The Earl of Lytton: My Lords, I welcome the opportunity to debate this important point. I declare a professional interest in aspects of planning. The question of planning policy and its co-runner, which it informs,

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development control, raises some important issues on the ground. These need to go beyond the question of new-build developments alone. I do not know whether the noble Lord, Lord Shipley, intended to address just new-build developments but if he did, perhaps I could digress into the area of what we do about some of the existing building stock, which I flagged up at Second Reading. I alluded then to the desirability of making conditions concerning the containing of surface water run-off within existing individual properties, as opposed to just allowing each to discharge it on to the next property downstream.

I wondered whether this might be made retroactive to a degree, perhaps by requiring extensions and alterations to existing properties to incorporate, in appropriate circumstances, a surface water attenuation scheme. I do not believe that this is a general requirement but there are precedents. For instance, if you renew the roof covering of your house, you are often obliged to upgrade the insulation of the roof of your property. There is an analogy there. Surface water attenuation on a per property basis could also be combined not only with water conservation, but with habitat-friendly outcomes. The same thing could apply to the principle of reducing vulnerability of the property itself—a point made earlier by the noble Baroness, Lady Parminter—in connection with quite ordinary adaptations that can be put in place to prevent properties being so severely affected by flooding, should it happen. There is also the question of community-based schemes to protect groups of buildings. I referred to the Lower Don Valley scheme, but there are others.

One of the things that has come out—sorry, that is probably a bad term—or rather, has arisen recently is the question of making foul drainage systems safer, so that if flooding does happen, flood water does not turn into a solution of dilute sewage, adding health hazards to all the other problems of clean-up. That requires special measures, not least because shared sewer pipes that are on private property but are ultimately connected to a public sewer are now the responsibility of the statutory sewage undertaker. I have this terrible feeling that they have no idea of the routes, the condition or the materials of half of these pipes for which they have now inherited responsibility. They have my sympathy in that respect.

The noble Lord, Lord Krebs, referred to building on flood plains. My only point there is that protecting properties so that they are themselves secure against flooding is one thing. Transferring risks to properties elsewhere is self-defeating. My difficulty is that I am not sure that a holistic approach is taken to dealing with the totality of flood plains. Often, these may be in more than one local planning authority area, so there may be problems of co-ordination. With regard to that, the noble Lord, Lord Shipley, referred to the competence and capacity of local government and the noble Baroness, Lady Parminter, referred to reductions in Environment Agency budgets that might affect its ability to have this overarching, integrated view. I worry about that. It is vital that the sort of report that the noble Lord, Lord Shipley, has in mind covers all these aspects. If we start leaving bits out, we shall be no further forward in a few years’ time than we are now.

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I draw attention to the catchment area management plan referred to by the noble Lord, Lord Campbell-Savours. I have some experience of this, not all of it edifying. In at least one instance, I found that half the catchment area concerned, the upstream half, was missing from the plan. The only fact that I could ascertain was that the owner of the missing part was the National Trust. I am unsure what conclusions I should draw from that, but if you have a catchment management plan, the boundary of it has to be drawn along the watershed. No other boundary is possible. The simple arithmetic that was drummed into me, probably from O-level geography onwards, has not escaped me. Making up rules to suit as one goes along will not wash. I am sorry for that terminology as well.

Some time ago, I attended a professional lecture on restoring part of southern Exmoor to a peat bog so that it would hold more water and release it more slowly into the River Barle and the River Exe systems. It had something to do with pumping and repumping water back into Wimbleball reservoir, which I shall not go into. I nicknamed the scheme the “Exmoor sponge”. I do not think anyone else has used that term. There is nothing wrong with such projects, but if they do not have durable management structures that are proof against misuse for commercial objectives, neglect because of spending cuts, simply being forgotten, or participant landowners deciding that there are better land uses that they would rather adopt, they will fail. There need to be more durable ways of dealing with these things. That is the sum total of the points that I wish to make. The last of them probably goes a bit beyond the amendment proposed by the noble Lord, Lord Shipley, but it was worth mentioning in the context of what was said by the noble Lord, Lord Campbell-Savours.

Lord Grantchester (Lab): My Lords, the amendment would set up a review of recent outcomes of planning policy in terms of flood risk for new developments. It has received widespread support around the Committee.

The noble Lord, Lord Moynihan, has already highlighted how the market will change following recent events. In view of the terrible situation that has resulted from recent weather events in Somerset and the Thames Valley, which may well trigger a wide-ranging review of flood risk policy, it makes sense to ask why there has been more building on low-lying and flood risk areas in the past four years, even allowing for the guidance to which the Minister has already referred today. There has been plenty of notice since 2007 that not all property in areas that might be developed would be eligible for flood insurance. Recent floods have highlighted that there may be errors in the guidance. Nor have successful protection measures been achieved.

Why has planning allowed development to take place against a background of increased perception of flooding potential following the floods in 2007 and in 2012? As the Government, the Environment Agency and planning authorities—indeed, the whole country—will be reassessing flood defences and expenditure, a review of where we are now would make eminent sense.

I was struck by the comments of the noble Lord, Lord Shipley, on the cumulative development effect, which would be worth of the attention of the Environment

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Agency. The amendment has also prompted some interesting suggestions from my noble friend Lord Campbell-Savours, so it is worthy of further assessment by the Government.

Baroness Northover (LD): My Lords, we strongly support the intention behind this amendment. The importance of managing the impact of flooding has been brought into very sharp focus recently, and my noble friend has made a cogent case for ensuring that all those involved, whether builders, local councils, inspectors or national organisations, are fulfilling what is required of them in terms of capacity and performance in reducing flood risk.

My noble friends Lord Shipley and Lady Parminter made the case for a review of planning policy delivery. Planning policy for flooding is set out in the National Planning Policy Framework. The framework was published by the Department for Communities and Local Government in March 2012 following extensive public consultation and is supported by practice guidance. It sets strict tests to protect people and property from flooding, which all local councils must follow. We have been very clear that where these tests are not met, new development should not be allowed.

The framework states that councils should plan the location of new development to avoid areas of flood risk where possible. Only if no sites are available in areas of lower risk of flooding can local councils even begin to consider whether to allow development in areas where there is a higher risk. For logical reasons, this is known in planning terminology as the sequential test. Where the sequential test has shown that it is not possible, consistent with wider sustainability objectives, to locate in an area with a lower risk of flooding, then—depending on the flood risk—a second stringent test must be met before a development can go ahead. This is called the exception test, which provides a very strong safeguard. To pass the exception test, you must show that the development provides wider benefits to the community that outweigh the flood risk and that it will be safe for its lifetime without increasing flood risk elsewhere—which was another point that noble Lords flagged up. Where possible, the development will reduce flood risk overall, such as through new flood defences. If there is a risk of flooding, a planning application has to be supported by a site-specific flood risk assessment. This is important because, where there is a risk of flooding, councils should give the go-ahead to new development only where, following the sequential and, if required, the exception tests, it can be demonstrated that what is to be built is flood resilient and resistant, and, as necessary, includes safe access and escape routes. Quite simply, in terms of flood risk, if there are better sites for developments, or developments demonstrated to be necessary are not made safe, they should not be permitted.

5.45 pm

The delivery of planning policy is subject to strict scrutiny. Very importantly, local plans, which allocate land for new development, are tested at a public examination by an independent inspector. Plans must be consistent with national policy in order to be found sound and be based on an up-to-date assessment of

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flood risk—the strategic flood risk assessment. All councils are obliged to have these strategic flood risk assessments.

Under planning law, applications for new development must be determined in accordance with the local plan unless material considerations indicate otherwise. The National Planning Policy Framework would be a material consideration, as would any new information on flooding, such as updated flood maps published by the Environment Agency.

As well as inputting to the preparation of local plans, the Environment Agency is a statutory consultee for applications in flood risk areas, so local councils must consult it. The agency will advise local councils in line with the policy in the framework. We know that local councils pay attention to that advice because the agency both monitors and reports publicly on the planning applications on which it was consulted for detailed flood risk advice and on the impact of its advice. My noble friend noted the number of applications that the Environment Agency sees.

My noble friend Lord Shipley asked whether councils have the expertise to deal with flooding. We have no reason to believe that they do not have sufficient access to the right advice and expertise. The Environment Agency has standing advice on its website for councils to use for lower-risk applications. As I have mentioned, it has a statutory duty to comment on applications where there is a higher flood risk.

As I have mentioned, the Environment Agency is a statutory consultee for both residential and commercial planning applications. It takes a risk-based approach to examining applications. It concentrates on major developments, rather than on applications for individual properties, and on areas at the highest risk of flooding.

I can reassure noble Lords that the most recent agency report, for 2012-13, shows that 99% of proposed new residential units to which the Environment Agency objected on flood risk grounds were decided in line with agency advice where those decisions are known. This proportion has remained very similar over a number of years.

Lord Krebs: In the case of the Environment Agency lodging an objection, in what proportion of cases was it informed of the outcome? In the review that the adaptation sub-committee carried out in 2012, we found that in nearly a third of instances where the Environment Agency had been consulted, it did not know the outcome because it had not been informed. Has that figure changed?

Baroness Northover: I hope to get an inspired answer any second in order to be able to tell the noble Lord. If I do not get inspired, I will write to him.

I remind noble Lords that the Environment Agency is already required, under Section 18 of the Flood and Water Management Act, to report on the delivery of the national flood and coastal erosion risk management strategy for England. These reports must include information on all sources of flood risk and coastal erosion, and cover the work of all of the relevant

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accountable authorities. To reassure the noble Earl, Lord Lytton, the Environment Agency helps to provide the national overview that he seeks.

My noble friend Lord Shipley suggested that we need to know better whether properties built since 2009 are flooding or making others flood. One of the benefits of the memorandum of understanding between the Government and insurers last year, which I will come on to in the next group, is that for the first time we will have access to claims from flooding. This information will be used by the Environment Agency and its equivalents to target flood risk investment and could be used to inform policy development. In this context, I also note what the noble Lord, Lord Krebs, said about his data sets. Clearly, the more information we have, the better. I am sure that those data sets will be of interest both to Defra and to the Environment Agency.

