Fallout continues from UK floods

Verbal skirmishes have continued between the Association of British Insurers (ABI) and the UK Government as a result of the £3 billion 2007 summer floods. The insurers have suggested that there could be substantial revisions to their commitment to guarantee flood cover for all but a very small number of domestic properties. This is because the Government has failed to increase spending on flood defences, including drainage, to an amount that the industry considers adequate.

In response to flood defence spending proposals in the Government's comprehensive spending review in October, Stephen Haddrill, the ABI's Director General, said, "Millions of homeowners and businesses around the country have been let down by the Government's failure to commit sufficient money to new and improved flood defences."

Planned Government spending for the next three years was less than the ABI had called for, even before the floods, he said; the extra £200 million pledge will not be available until 2010-2011. The Government, argued the ABI, had "completely failed to grasp the importance of improving Britain's flood defences in the wake of the devastating floods across the United Kingdom."

The Government has defended its position, and former home secretary David Blunkett, whose Sheffield constituency was among areas badly hit by floods in June, described the ABI's comments as unhelpful. In an interview with our sister publication Insurance Times, he also criticised the insurance industry's performance after the floods.

Baroness Young, chief executive of the Environmental Agency, agrees that more Government spending is needed to cope with the effects of climate change. However she annoyed insurers by suggesting they should enforce the agency's planning recommendations by withdrawing cover if local authorities do not and permit development in flood plains.

Haddrill return to his theme In November when speaking at an environmental future conference organised by the Environment Agency. In legislative proposals to combat climate change, the Government had to face up to the consequences of more erratic and dangerous weather, as well as the causes, he said. The summer's floods showed how serious this problem was.