millions of homeowners and businesses by failing to give enough money to help prevent floods.

The ABI warned that the shortfall in money announced in the latest Comprehensive Spending Review could leave homeowners in areas at risk facing more trouble insuring their properties.

Before this summer's floods, it had already called for the government to spend £2.25 billion on flood defences during the coming three years.

But Chancellor Alistair Darling said spending between 2008/2009 and 2010/2011 would total £2.15 billion.

'Unhelpful'

In the Commons, Labour former home secretary David Blunkett branded the ABI's intervention 'deeply unhelpful'.

'It will lead people to conclude that the industry wishes to remove any commercial risk to their own profits and place that risk instead in the current and future policy holders.'

Mr Brown replied: 'I hope they will not take the step to deny people insurance.'

He added: 'Over the summer period and very recently the ABI have been asking that by 2011 we spend £750 million a year on flood defences.

'The figures we announced are that we have raised flood defences from £600 million this year to £800 million in 2011.

'I hope whatever difference there is between the ABI and us, which is very small on the figures that are involved, we can show ... that we are doing everything we can to improve flood defences in this country.'

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