Let me see whether I am inspired by the note I have been handed.

Where the outcome is not known, which is what the noble Lord, Lord Krebs, is talking about, the agency is satisfied that there is no significant difference in the outcomes between those cases reported and those not reported by authorities. I hope that that reassures the noble Lord. It is, of course, important that all these areas continue to be probed, because everybody needs to be reassured that that is, indeed, the case.

Coming back to the assessments that are taking place, high-level reports are produced annually, with more detailed reports provided to coincide with the six-year cycle of the flood risk regulations. Further interim reports may be produced as directed by the Government to support policy decisions such as future government spending reviews. The Government also conduct regular reviews of the effectiveness of policy delivery. For example, a review of the impact of the new partnership approach to flood risk management funding has just concluded. There are also two reviews of flood risk management in progress at the moment and one at a scoping stage. I listened to the comparison by the noble Lord, Lord Campbell-Savours, of the situations in Abingdon and Keswick. My noble friend Lord Younger, who was in his place a moment ago, noted this with interest and passed me a very interesting comment, but I hear what the noble Lord said and I will make sure that his suggestion is fed through to the relevant authorities.

Coming back to the general reviews, in addition to those I mentioned, my right honourable friend Oliver Letwin MP is leading a review of the lessons learned from the recent flooding, particularly the tidal surge, and the other review is looking at the resilience of key infrastructure to major coastal flooding. Both of these are expected to complete in the spring. Defra is also scoping an evaluation of the effectiveness of the Flood and Water Management Act 2010, which I hope will reassure my noble friend and which will initially focus on local flood risk management. Under the Act, lead local flood authorities and other risk management authorities have a duty to co-operate with each other, as he noted, to ensure that constructive and active engagement takes place and helps to build local relationships between relevant authorities within and

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across operational boundaries. We noted what he said about Northumberland and Somerset. Work on this evaluation is anticipated to start later this year. We therefore feel that proposed new paragraphs (b) and (c) of this amendment would duplicate existing planned work.

I hope that my noble friend is reassured by what I have said and that he will be content to withdraw his amendment.

Lord Shipley: My Lords, I am grateful to all those who have taken part in this debate. I shall just take up one question posed by the noble Earl, Lord Lytton, about whether this concerns only new properties. The amendment refers to new developments but, for the avoidance of any doubt, that includes any building post-2009, not any building purely in the future. I am very grateful for the Minister’s reassurances. We have to think further about what she said, in particular about the role of the Environment Agency as a statutory consultee and the extent to which that might be extended, but I think we could look at that again on Report, when we have had time to consider the points raised in greater detail. I beg leave to withdraw the amendment.

Amendment 155A withdrawn.

Amendment 156

Moved by Lord Whitty

156: Clause 51, page 107, line 21, at end insert—

“(8) Prior to making any regulations under subsection (5), the Secretary of State shall require the Committee on Climate Change to provide current and projected estimates of the number of properties that would be eligible for—

(a) inclusion in the Flood Reinsurance Scheme;

(b) the value of levy required under section 53; and

(c) the likelihood of additional levy or contributions being needed from time to time.”

Lord Whitty: My Lords, I shall also speak to Amendment 158. As we have discussed, actuarial calculations for the establishment of Flood Re have had to be pretty robust and tight, reflecting the level of risk assessed by the insurers and by the Government at this time, but we also all know that flood risk will change over time. We cannot, therefore, establish Flood Re on a totally static basis; it needs to be a dynamic process. The reality is that the numbers at high risk of flood damage are likely to increase, particularly, but not solely, because of the effects of climate change. The Committee on Climate Change and its Adaptation Sub-Committee are the key adviser to the Government on the numbers likely to be at risk of flood.

Over the next few years, Flood Re is supposed to operate in an area in which the Committee on Climate Change has already indicated there will be a significant increase in the numbers at significant risk of flood. The definition of “significant” in this context is one in 75 years. At the moment, that relates to about 370,000 properties. The information that Defra put into the basis of the impact assessment derived from the Committee on Climate Change statistics. I am not sure whether it is the database to which the noble

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Lord, Lord Krebs, referred or some other, but given that we are working on a 25-year timescale it said that this figure will have increased by the 2020s to between 475,000 and 825,000 and by the 2030s to between 525,000 and 1 million. That is a pretty big increase. By the end of the 2030s, the end of the 25-year period, it is potentially three times what we are talking about now.

Obviously, some mitigation will happen, but regrettably the level of flood defence expenditure fell—it is now rising again, but it fell—and the figures that have been used in these calculations show that there is a gap between the required expenditure and what is likely to be needed of about £500 million over the period of 20 years. That means that we have a significant problem in defining what is at risk in 10 or 20 years and therefore where Flood Re has to get to in terms of its financial arithmetic and the number of properties that it is going to cover. The Committee on Climate Change can advise on the likely change in crude numbers—indeed, it already has. It can apply probabilities to that, it can indicate what degree of mitigation, at what likely cost, is likely to offset this and it can look at the change in the nature of the risk and the areas to which it applies. It is important that both the Government and the administrator of Flood Re get strong, independent assessments of this changing and growing risk.

Indeed, this goes beyond climate change; there are the interrelationships between climate change, population growth, distribution of population, development pressures, water resource pressures, ecological consequences and so forth. The Committee on Climate Change and the Adaptation Sub-Committee are the authoritative bodies to do that and their role should be written into the Bill. My Amendment 156 does that and Amendment 158 would then require the Secretary of State to take notice of the advice from the Committee on Climate Change when setting targets under Clause 58 and more broadly. I beg to move.

6 pm

Lord Krebs: My Lords, I am grateful to the noble Lord, Lord Whitty, for suggesting an additional task for the Adaptation Sub-Committee of the Committee on Climate Change. While recognising that that is a task that we could carry out, I just say that one important corollary would be that the committee would need access to the relevant data from Flood Re, Defra and the insurance industry. Given access to that information, the committee could, as the noble Lord suggests, provide an independent assessment for the Government, which I think would be helpful in seeing how Flood Re is progressing.

Lord Ashton of Hyde: My Lords, perhaps I may ask the noble Lord whether the requirements should be imposed before the regulations that bring the Flood Re scheme into effect, or whether he is talking only about subsequent regulations. If that task has to be undertaken at the beginning, it might imperil the start of Flood Re.

Baroness Northover: My Lords, I am grateful to the noble Lord, Lord Whitty, for drawing attention to his wish to ensure that that the policies set out in the

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legislation respond to the demands that climate change may bring in future—in particular, by including a formal role for the Committee on Climate Change. I was not entirely sure whether the noble Lord, Lord Krebs, accepted that formal role.

We fully agree that climate change and adaptation to it are vital. The noble Lord, Lord Whitty, added the additional factor of population growth. He rightly challenges us on the uncertainty of the future and we are very much aware of the need to plan for the future in this regard.

The Committee on Climate Change and, in this respect, its Adaptation Sub-Committee play a very important role in providing independent advice to the Government. The information and analysis provided since the committee’s inception have helped to shape the debate on climate change. Although the evidence of climate change is becoming increasingly compelling, it is clear that we need to do more to understand and plan for its impacts. This is a challenging task, given how interrelated and unpredictable those effects are. We have seen how variable the jet stream has been over the past few years, for example, and how it has brought us drought and flood.

Although, clearly, dealing with the current devastating flooding is the immediate absolute priority, we also need to reflect on our management of flood risk and assess our preparedness for climate change. The Government published the UK’s first national adaptation programme report in July 2013, which sets out the action that we propose to take. There is great expertise in this country, not least in your Lordships’ Chamber, which we can access and are accessing, as well as learning lessons from elsewhere.

Specifically in relation to Flood Re, I assure noble Lords that climate change projections were considered alongside other risk factors during the design of the policy and that the effects of climate change will continue to be considered during future levy-setting discussions. I remind your Lordships that in the memorandum of understanding with the industry that has been used to craft the Bill—I mentioned it in relation to a previous group—we have recognised the importance of the programme of flood defence and have committed to a specified amount of expenditure for 2015-16. However, we believe that advising on the scope and financial parameters for the transitional Flood Re scheme is a role for the insurance industry and would be outside the current remit of the Committee on Climate Change.

To clarify, the number of policies that would be eligible for Flood Re is based solely on the cost of the flood risk component of any policy, which is set by the insurers. This assessment of flood risk will indeed change over time, as the noble Lord, Lord Whitty, acknowledged, and it would not be possible for the Committee on Climate Change to provide any estimates without detailed knowledge of industry pricing models. Similarly, the value of the levy required and the likelihood of the need of any additional contribution by insurers is based on a number of financial parameters that could change year on year. Those include the level of premiums received, the cost of reinsurance and the amount of levy collected.

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The Government and the Association of British Insurers have worked hard to determine the value of the levy required and the likelihood of the need for additional contributions, based on industry data and assumptions that were subject to independent review by Professor Stephen Diacon. In addition, extensive modelling, using a model that was quality-assured by the Government Actuary’s Department, has been carried out by the Government using there data, as part of both the pre-consultation and post-consultation impact assessments.

Looking forward, the Environment Agency will continue to collect and analyse data on flood risk, which will feed into the Government’s ongoing assessment of the scheme. In addition, as Flood Re is directly accountable to Parliament, detailed audited information about Flood Re’s ongoing operation will be reported to Parliament regularly.

I turn now to the proposed role of the Committee on Climate Change in advising the Secretary of State on setting the target number in relation to the flood insurance obligation. Clause 58 gives the Secretary of State the power periodically to set a target for the proportion of properties on a register of properties at greater flood risk that relevant insurers are collectively required to issue with insurance policies. The register, to be created by the Environment Agency and its counterparts in the devolved Administrations, will be based on the flood risk maps published by those bodies.

