Examination of Witnesses (Questions 160
- 167)
WEDNESDAY 5 MAY 2004
MS JANE
MILNE, MR
PETER DOWER
AND MR
SEBASTIAN CATOVSKY
Q160 Patrick Hall: With regard to
planning authorities being guided or taking into account estimated
present or future flood risk, do you think that the Environment
Agency's advice should be strengthened to the power of veto over
a planning authority?
Ms Milne: No, we think that the
democratic processes should work as intended. What we do think
needs to happen, though, is that the Environment Agency should
be a statutory consultee. At the moment planning authorities are
not obliged to ask the Agency for advice. We think that that is
wrong; they should at least hear the advice. We also want much
greater transparency in the outcome of those decisions and deliberations
so that everybody who is a potential purchaser of the property,
mortgagor of the property, insurer of the property, can make their
decisions in the light of full knowledge.
Q161 Patrick Hall: Do you not think
it is a strange situation we might be in then? If the Environment
Agency, say, was a statutory consultee for structure plans and
becomes so for local and individual decisions but still cannot
direct refusal, you as an industry will effectively direct refusal,
will you not? In terms of the democratic question, that is an
interesting one because, according to your evidence, if the Environment
Agency has objected strongly to a particular development, the
industry will not insure. If the industry declares it is not going
to insure, then surely no developer is going to build because
people are not going to be able to get a mortgage. How is this
to be reconciled?
Ms Milne: It remains down to individuals
how they want to deal with that risk. All we are saying is that
we are not going to provide the risk transfer mechanism; they
can retain the risk, if they wish.
Mr Catovsky: But the industry
as a whole will not . . . We cannot consolidate the decisions
there, ultimately it is up to the companies, but the reason we
say that in the guidance is to make it clear to people that it
will be quite hard to get insurance, or you may be facing very
high premiums. So at least the developers and planning authorities
will recognise the consequence, but, of course, there may be some
niche players who eventually decide to cover it. We obviously
could not say otherwise.
Ms Milne: At the end of the day
getting the structural plans right is the key to all this, because
if the structural plans take this into account then developers
are not going to be looking to the very high flood risk areas
to put their individual applications in. In a way we are working
through a problem at the moment where not all the structural plans
have quite caught up with the better understanding of flood risk
and the consequences of flood risk that we have now.
Mr Catovsky: We were certainly
very happy that the Environment Agency has now started to at least
publish its objections on the internet so that anyone for a particular
month can look at the development plans, at least where they have
objected. You cannot see the decision that was finally taken,
that is up to the individual authority to hold that information,
but at least that starts to make the process more transparent,
and hopefully, if you could extend that transparency right the
way through the process, that would certainly help things.
Mr Dower: But to me, this is the
key area. It is that stage at which you want developers to build
flood risk management into the development plans, and that is
the way you surely must take this forward if you are going to
produce an insurable property at the end of the day which then
fulfils the social requirement.
Q162 Patrick Hall: Do developers
talk to the industry while they have still got an idea maybe not
even on the drawing board? Apart from the looking at the planning
policies for a particular area, does the developer speak to the
insurance industry?
Mr Dower: My company has not been
approached by developers as far as I am aware.
Q163 Chairman: What is the situation,
Mr Dower? I see, as I said at beginning, that you are the Chair
of the Thames Gateway Working Group, and paragraph 24 of your
own evidence tells us that 13 out of 14 zones of change, as they
are described in the Thames Gateway, lie within the Thames tidal
flood plain. So how are you happy sitting on this group when the
wash of tide is heading towards this great piece of development
and you are going to have to decide whether you are going to insure
it or not?
Mr Dower: What we are trying to
do . . . As an industry, I think we have not been proactive in
the past and I think we are now being proactive in order to produce
managed risk in the future. The Thames Gateway is tremendously
important to solve housing for key workers for London and all
of these good things. You are not going to solve anything if the
houses are uninsurable. So far from wanting to say, "Isn't
this terrible. Everybody is building on a flood plain", we
truly believe that you can manage the flood risk and you can design
it into your future development. Really that is why we are consulting
with people to try and make that happen.
Ms Milne: Part of that is how
things are defended, because we are sitting in the flood plain
now.
Q164 Patrick Hall: To sum up that
bit, although none of us can get everything right in the future
by whichever means we approach it, are you saying that, broadly
speaking, if this is approached in the best way we can, the most
coherent way we can, marrying up the Environment Agency's work,
the planning policies, reflecting them and the industry's guidance,
that the industry would honour decisions taken on the basis of
the best system we can devise which we, by implication, have not
yet got?
Ms Milne: We have—
Q165 Patrick Hall: At the moment,
if things are left as they are and there is no change, I think
your paper is saying that there is an increasing risk in certain
places of properties not being insured. If we try to devise a
better system, the industry will honour the outcome of that, even
if, of course, we get some of those things wrong?
Ms Milne: We have all got to make
decisions in the light of the best information that is available
to us at the moment, and we are very keen to work with Government
and with local authorities to arrive at truly sustainable solutions,
which is a very over-used word at the moment, but ones that are
as future-proofed as we can make them, and, of course, yes, we
are all going to get some of those wrong but we will endeavour
to live with that.
Q166 Mr Drew: I was going to ask
you about sewer flooding and so on, but I accept that most of
those are things we have looked at in other ways, and we have
had a Bill, which has now become an Act which has changed that.
If global warning is the threat that it is, to what degree would
you be prepared to look at alternative situations where there
has not been a tradition of sewerage provided? I am a great reed
bed fanatic. If we look at some of the issues to do with sustainable
drainage, with the best will in the world, you are not going to
look at hard technology solutions. I wonder, are you willing,
as the industry, to look at soft technology solutions given that
they may be the only way that you can bring some properties into—what
Mr Wiggin was talking about—insurability? Is that what is
on the agenda?
Mr Catovsky: I think we are certainly
not of the view that it is all about concrete and bricks, and,
I think, if these newer technologies and newer ways of looking
at drainage will look at reducing the risk and be resilient to
the impacts of climate change in the future, then they may be
the most sustainable solution, for sure.
Q167 Mr Drew: Are you having those
discussions with the industry at the moment, not just in terms
of new-build but also conversion?
Mr Catovsky: I do not know if
we have had any specific discussions, but we are certainly involved
with some of . . . There are some research projects and we have
certainly been involved in some of those through the CIRIA research
organisation?
Ms Milne: We have talked to Government
quite at lot on this. What we have found it quite difficult to
do is to engage with the construction industry and with developers
on a lot of these things.
Chairman: Thank you very much indeed.
You have given us an awful lot of food for thought. If, as a result
of our exchanges, there is anything else you want to submit by
way of additional written evidence, please feel free so to do.
Thank you very much indeed for your very comprehensive submission
which helps underpin our questions. Thank you for coming.
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