The number of properties indicated as subject to flood risk may change with time, as a consequence of climate change or through better information and mapping. The Secretary of State would set an overall target for the number of registered properties that the industry as a whole needs to cover. In setting this target, the Secretary of State would consider evidence on existing take-up rates of insurance and other relevant data. This could include advice from the Committee on Climate Change, should the Secretary of State wish.

The setting of the target number is a decision regarding the appropriate breadth of support that should be given by this financial support mechanism. Again, we believe that advising on the target number would be outside the committee’s current remit and, for reasons discussed in relation to Flood Re, would not be the most appropriate use of its resources or expertise.

Although, for the reasons that I have set out, we do not feel able to accept these specific amendments, I would like to return for a moment to the wider spirit behind them. We absolutely recognise that climate change is a most important consideration for the management of future flood risk and we value the expertise of the Committee on Climate Change. We are pleased that the independent Adaptation Sub-Committee will be publishing a revised climate change risk assessment report in summer 2016. We will consider that evidence and any implications for flood risk management carefully once the report is received.

Noble Lords know about various measures that we are putting in place to reduce the risks of flooding and coastal erosion, so I will not expand on that right now. I hope that the noble Lord will have been reassured by

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what I have had to say, setting what we are doing here in the context of our deep understanding of the potential implications of climate change and the unpredictability of measuring it into the future. I hope that he will withdraw the amendment.

Lord Whitty: My Lords, I thank the Minister, who clearly recognises the issue. I also thank the noble Lord, Lord Krebs, who, I thought, accepted the additional responsibility—although slightly conditionally. The conditionality was that the financial information, at least in broad terms, would be available to the committee.

I am a bit disappointed by the Minister’s reply. She recognises clearly the importance of climate change in defining the nature and scope of the problem. The Government have an authoritative independent committee available to them to feed into their deliberations, along with the administrator of Flood Re, but she is saying, “Actually, the Minister might or might not take notice of what the Climate Change Committee says, but, in any case, it is not the role of the Climate Change Committee and the Adaptation Sub-Committee to talk about financial risk assessment”. That is not what we are saying, though. To feed in to the risk assessment, you need the most authoritative input that you can get, in order that the financial structure can be changed to reflect those increased risks, changed probabilities or changed distribution of risk. I would have thought that it would be useful to the Government to have it written into the Bill that they have an authoritative input on this from the Committee on Climate Change.

In response to the noble Lord, Lord Ashton, I am not looking for this input before we get Flood Re off the ground. I will be looking for an ongoing input. The administrator of Flood Re, as well as the Government, is going to look increasingly for this kind of authoritative input. At the end of the day Flood Re is—despite its statutory base and its reporting to Parliament—a private body informed by the expertise of the insurance industry, but that expertise is itself informed by the best information that can be got on risk. In my view, the best information that can be got is probably from the noble Lord, Lord Krebs, and the noble Lord, Lord Deben, who is no longer in his place. I would have thought they would be the best and most authoritative sources to be relied on. I am surprised that they are not prepared to get that reflected in the Bill. For the moment, I withdraw my amendment.

Amendment 156 withdrawn.

Clause 51 agreed.

Clauses 52 and 53 agreed.

Clause 54: Scheme administration

Amendments 156A and 156B not moved.

Amendment 156C

Moved by Lord Krebs

156C: Clause 54, page 108, line 25, at end insert—

“(e) the need to build awareness of local flood risk amongst beneficiaries of the FR Scheme,

(f) the need to inform beneficiaries of the FR Scheme of the need to achieve transition to risk-reflective prices as mentioned in paragraph (d).”

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Lord Krebs: My Lords, in speaking to this amendment I will also speak to the other amendments standing in my name. I can be brief because the issues raised in the first of these amendments, and indeed in the second, have already been thoroughly explored by the noble Baroness, Lady Parminter, in her amendment.

Amendments 156C and 156D are really about information for householders. I find it hard to see why one would object to giving householders information that will help them now and in the future. The first part of Amendment 156C simply asks that Flood Re should build awareness among householders of their own flood risk. Earlier this afternoon we heard the noble Lord, Lord Crickhowell, alluding to a Defra website where information could be garnered, but the fact remains, from surveys of householders, that many of them are unaware that they are living in a flood risk area, and Flood Re has been designed to be invisible to the households concerned. As currently cast it will not give them any source of information. It is important that we incorporate in the Bill the requirement for the Flood Re administrator to give households information about their risk.

The other part of this, in the addition of proposed new paragraph (f) at the end of line 25, is to again alert householders who might be affected to the fact that Flood Re is not a permanent arrangement, and that there will be a transition. The transition is over a long period—over 25 years, as we are now familiar with—but it is important that householders over that 25-year period take action if they are at risk, to reduce their risk. Therefore it is important for households to have transparent information about the nature of the transition to risk-reflective prices that will arise at the end of Flood Re. It is hard to object to giving consumers information.

I now move to Amendment 156D, the second of my amendments. Again, I can be brief about this. It requires Flood Re to be explicit about the plan for transition, and to publish a transition plan so that the householder concerned will know what to expect—otherwise there will not be clarity for households. Difficult decisions to gradually withdraw the benefits of the scheme may continually be postponed, because it is always difficult to tell householders that they are going to lose a certain benefit that would arise through the coverage of Flood Re. In order to avoid confusion it is important that the Bill sets out a requirement to give a plan for the future, and therefore prevent Flood Re becoming a permanent and growing burden on the costs of insurance paid by other policyholders. So the transition must take place at the end of the 25-year period, and my Amendment 156D seeks to ensure that a plan for the transition is published, so that we can have more confidence that it will take place, and when it will take place.

6.15 pm

Amendment 156F has again largely been explored in earlier discussions of the amendment of the noble Baroness, Lady Parminter. This is a way of proposing the same thing but in a slightly different form. The discussion, as noble Lords will remember, was whether some of the forecast surplus from Flood Re should be invested in mitigation. This is a form of investment

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now to save costs in the future. With the likely impacts of climate change, uncertain though they are, it is nevertheless likely that the extreme events we have witnessed—for example, in the past couple of months—will become more frequent. We cannot tell by how much and when that will happen. Nevertheless, investment today to help make households more resilient is likely to save costs tomorrow.

My amendment does not specify a pattern of investment, but recognises that there could be surpluses in the early years of Flood Re. It is asking the administrator to encourage and support households to address the resilience of their properties and consider options, including investment in mitigation strategies to make properties more resilient, and to publish a plan for how Flood Re would use its resources to address the underlying risk. This is perhaps a short-term cost to Flood Re, but a long-term saving. It is an “invest to save” amendment.

Finally, I move on to Amendment 156G, which is something that has not been discussed so far. I will explore this in a little more detail. The point of this amendment is to help preserve incentives on insurance companies and households to keep the costs of flood claims down. This is important, because unless claim costs are kept under control, the levy on the bills of other households will need to rise. Under current arrangements insurers have the incentive to get householders back in their homes as soon as possible, because providing people with temporary accommodation costs insurers money. In the future, Flood Re is set to bear all of these costs under the current proposals, leaving no liability with the insurer managing the claim. So what incentive will there be to keep claim costs down and get people home as quickly as possible? A similar lack of insurer “skin in the game” has been blamed by the Competition Commission for a £150 million to £200 million rise in motor insurance premiums. Insurers may not care if home premiums rise if it affects the whole market equally. Auditing of insurer claim costs post-event will be too little, too late, to control costs.

Reinsurance products require an element of risk-sharing between the insurer and reinsurer. This is a sensible precaution by the reinsurer to avoid them being hit with avoidable costs. Risk sharing usually takes the form of a quota-share agreement whereby the insurer agrees to retain a share of all claims, commonly 25%. There is no reason why Flood Re cannot operate in this way, given that it is standard practice in the market.

If we had such an insurance-sharing arrangement, it would have a number of benefits. It would encourage insurers to properly assess flood risk, otherwise they might be tempted to take a simplistic or risk-averse approach and cede more properties to Flood Re than ought to be there, which would mean high-risk householders paying more for their insurance than they should. An element of risk retention will require insurers to assess the risk left with them. Secondly, it would encourage high-risk customers to shop around and get the best deal. In shopping around, they could well find an insurer with a lower risk assessment for their property who was willing to offer a policy below

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the Flood Re cap. Thirdly, risk-sharing would make Flood Re more likely to receive state aid approval, as appropriate risk-sharing is likely to be one of the factors that the European Commission would consider in any investigation.

The amendment would also introduce an element of risk-reflective pricing for households in the Flood Re pool. I acknowledge that this has the downside that those at the highest flood risk may pay somewhat more for their insurance than those who are just within Flood Re’s scope. People will be asked to pay a small risk-reflective element premium in addition to the standard Flood Re cap, but that would reflect the important role in managing claims that householders themselves can play. Householders can take a number of actions to reduce their risk of flooding and the size of any potential claim; we heard about some of those in earlier discussions. For example, we need to encourage people to sign up to flood warnings, to heed them when they are issued and to move valuable possessions and property away from floodwater if they can.

It seems appropriate that high-risk households, along with insurers, should retain a share of the risk in line with their scope to influence the size of potential claims. There could be a concern—a very real one—that this would make insurance policies less affordable, but the thresholds could be adjusted so that the net effect was zero without increasing the size of the levy. People concerned by the risk-reflective element of their bill could shop around to find the insurer with the lowest risk assessment for their property.

The amendment would cement into the heart of Flood Re the important principle of appropriate risk-sharing. The exact proportion of each claim borne by the insurer could be subject to further debate and set in regulations, but at least the amendment would ensure that the debate was had when the time came. I beg to move.

Baroness Parminter: My Lords, I added my name to Amendment 156D of the noble Lord, Lord Krebs, and my related probing Amendment 156E has been grouped with it.

At present, the Bill states that the Secretary of State has the option to bring in a review process for Flood Re, but provides no detail. The first amendment, as the noble Lord pointed out, requires the scheme administrator to publish a plan to achieve a transition to risk-reflective pricing.

My second amendment would require Flood Re to publish the intended framework for reviews, outlining the decisions that needed to be made at each review point. Why is that important? The Government’s consultation document on Flood Re specified that reviews will be held in order that there should be a gradual transition to risk-reflective pricing. Discussions have centred on reviews every five years and the impact assessment for flood risk is based on that hypothesis, but there is nothing in the legislation to confirm that this will be so.

Getting a commitment to a five-yearly review is critical. Flood Re is designed by the Government to expire in 20 to 25 years’ time, with review points where decisions can be taken to reduce the benefit of the pool to claimants and the levy to all policyholders. If a

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linear approach is taken, this might result in a 20% drop in the levy, and the benefits, every five years. The potential problems are that the reviews could be more frequent, or never. The Treasury could require the transition period to be shortened, thus not allowing the necessary flood risk management investment to take place, or it could set the percentage drop in the levy to be higher in the earlier period. The reason why it might do so would be that under OECD rules the levy is considered to be a tax. Removing it early would reduce the percentage tax burden on the state.

The issue, though, is not just when the reviews take place but what information they provide so that the Government and parliamentarians have the necessary information to make informed decisions. As such, it would seem important to define the critical parameters in the review in some detail at the outset, understanding exactly what areas beyond affordability and accessibility will be judged to see whether or not the scheme is effective. I hope therefore that the Minister will put on record the Government’s intentions in this regard so that we can have reassurances that the scheme will achieve the outcomes that we all want.

The Earl of Lytton: My Lords, I particularly welcome Amendment 156C, moved so eloquently by the noble Lord, Lord Krebs, as it enables me to raise a series of allied issues. The first is that, Flood Re or no Flood Re, we are all on notice that the cross-subsidy of flood risk needs to be replaced by individual risk assessments. The reason for that is our better geographical knowledge and the unsustainability of the continued mutualisation of risk in those circumstances. I have absolutely no argument with that.

One issue of concern is the data produced by the Environment Agency. Obviously, those data are very important for the industry and for consultants, but they are equally important for individuals because, if we are moving to individual assessment, we must have some means of identifying the individual impact on a per property basis. I referred earlier today to my discussions with Philip Wilbourn, a very eminent environmental surveyor and valuer from the north of England. He allowed me to circulate an e-mail to a number of noble Lords setting out his views, which I have done, but there is a particular bit that I would like to repeat. He refers to,

“the data published by the various agencies, including the Environment Agency”.

Bear in mind that this is someone who carries out evaluations and does assessments on individual properties or groups of properties for a variety of different purposes.

In his e-mail, Philip Wilbourn says that he cannot use the data for commercial purposes because he is prohibited from doing so. Then he says that there is no online ordering service to acquire data for reporting purposes, and he is forced to acquire it from GroundSure or Landmark, two of the authorised resellers, at what he describes as high cost. He says:

“The data reported by commercial companies often varies depending upon the royalty return”,

which seems to be quite the wrong trigger for objective data. He tells me that the costs cannot be absorbed by residential valuers and that the banks, for which these

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valuations are produced, will not allow such data as a disbursement for the reports that are sent to them. His e-mail continues:

“When data is ordered direct from the EA, it can take three weeks to be sent through depending on the region”,

and he says that he has tested that.

The scale of resolution on the Environment Agency website is 1:5,000, which does not enable a particularly accurate identification on a per property basis. The Scottish Environment Protection Agency’s website fares rather worse because the scale there is 1:25,000, so individual property analysis by the home owner is clearly going to be difficult. These are the data that are supplied to insurers to make decisions.

Of course, what happens? It gets boiled down to a postcode approach—the “postcode lottery” of which we constantly hear many examples. He says:

“The problem with postcodes is that many home owners/businesses may be paying more than they should”,

and he gives an example of a postcode—in I do not know what part of the country, but it is obviously an urban area—which is neatly bisected by a blue-ink line of flood risk.

There is a particular issue here as to whether the data that are produced by this public agency, for public consumption and for the benefit of society as a whole, will be available at reasonable cost—let us not say that it should be free—for the home owner and individual consumer. That is the question that I pose in the context of this amendment.

6.30 pm

Lord Whitty: My Lords, I broadly support most of these amendments, but I have a few queries. I support the first two amendments, Amendments 156C and 156D, unequivocally. It should be part of the role of Flood Re to help raise awareness, both among policyholders and in the community at large, and it will need to do so in conjunction with the Environment Agency, local authorities and so forth. However, clearly, the insurers also have a responsibility, as is reflected in these amendments. This will help both the beneficiaries and the insurers to move to a more systematic, cost-reflective basis for the whole system over time. It is also true that the administrator should be required to produce a plan for the operation of that scheme, as provided for in Amendment 156D. There must also be an overall longer-term plan for transition over the 25 years of the plan, as is proposed by the noble Lord, Lord Krebs, and the noble Baroness, Lady Parminter.

I am less sure that we should stipulate a five-year review period in legislation. In a sense, the scheme is always under review and will be changed in the light of new advice or new experience of flood conditions. Tying this down to every five years may not be the most sensible thing to do. Part of that assessment would be to indicate what measures would be needed to reduce long-term costs, as provided for in Amendment 156F. Insurers may encourage both individual and collective schemes of mitigation. As I have said before, this may involve mitigation by the policyholders, as a condition of that policy, or as a “cream-off” from compensation received in order to renew the policy. The noble Lord referred to Flood Re’s assessment of the need to invest

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in order to save in the longer term. I understand all of that. I am, however, a little worried by the term “subsidising”, which is included in Amendment 156E. I am not sure who is subsidising whom in this context. If the noble Lord means measures such as these, I think that is appropriate, but I would not use that term, as it might suggest a cross-subsidy over and above what is already provided for in the scheme.

Even after the noble Lord’s gallant attempt at explaining Amendment 156G, I do not follow it fully. As I understand it, the objective is to keep the levy cost down for those outside the scheme and the means would be some sort of quota-sharing agreement. I bow to the greater expertise of those involved in the insurance industry to tell me whether that will work. Subject to those queries and my slight lack of comprehension on the last amendment, the noble Lord, Lord Krebs, and the noble Baroness are in the right territory with these amendments.

Lord De Mauley: My Lords, I concur with the noble Lord, Lord Krebs, in Amendment 156C that it is important that householders whose policies are ceded to Flood Re are aware both of the flood risk in their vicinity and of the transitional nature of the scheme. Knowing about flood risk is vital so that households can take simple steps, such as signing up to free flood warnings, as well as investigating longer-term options for managing their flood risk, and can understand the likely impact on their future premiums of the withdrawal of the subsidy from which they are benefiting.

We will work with insurers and Flood Re to support people at flood risk to plan for and adjust to risk-based pricing. I hope that noble Lords will be reassured to know that we have agreed with the ABI that insurers will be required to provide information to customers about their flood risk, Flood Re and the actions that they can take to manage this, both when a property is ceded to Flood Re and at the point of a claim. Of course, raising awareness of flood risk remains primarily a matter for risk management authorities, such as the Environment Agency, so it will be important to ensure that any action by insurers on behalf of Flood Re complements their work.

Turning to Amendment 156D, I understand that by changing the phrasing of the power in Clause 54(3) from “may” to “shall”, the notion that Flood Re is a transitional measure is strengthened. I point to the Government’s stated policy objective in the June 2013 public consultation that,

“there should be a gradual transition towards more risk-reflective prices”,

and to the existing provisions in subsection (2) of the clause, which may require the administrator to have regard to the transitional nature of the scheme in discharging its functions. We have been clear that there should be a gradual transition to more risk-reflective prices and that we are committed to ensuring that the scheme retains incentives for flood risk to be managed. The Government will not designate the scheme until we are satisfied with the industry’s proposals. As I have already said today, the regulations designating the scheme will be subject to public consultation and we are currently considering the recommendation of

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the Delegated Powers Committee that regulations made under this clause should be subject to the affirmative procedure. While I recognise that the shift from a permissive power to a firm expectation could be claimed to underscore Flood Re’s duties in this regard, I believe that there is sufficient clarity in Flood Re’s role to manage the transition to risk-reflective pricing and for that to be achieved through the current drafting of the Bill.

Turning to Amendment 156E, from my noble friend Lady Parminter, I can confirm that it is, as she said, our firm intention that the policy will be reviewed every five years by the Government. This review will assess the level at which the levy and the eligibility thresholds are set to ensure that the policy objectives of Flood Re continue to be delivered, including the transition to risk-reflective pricing. The plan will be a public document and Parliament will be able to use existing powers to call Flood Re’s staff to answer any questions. On the point made by the noble Lord, Lord Whitty, in the case that Flood Re’s finances are out of kilter or the scheme is not operating effectively, that review will be brought forward. We are working with the ABI to define this process. The amount of the levy and the thresholds will be set out in secondary legislation. We intend those instruments to have a review period, always accepting that they might be reviewed early if circumstances require it. In addition, as I have just said, we are taking a power to make Flood Re’s responsible officer directly accountable to Parliament for the scheme’s value for money and for propriety and regularity. There are powers to require Flood Re’s audited accounts to be laid before Parliament and provided to the Comptroller and Auditor-General to examine and compare against Flood Re’s published transition plan.

I now turn to Amendment 156F, which would require the Flood Re scheme administrator to set out how it intends to manage the transition to risk-reflective pricing by investing in flood risk mitigation measures. Actions taken by households, communities, businesses and Government to reduce flood risk are the best and most cost-effective way to secure affordable insurance for households at risk of flooding in the long term, and I recognise the noble Lord’s intention to see this reflected in the Bill. As I said earlier, Flood Re will have a duty to have regard to the need both to act in the public interest and to ensure economy, efficiency and effectiveness in the discharge of its functions. It may well be that the Flood Re administrator decides in due course that investments of the sort that the noble Lord would like to see present an appropriate means of complying with these requirements where there is a clear case for doing so. Nothing in the Bill precludes this. However, we think that it is important for Flood Re to retain flexibility in the way that it discharges its public-interest duty and plans for transition, in order to ensure that it is in a position to balance these requirements against its core obligations as a reinsurer. Accordingly, we do not think that it would be appropriate to mandate Flood Re to subsidise flood risk mitigation measures.

Finally, Amendment 156G would limit the maximum proportion of the cost of a claim that an insurer could reclaim from the Flood Re scheme to a specific amount,

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as part of the Flood Re scheme’s management of transition to risk-reflective pricing. I understand that the intention is that this would restore an element of risk-reflective pricing to insurance policies in Flood Re. This could create a financial incentive for households and insurers to put in place the necessary measures to manage their flood risk. However, price is one, but not the only, signal to households for achieving that and our proposals for ensuring that households have the necessary information to make informed choices about managing their risk should also act to drive resilient behaviours. While superficially attractive, sharing an element of the risk between Flood Re and households would also have the effect of creating a more complex system to administer, thereby adding to the overall costs of the scheme. Having listened to what I have said, I hope that the noble Lord will be prepared to withdraw his amendment.

Lord Krebs: My Lords, I thank the Minister for those comments in response. Above all, my amendments are about trying to put risk communication and management at the heart of Flood Re; we have heard that in relation to previous amendments earlier this afternoon. I am pleased to hear from the Minister that this is indeed the Government’s intention. I look forward with great interest to seeing how that develops through to the next stage of the Bill.

I also thank other noble Lords who have taken part in discussion of these amendments. On the frank feedback of the noble Lord, Lord Whitty, on my lecturing skills, in Oxford we normally do that anonymously. This was non-anonymous feedback on my lecturing skills in explaining risk sharing; I will take that away and consider it for the future. In the mean time, however, I beg leave to withdraw the amendment.

Amendment 156C withdrawn.

Amendments 156D to 156G not moved.

Amendment 157

Moved by Lord De Mauley

157: Clause 54, page 109, line 30, after “persons” insert “, or descriptions of persons,”

Lord De Mauley: My Lords, I take this opportunity to draw noble Lords’ attention to government amendments tabled to Clauses 54, 70, 72 and 80. These are generally minor and technical amendments but I draw your Lordships’ attention to two areas which may be of particular interest.

Amendments 162 and 163 concern the winding up of the Flood Re scheme under Clause 70 and the distribution of any reserves. As part of the operation of the Flood Re scheme it is expected that Flood Re will build up capital reserves. These reserves would contribute to the payment of the scheme liabilities including flood insurance claims for those households whose premiums have been ceded. It is expected that these reserves will be reduced over the life of the scheme and taken into account as part of the five-yearly levy-setting discussions. At the end of the scheme,

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Flood Re will still hold some level of residual capital reserves. Clause 70 allows for an order to be made requiring a specific amount of those reserves to be transferred to the Secretary of State upon closure of the scheme.

These amendments require that, in preparation for closure of the scheme, the Secretary of State must consult the Flood Re scheme administrator in relation to the transfer of any reserves, as defined for these purposes. This consultation must be carried out before an order requiring the transfer of reserves can be made. As drafted, this consultation duty will apply only at the end of the life of the Flood Re scheme and will not extend to any other circumstances. Because of this, I ought to mention that I may need to come forward with a further amendment in relation to reserves on Report.

The other area of interest relates to Clause 72 on internal drainage boards. This clause amends Schedule 3 to the Land Drainage Act 1991 to simplify the process by which internal drainage boards in England may seek to make organisational or structural changes. At the Welsh Government’s request, Amendments 164 and 165 extend Clause 72 to internal drainage boards and internal drainage districts in Wales. This will align the process throughout England and Wales. I beg to move.

Amendment 157 agreed.

Clause 54, as amended, agreed.

Clauses 55 to 57 agreed.

6.45 pm

Clause 58: Target number

Amendment 158 not moved.

Clause 58 agreed.

Clause 59 agreed.

Amendment 159

Moved by Lord Grantchester

159: After Clause 59, insert the following new Clause—

“Flood Reinsurance Scheme: commencement

(1) The Secretary of State may by order (the “commencement order”) appoint a day on which section 51 is to come into force.

(2) An order under subsection (1)—

(a) shall be made by statutory instrument; and

(b) may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.

(3) The Secretary of State may only make an order under subsection (1) if a Flood Reinsurance Scheme national database has been established.

(4) Any Flood Reinsurance Scheme national database must—

(a) be accessible by the public;

(b) outline a property’s risk of flooding; and

(c) indicate if the property is covered by the Flood Reinsurance Scheme.”

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Lord Grantchester: My Lords, the amendment concerns information on the flood reinsurance scheme and would clarify that regulations will be brought forward to set the date of the commencement, and that Parliament will have approved by affirmative procedure the requirements on insurers of the scheme. Most critically, the proposed new clause would ensure that when these important Flood Re provisions come into effect, the database will have been established, as defined in Clause 61, with the relevant information in the right form as specified in subsection (4) of the proposed new clause. Subsection (4) of the proposed new clause says that the database must be accessible to everyone, and must allow them to check whether or not the property with which they are concerned is covered by the Flood Re scheme, and what the risk of the property flooding is.

I know that all noble Lords in the Chamber today share my heartfelt sympathies for those in Somerset and the Thames Valley who have been struggling to deal with these awful floods, and hope that this Flood Re scheme will make sure that people are able to get affordable and accessible insurance in future. The importance of the amendment is that it would provide information to someone buying a property as to whether their prospective purchase is at risk of flooding and, if so, if they will be able to get insurance under the scheme. It does not make sense that a family looking for a house in Somerset, the Thames Valley or elsewhere would be unaware of whether or not it was covered. It would add particular difficulties for them when it came to budgeting for the years ahead. It would be essential information when it came to looking for a mortgage. Lenders will require insurance on property to be able to advance money for the purchase, and will want to know whether or not the costs associated with the property are going to be high and whether insurance is affordable.

The terrible events of recent weeks show how important it is that the public should have confidence that the database is accessible, and that they will be able to access that part of the database to which insurance companies also have access. While the objective of the amendment is to emphasise transparency of and accessibility to information, including mapping, it also highlights the necessity for clarity on flood risk. The Minister may respond that subsection (4)(c) of the proposed new clause is opaque and refers only to property in the scheme. Yet the scheme must manage the situation and a transition over the period of the scheme. There must be a planned and collaborative withdrawal of the Flood Re scheme, and not a precipitate change into market conditions.

At present, it has been expressed that there is a lack of clarity concerning elements of property tenure and the mapping of risk in relation to the scheme, following changes made by the Environment Agency to information and websites in relation to the proposal of the scheme. The Minister has offered today to meet Members of the Committee concerning properties, and the scheme’s treatment of them following repeated flooding occasions. It is vital that the database is accessible as any updating occurs.

Amendment 161A, in the name of the noble Lord, Lord Oxburgh, also seems to me a good idea: it would bring the flood risks of properties further to the

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attention of householders. It is vital that clarity on flood insurance on a database is accessible throughout the period and is made a basic principle of the scheme. I beg to move.

Lord Oxburgh:Amendment 161A scarcely needs any detailed discussion: we have spoken this afternoon on a number of occasions of the importance of getting information to people. Certainly, this was a plea that came to us through many of the verbal representations that we had when we saw various interested groups in the lead-up to the discussion of this Bill. I simply offer this proposal to use council tax demands as a simple and almost cost-free way of disseminating information very widely, reminding people on an annual basis of their vulnerability to flood. It could serve as a portal to the various schemes and proposals that we discussed this afternoon.

Baroness Northover: My Lords, I am grateful to the noble Lords for their amendments. We are certainly supportive of their intentions in tabling them. The provision of information to households at risk of flooding is vital for managing the costs and impacts of flooding. We believe that it is essential that households benefiting from Flood Re should know about Flood Re and actions that they could take, for example, to reduce flood risk, allowing them to plan for the future. This was a key issue in the public consultation on flood insurance; some of the issues in these amendments echo some of the issues raised in earlier groups, which my noble friend Lord De Mauley has addressed.

The noble Lord, Lord Grantchester, rightly emphasised transparency; we certainly agree with that. As my noble friend Lord De Mauley has just pointed out, the Government have agreed with the Association of British Insurers the principle that insurers will be required to provide information to customers, both when a property is ceded to Flood Re and at the point of a claim, highlighting their flood risk. We are also keen to ensure that Flood Re plays its part in managing the transition to risk-reflective pricing, which we discussed earlier. We are continuing to develop with the ABI proposals in this area. We strongly believe that it is equally important that households outside Flood Re are aware of their flood risk, and the Government are committed to making this information available to the public. That is why we already have systems in place, through the Environment Agency and its devolved equivalents, to provide this information.

In England, the Environment Agency already makes comprehensive and searchable flood risk data available on its website. This has enabled people to check their flood risk from rivers and the sea and take action to prepare for flooding. The agency provides the same information for insurers to use. In addition, last December, the Environment Agency published surface water maps for all areas of England on its website and will produce a combined map, showing all sources of flooding, by December 2015. This work further helps improve public understanding of their flood risk and I hope noble Lords will be further reassured by that. While this places the onus on home owners to seek the information themselves, it provides clear information to households, is well established and is actively promoted by the agency.

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The noble Lord, Lord Grantchester, raised the point about people buying properties. Clearly, anybody purchasing a property should check their flood risk by commissioning property surveys and searches or, alternatively, information on surface water risk that has been available in recent years on request from lead local flood authorities. If they conduct those kinds of searches and surveys, then this kind of information should emerge. Clearly, if, having discovered the flood risk, they discuss it with whomever they are buying their property from, the issue of Flood Re would no doubt enter their discussion.

Since June, we have been working with the insurance industry to go even further to improve the data available on flood risk. We have now agreed that the Environment Agency, and its devolved counterparts, will be able to access Flood Re’s data on where the highest-risk households are. This will help the Environment Agency to improve its own mapping of flood risk and will mean that our record levels of flood investment can be targeted at those areas most at risk.

To add to what I have said to the noble Lord, Lord Grantchester, I also point out that the seller is required to fill in a property information form—he will be aware of that—as part of the conveyancing process. This form asks questions about the flood risk history of the property, and if the seller provided misleading information there would be potential for the buyer to seek damages.

Lord Campbell-Savours: Is it not true that under the process to which the Minister refers, a purchaser would not know until lawyers had been involved and were beginning the exchange of documents? My noble friend’s amendment would mean that the buyer would have access to that information in advance. Is that not the distinction or do I have that wrong?

Baroness Northover: The noble Lord will know that a buyer can access the Environment Agency’s maps and see for themselves. When buyers are seeking to buy in a particular area, they usually check out all sorts of aspects: for example, where the schools are and public transport is. It will increasingly become a concern of people seeking to buy a property, given what has happened in recent weeks, to have a look at what the potential flood risk might be. They have access to those maps before they even start down the road of any potential purchase.

Lord Campbell-Savours: Is it possible that some property might be excluded? It might not necessarily show whether a property was actually subject to Flood Re.

Baroness Northover: Does the noble Lord mean a band H property? I would have thought that it would be fairly obvious if it were a band H property. I am happy to write with any further clarification if that would assist him.

Lord Campbell-Savours: Yes.

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Baroness Northover: Advice on obtaining flood insurance is also readily available. The National Flood Forum offers independent advice and guidance on how to go about getting insurance and how to reduce premiums and excesses. Separately, the Government have published a guide that provides advice on how to obtain affordable cover. We recommend that anyone finding it difficult to obtain insurance should talk to a broker and shop around—this was referred to by the noble Lord, Lord Krebs—as this is the best way to make sure that they get the best price for their insurance. There are a range of organisations that can provide help and advice, such as the British Insurance Brokers’ Association and the National Flood Forum. We hope that this reassures noble Lords and that they therefore will be content not to press their amendments. I am happy to write with further details about those people who are seeking to purchase properties.

Lord Oxburgh: Before the Minister sits down, would she care to comment on Amendment 161A?

Baroness Northover: As the noble Lord said, this creates a duty on bodies that issue demands for council tax,

“in an area designated as liable to flooding to include prominently on or with such demands the information that the relevant property lies within a flood risk area and information on where relevant advice on flood insurance may be found”.

I hope that even though I did not make explicit reference to the noble Lord’s amendment, I have laid out for him where the information is already provided, which is why we do not believe that his explicit reference is required. If the noble Lord looks at what I have said and is not reassured by what I have laid out in terms of addressing the substance of what he seeks, maybe we can have further discussions after Committee.

7 pm

Lord Oxburgh: I simply say that there is a big difference between having information available—I readily concede that the Government are doing that with their proposals—and ensuring that people know about it and are reminded of its importance.

Baroness Northover: As I said in my response, we are putting the onus on home owners to seek the information—and I have indicated where that can be acquired—rather than to receive the information, as the noble Lord suggests. I appreciate that this may not be quite as strong as he would wish, but nevertheless there are a number of different sources for this information and a number of ways in which property owners, when they are ceded to Flood Re, will be informed as to their status. If they make a claim they will obviously be informed that that is the case. Therefore there are a number of ways in which they will receive information, even if it is not quite as comprehensive as the noble Lord might wish.

Lord Grantchester: My Lords, I recognise the noble Baroness’s comments in welcoming many of my remarks. She maintains that there is a system in place concerning flood risk data, and I do not for a minute doubt that

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she is correct about that. While I am reassured, nevertheless I am concerned that people should be able to undertake their own research without the cost of expensive searches. My noble friend Lord Campbell-Savours has further argued that case. I suggest that those expensive searches may well occur further along the process of a purchase. Nevertheless, people these days are very much concerned that they are able to undertake easily, quickly and readily their own research. I will consider further what the noble Baroness said, but meanwhile I beg leave to withdraw the amendment.

Amendment 159 withdrawn.

Amendments 160 and 160ZA not moved.

Amendment 160A

Moved by Lord Shipley

160A: After Clause 59, insert the following new Clause—

“Flood reinsurance scheme: eligibility

The FR Scheme should be eligible for all houses built and occupied before its introduction.”

Lord Shipley: My Lords, I said earlier this afternoon that I strongly supported the Flood Re scheme. Again, I thank the Association of British Insurers, individual insurance companies, Defra and Ministers, and congratulate them on their achievement, which is a much needed reform that will give comfort to householders at risk.

However, I want to probe in this amendment the issue of the cut-off date of January 2009 and, in particular, those houses bought before the cut-off at the end of 2008 but not built or occupied until 2009 or after. This amendment uses the date later than 2009, which is simply intended to probe the Government’s intentions. I support a cut-off date—there must be one for the scheme to operate effectively—but the question is whether it must be 1 January 2009 or whether it could be later.

The reason why properties have been excluded from Flood Re from January 2009 is that they were excluded from the 2008 statement of principles. However, I read the Defra briefing, which says that,

“2009 is the most appropriate date based on our current understanding of flood risk”.

Does that imply that the understanding might change because of developments since the statement of principles was established in 2008? This doubt is also important because the proposals in the Bill do not take account of surface water flood risk where information was not publicly available until December 2012, or of changing weather patterns that alter our understanding of what “high risk” is.

The essence of this amendment is: given that houses granted planning permission before 2009 but built afterwards would not covered by Flood Re, there is a case for saying that post-2009 households should be allowed to enter Flood Re where flood risk has genuinely changed since 2009 due to changing weather; where developments are affected by surface water but the risk was not taken into account as it was not understood

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in 2009; or where contracts had been signed before 2009 but the relevant property was not built until 2009 or later. This amendment tries to address those key questions. I very much look forward to hearing the Minister’s reasoning on this in his reply. I beg to move.

The Earl of Lytton: My Lords, we have discussed the substance of Amendment 160B already so I do not propose to move it. However, while I am on my feet, I will comment on Amendment 160A and the terms in which the noble Lord, Lord Shipley, moved it. I received a different narrative on this. The circumstances of the post-2009 cut-off, as explained to me, were that that was the time when Planning Policy Statement 25, in relation to construction on flood risk areas, came into being. As the story went, therefore, everybody was on notice that that was an issue, so that was the cut-off point. However, it occurs to me that the noble Lord, Lord Shipley, has raised rather an interesting issue.

It is fair to say that the end of summer 2008 was when the wheels came off the banking system and, with it, the property development system. If anybody had a planning consent that he was hoping to implement in 2008, he would have found that there was no money or funding to implement it—nothing would be forthcoming. Many of these schemes were put on ice. Indeed, there was a government recommendation—I do not know if you can call it an instruction—to the local planning authorities that they should look favourably on extending the three-year life of these. As I am sure noble Lords are aware, detailed planning consent has a three-year life, so it would have run out and would have had to be reapplied for. Due to the circumstances of having to reapply—maybe there are a new lot of regulations and so on—you can run into a whole raft of cost, time and delay.

The idea was that those things should be perpetuated, and with very good reason. They underpinned balance sheets, loans and all sorts of things. If they were to be effectively prejudiced by the loss of a planning consent, so that you had a property with either no verifiable development value or a lower development value, that had repercussions for precisely the sort of reasons I outlined earlier this afternoon in another context. So it is perfectly possible that a planning consent that was negotiated on the basis of rules in 2006 or 2007 would not have got going by the end of 2008 or 2009, and would have had to be preserved. The houses would not have been constructed until some time later, but the circumstances relating to that consent would have related to the antecedent circumstances at the time of granting of planning consent. I can see that there is an issue here.

I am always a bit frightened by development land values anywhere. I am even more frightened when things go wrong and people start reaching for their lawyers. What are they going to start looking at? Will they say, “The house is now constructed, it was built on what might be called an old technology basis pre-2008, and, lo and behold, it has flooded”? If they are excluded, it may have a material effect on the value. Who will they look to for recompense—the local authority or the fact that Planning Policy Statement 25 did not apply, or should have applied in some other form? This makes me think of the time-honoured

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American superfund arrangements, where most of the money went not to environmental clean-up but into the pockets of lawyers trying to attach liability. I do not wish to see that sort of thing happening here. Some careful thought has to go into the date and where the cut-off should be. I know it is not easy. I am happy to believe that the account of the reasons and circumstances given by the noble Lord, Lord Shipley, is the correct one, but I am slightly surprised that it seems to be a little at variance with the one that I have. I would be very interested to hear what the Minister has to say about this.

Baroness Bakewell of Hardington Mandeville: We have had a good debate on this issue, so I will be brief. I am concerned, like others, at the exclusions from Flood Re. My concerns are that many households may have no idea that their property is in a high-risk area or that they are excluded from Flood Re. Like the noble Earl, Lord Lytton, I am interested to hear from the Minister how many properties were built before 2008 but were not occupied until 2009 or after. The people living in these properties may well get a nasty shock when they realise that they are not able to do anything about it.

My concern with Amendment 160A is that all classes of people, whether they are freeholders, leaseholders or the owner of a commonhold tenancy, should be treated equally. Other noble Lords have covered this area in detail. If properties are on the flood plain, whether they are 200 or five years old and whether they are owned or rented, they should be able to access affordable flood insurance. Anything less is invidious. There will be households where a newly married couple have taken on the leasehold of a property, raised their children, lived in it all their working life and now seek to retire there. When they first took up occupancy of the dwelling, there would have been no hint of it ever flooding. However, with changes in the jetstream and continuous and persistent rainfall year on year, they now find that they and their neighbours are suffering from flooding. Are these residents now to be excluded from Flood Re? The Bill is not clear on who the person with the “qualifying interest” is. Will the Minister clarify this situation?

7.15 pm

Earl Cathcart: My Lords, I will speak to Amendment 160A. I will be interested to hear the Minister’s response to the question asked by the noble Lord, Lord Shipley, but I shall speak to the amendment as it is written. The Flood Re scheme should be eligible for all houses built and occupied before its introduction.

We live in a blame society. Even now, the media are trying to pin the blame for the current flooding on someone. Is the worst rainfall for 200 or 300 years the fault of the Government, the Environment Agency or local government? It must be somebody’s fault.

With Amendment 160A, we are debating whether houses built after 1 January 2009 should be included in the Flood Re scheme. As was said earlier, PPS25 has made it quite clear that development should not take place in flood risk areas, and yet we all know that it still goes on. One has to ask why. Who is responsible for the houses built on flood risk areas when the rules

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are quite clear? Everyone is trying to pass the blame on to someone else—“It’s not my fault, guv”. Who is at fault? Is it the Government for not ensuring stricter adherence to


? Is it the Environment Agency? That may be the case. Although 97% of applications that it objects to are refused, it looks at only 6.6% of the 450,000 applications, which is quite clearly not enough.

Is it the fault of local government planners? That is probably the case. One has to ask why they continue to pass applications on flood risk areas contrary to PPS25. Is it the fault of the owner for buying a home built after 1 January 2009 on a flood risk area? It probably is. Caveat emptor, or let the buyer beware: he should have known. If he did not, is it the fault of his conveyance lawyer when carrying out the searches? It raises the question of whether lawyers should be required, as a matter of course, to inform buyers if the house is on a flood risk area and, in this case, when it was built.

One can lay the blame on homes being built on flood-prone areas on any or all of the above but, as sure as eggs are eggs, it is not the fault of the insurance industry. Why should insurers pick up the tab? They have been quite clear on this. Indeed, they are the only ones who have drawn a line by saying that, if a home is built in a flood risk zone after 1 January 2009, under the statement of principles, flood cover will not be available and the property will not be eligible for the Flood Re scheme. Underwriters were quite clear that they did not want to encourage unwise and irresponsible development. Why should underwriters or contributors to the scheme pay for other people’s stupidity? The Government must decide whether PPS25 is to be adhered to or not.

Lord Campbell-Savours: My Lords, there is an element of confusion both outside and inside this House as to where the words which define the exclusion of leaseholders are to be found. I understand that Defra put out a notice in which it excluded leaseholders, but can the Minister tell us where this provision is made? The public are confused. The assumption when anyone reads this Bill that freeholders are included will be interpreted by flat-owners who have purchased their freehold but manage their blocks through leasehold companies—companies which have been established to manage the freehold, owned by the residents who have 999-year leases—to mean that they are also included. They will assume that because they are freeholders they are included. My understanding from my reading, although, as I say, I have not found the authoritative piece of literature, is that they are not included. In other words, people out there who believe they are included—freeholders of blocks of flats; not corporate interests but individual share-of-freehold owners—will think that they are included when they are not. That needs to be sorted out.

I cannot understand why they are excluded. Indeed, I would argue that they are probably less of a risk to insurance companies, even though they may well live in buildings on flood plains, because very often you find blocks of flats where no one is living on the bottom floor at all and the first flat in the block is on the first floor, above the area at risk of being flooded. If I am correct in what I am saying, will the Minister

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tell us why share-of-freehold owners in blocks of flats are being excluded when, in fact, they are freeholders and when, as I say, people reading the Bill will presume that they are included?

Lord Whitty: My Lords, I think my noble friend Lord Campbell-Savours is going back to a point that I raised earlier—namely, that the Flood Re parts of the Bill may have been produced relatively late in the Commons. However, the dividing line between what is included in terms of property and what is not is not as clear as it should be. My noble friend has just identified a group for whom this issue is particularly confusing, but in any case the distinction is not in the text of the Bill. As I said earlier, there is slight confusion about the various bits of paper that Defra has produced on this matter, so we need clarity one way or the other as to which groups are included and which are not. We have heard various bits of clarification from the Minister today. I think that most of those should end up in the Bill before we finalise it and I look to the Government to come forward with amendments on Report or at Third Reading to make sure that the position is clear.

I am afraid that I confused the amendment of the noble Lord, Lord Shipley, in this group with an amendment in an earlier group and commented on it earlier. However, whereas I have great sympathy with a lot of the other excluded groups, I have virtually none with those who built on and developed land in high-risk areas after 2009 because it was already clear from the previous agreement between the Government and the ABI that new insurance would not be given for those developments. Like the noble Earl, Lord Cathcart, I do not think we should give those people leeway retrospectively. If we shift the deadline now, somebody will argue for a deadline at a later stage to allow yet more development in inappropriate places, and that will skew the insurance figures and the whole calculation behind Flood Re. Therefore, I do not support the noble Lord on this occasion.

Lord De Mauley: My Lords, my noble friend’s Amendment 160A seeks to make all houses built and occupied before its introduction eligible for Flood Re. This amendment would move the cut-off date for inclusion of properties in the scheme to the start of Flood Re, rather than from 2009, and would also bring band H households in scope of the scheme.

I apologise to noble Lords as I suspect that I may be repeating what I said earlier today and, indeed, we may repeat it yet again later. First, I reiterate why we intend that properties built before 1 January 2009 and those in council tax band H and the equivalents would not be eligible for the scheme. However, before I do that, I shall respond to my noble friend Lord Shipley and a number of other noble Lords who asked what state the property must have been in at 1 January 2009 in order to qualify. It must have been in possession of a council tax band, which would imply that it was habitable at that date. I hope that is helpful.

The 2009 cut-off date recognises that new housing development should be located to avoid flood risk, or where development in a flood risk area is necessary, it

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should be designed to be safe, appropriately resilient to flooding and not increase flood risk elsewhere, in line with the national planning policies in place. This date therefore reflects the fact that homes built since 2009 should already be insurable at affordable prices. As the noble Lord, Lord Whitty, said, that marker has been in operation for several years, and it has been maintained under the Flood Re proposals.

The noble Lord, Lord Shipley, asked about surface water mapping. The new mapping has shown that the total number of properties affected by surface water flooding is lower than previously thought.

Band H properties are not included in the scheme because, as I explained in some detail earlier today, Flood Re is designed to target support to those who need it most.

The noble Lord, Lord Campbell-Savours, raised the issue of leasehold properties. As we have discussed, commercial policies are out of scope of Flood Re, which is designed to support households. We believe that this approach is fair and practical, and it was supported in the public consultation. However, the leasehold sector presents a more complex situation, where the contents policy is classified as domestic, but a buildings policy could be classified as either commercial or domestic and could cover multiple dwellings. As I said, I recognise the strength of feeling on this issue, particularly in light of the ongoing extreme weather conditions, and I feel we need to take time to consider it in more detail, although, without evidence of market failure, it would be difficult to justify action. However, we will examine the evidence further with the ABI and I hope to provide an update on Report.

Lord Campbell-Savours: Will the Minister comment on the issue of share of freehold?

Lord De Mauley: If I may, I will include that in that consideration. I hope that my explanations have provided some helpful reassurance. I am happy to ask my officials to work with the ABI to set out the proposed scope of Flood Re in more detail before Report, as that is something noble Lords have asked for. On that basis, I ask my noble friend to withdraw the amendment.

Lord Shipley: My Lords, I thank the Minister for his helpful reply. A Written Statement would also be helpful as we move towards Report. I should like to pursue two points briefly. I say to the noble Earl, Lord Lytton, that there is more than one narrative but the outcome is the same. The issue is whether the understanding of flood risk that was apparently correct in 2008 and 2009 is still correct in 2014. I suspect that it is not, which is why I am concerned. It would be helpful if the Minister’s note that he will send before Report could inform us whether it is still correct.

The noble Lord, Lord Whitty, said that we should not include in the provision those who had continued to build on high-risk flood plains after 2009. I entirely agree with him, but that was not the point I was making. My point was slightly different—namely, that I think the definition of what is high risk is now changing around us. Therefore, people who bought in good faith properties which were not in a high-risk

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area may now find that they are living in a high-risk area as a consequence of climate change, changing weather patterns and so on.

We have had an interesting debate. The issues have been identified and we can consider them further prior to Report. Therefore, I beg leave to withdraw the amendment.

Amendment 160B (to Amendment 160A) not moved.

Amendment 160A withdrawn.

Clause 60 agreed.

Clause 61: Register of premises subject to greater flood risk

Amendment 160C not moved.

Clause 61 agreed.

Clauses 62 and 63 agreed.

Amendment 161 not moved.

Clauses 64 to 68 agreed.

House resumed. Committee to begin again not before 8.29 pm.

Chilcot Inquiry

Question for Short Debate

7.30 pm

Asked by Lord Morris of Aberavon

To ask Her Majesty’s Government what are the reasons for the delay in the completion of the Chilcot Inquiry.

Lord Morris of Aberavon (Lab): My Lords, I welcome the opportunity to debate the reasons for the delay in the completion of the Chilcot report. I will confine myself to some specific questions. Despite repeated requests over the years, I have never commented on the legality of the Iraq war. My duties as Attorney-General during the Kosovo war were difficult enough and many law officers have decisions to make concerning international law which are not easy. My only comments were in my recently published memoirs in which I said:

“The equivocation of the French before the Iraq war is not an argument for the failure to try for a further sustained effort”,

in the Security Council. I added:

“Or was the die already cast? The Chilcot inquiry may tell us”.

My interest in public inquiries goes back a long time. Cabinet Office records show that my name was suggested for the Franks inquiry into the Falklands War. In the event, more experienced colleagues were chosen. The Franks inquiry took six and a half months in all. The Chilcot inquiry was set up in June 2009. Its final public hearings were in February 2011 and we were told that it would deliver its report as soon as possible. In 2009, Mr Gordon Brown told Parliament:

“No British document … will be beyond the scope of the inquiry”,

and that the final report,

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“will be able to disclose all but the most sensitive information—that is, all information except that which is essential to our national security”.

As a former Attorney-General, I fully understand those considerations. It is how they are interpreted that matters and whether the correct judgment is made in balancing. Mr Brown added:

“I have accepted the Cabinet Secretary’s advice that the Franks inquiry is the best precedent”.—[Official Report, Commons, 15/6/09; col. 23.]

In the difficulties about publishing Chilcot, has there been any departure from that precedent?

At that time, Mr Cameron made a number of challenges. He said that the Franks committee reported in just six months and suggested that, because of the longer period for Chilcot, people would conclude that the inquiry had been fixed to tide the Government over until after the election. A year seemed too long for Mr Cameron in 2009. Unless progress is made, it will be more than four and a half years in the case of Chilcot.

On 7 November, the Daily Telegraph reported:

“The Cabinet Office is resisting requests to make public ‘more than 130 records of conversations’ between either Mr Brown or Tony Blair … and Mr Bush … There is also a wrangle about making public ‘25 Notes from Mr Blair to President Bush’ and some ‘200 Cabinet-level discussions’”.

First, who is responsible for the delay? Secondly, what precisely are the reasons for it?

Public inquiries are set up to deal with public disquiet, to establish facts and to learn lessons. Not to publish is to undermine the whole object. Delay is unjust and justice to the public is denied. In January, in a Written Answer, Francis Maude said that,

“the completion of its report is a matter for the Inquiry Committee”.—[

Official Report

, Commons, 6/1/14; col. 1W.]

Later in the month, he said:

“The Iraq Inquiry has been provided with all of the documents it has requested”.—[Official Report, Commons, 20/1/14; col. 32W.]

Your Lordships may consider, from the very tight drafting of both answers, that they are less than frank.

In December, the noble Lord, Lord Hill, said that the Prime Minister had been updated by Sir John Chilcot, who had,

“reported that continuing discussions over certain classified documents had caused a delay to the Maxwellisation process, and hence publication of the report”.—[

Official Report

, 12/12/13; col. WA 139.]

That was much more transparent. Maxwellisation is the name for the way the common law has developed of providing a person who is criticised in a report with an opportunity to comment. It is nothing more than fairness. If you cannot resolve what should be in the contents of a report, both the inquiry and the criticised are in an intolerable situation. Following freedom of information requests, the Information Commissioner ruled in favour of disclosing the minutes of two Cabinet meetings in 2003 prior to and concerning military action in Iraq. The Cabinet Office—would you believe it?—had curiously argued that the public interest in favour of disclosure diminished with the passage of time. That is risible. It is the original long-grass argument.

The commissioner considered that there was a presumption running through the Freedom of Information Act that openness in itself is to be regarded

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as something which is in the public interest. The commissioner concluded that, in line with recent legal authority, material which,

“can provide a better understanding of how the decision to go to war was made is subject to an exceptionally strong public interest in disclosure”.

The Library has failed to find any record of an appeal and I am particularly grateful for its help.

On 31 July 2012, the commissioner said that he was disappointed that a ministerial veto, as allowed by the Freedom of Information Act, had been used to override his recent decision on the two Cabinet meetings to which I have referred. Why was the route of a ministerial veto followed rather than an appeal to the court as in the recent case of Plowden—or were the Government, in whatever manifestation, afraid of another adverse finding? Perhaps I may remind the House of the background statement of the policy of the Freedom of Information Act. It states:

“The Government considers that the veto should only be used in exceptional circumstances and only following a collective decision of the Cabinet”.

Has that policy been changed by this Government? Was the Cabinet consulted? If not, who took the decision? Was it the Prime Minister or the Cabinet Secretary?

I surmise that each and every word of Prime Minister Brown’s statement announcing the Chilcot inquiry had the blessing of the then Cabinet Secretary—if indeed he did not draft it. The crucial question is: how much wider is the veto now being used than the actual words used by Mr Brown, to which I have already referred, that restrictions in publication would be limited to that which was essential to national security?

A blanket refusal to disclose Cabinet discussions, especially having regard to the commissioner’s carefully considered and balanced ruling of the need to publish, seems miles wider than Mr Brown’s promise to Parliament. Will the noble Lord give a categorical answer to my question: Has Mr Brown’s promise to Parliament been breached, either in form or in spirit? Parliament was deceived at the time of Suez. It would be most unsatisfactory if any similar allegation over Iraq were not cleared up in this independent inquiry, which Mr Brown promised,

“will receive the full co-operation of the Government”.—[

Official Report

, Commons, 15/6/09; col. 23.]

7.40 pm

Lord Anderson of Swansea (Lab): My Lords, I am pleased to follow my noble and learned friend and to adopt many of his questions. First, I shall reflect on the precise question in the Motion and then consider whether the inquiry is likely to be judged worth while.

Perhaps the first question can be answered briefly. It is largely contained in Sir John Chilcot’s letters to the Prime Minister of 15 July and 14 November last year. Apparently, only in June last year did the inquiry request that certain documents should be published to give evidential backing to its conclusions. I make two observations on that. First, why was the request made so late in the day? Secondly, surely it was unrealistic of the inquiry to believe that Cabinet Office documents

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and confidential exchanges between heads of state could be published. By sticking to such a principle, the inquiry ensured further delay for a process that began in June 2009 and was expected by some at the time to last but for a year. The


of 29 December last claimed that a compromise agreement had been reached between Sir John and the Cabinet Secretary that extracts could be published in a redacted form. I pose this question to the Minister: is that so? Was not such a deal in effect inevitable from the start?

Many doubts remain as to whether the length and expense of the inquiry have been worth while. My noble and learned friend referred to the Saville inquiry into Bloody Sunday. However long and expensive that inquiry was, it had the merit of having a cathartic effect on divisions within Ulster. Perhaps the Chilcot inquiry was necessary because of pressures at the time, but many key questions have already been answered. Certainly, every conceivable question was asked of Tony Blair, the Prime Minister at the time. For some the motive was a sort of personal vendetta against Tony Blair—let us remember “Blair liar” and “Blair war criminal”—but they are likely to be disappointed.

I personally had the privilege of an important vantage point. Between 1997 and 2005 I chaired the Foreign Affairs Committee of the other place. I gave evidence to the Hutton inquiry and I visited key figures in the Washington establishment at least twice a year over the period between 1998 and 2005. I had one-to-one meetings with the Prime Minister, Tony Blair, and Sir Richard Dearlove. As a result, I am wholly convinced that Tony Blair acted with total integrity and relayed to Parliament and the public the advice that both he and, indeed, I too had received. There may be criticisms that he did not ask sufficiently searching questions of the intelligence services about their sources. Certainly the US Administration relied excessively on exiles and partisan sources such as Mr Chalabi and the Iraqi taxi driver, Mr Rafid al-Janabi. There was much suspicion that the US Administration was seeking revenge on Iraq for 9/11.

The Prime Minister at the time may be criticised for being insufficiently independent of the United States and having a rather starry-eyed view of President Bush and the special relationship, but again, for example, at Crawford in March 2002 he told the President that he would support military action not come what may, but provided,

“that certain conditions were met”.

He did ensure that the United States took the UN path until thwarted by Monsieur de Villepin and contrary to the neo-cons’ view in Washington. Equally, he avoided the isolation of the US, and in my judgment both of those were the objectives. The inquiry is unlikely to find a smoking gun and it has said in terms that it will not apportion blame.

What about the breaches of international law to which my noble and learned friend alluded? Even if in retrospect we recognise that there was greater weight against intervention among those international lawyers who opposed the intervention, there were respected lawyers on both sides of the argument for pre-emption. The inquiry would be well advised, in spite of its excellent legal adviser, not to seek to give a definitive

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view in this very uncertain field of international law. What about the role of the security services? Surely that was adequately covered in the Butler report. What about the role of the military? It has had its lessons learnt reviews. There were some concerns about the quality of military equipment, but surely the general, correct view is that it was executed superbly by our Armed Forces.

The follow-up to the Iraq intervention is that there has been much public revulsion against all intervention. There was the Chicago speech by Tony Blair in, I think, 1998. There were successful interventions in Sierra Leone and Kosovo, but following Iraq and Afghanistan, as we have seen in Libya with no boots on the ground and as we have seen in the parliamentary view on intervention in Damascus, there is now a very strong public and parliamentary tide against intervention.

What about the likely conclusion about governance? Was there too much armchair government? Was there a presidential-style Government with the Cabinet sidelined? That may be so, but the memoirs of Robin Cook, no great admirer of the former Prime Minister, suggest otherwise. What about the insights into transatlantic relations? It was the clear strategic priority of the Prime Minister not to keep the United States isolated; that was very much a major factor for him. There was a great deal of evidence of that in the US inquiries. I had a certain personal experience of the somewhat naive views of the neo-cons in Washington when on several occasions I met Mr Richard Perle, whom Denis Healey called the “Prince of Darkness”. He relayed to me his view that come the liberation, while perhaps the bells would not ring in Iraq, there would certainly be great rejoicing and that the ripples of democracy would flow out from Iraq over the whole of the Middle East. That was a view which was in part accepted by the President, and the neo-cons were then very much in a dominant position in Washington.

What about the post-conflict planning? Is the inquiry likely to tell us anything useful about that? The truth is, of course, that we in the UK played a very secondary role in the conflict and certainly a secondary one in the post-conflict planning. I saw that when I went to the green zone in Baghdad and was in the office being occupied by Sir Jeremy Greenstock. I saw the role of Mr Paul Bremer and his large component on the other side. There were two contrasting blueprints for the post conflict. The State Department had Colin Powell and Richard Armitage, who told me that there was more combat experience on his floor in the State Department than on the relevant floor of the Department of Defense. In that department were Mr Donald Rumsfeld and Mr Paul Wolfowitz. They were at the top of the department and said that the Iraqi army was dissolved. As we know, the Chilcot inquiry was unable to interview key people in the US Administration, so it has been given only a partial view of the key players in the post-intervention scene in the United States.

In conclusion, I fear that this long-awaited and long-expected inquiry, long delayed for good or bad reasons, may well prove to be no more than an historic document mainly of interest to students of government. Possibly, after an initial flurry of interest in the press and among the public, the waters will close over it and

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it will have as little ultimate impact as the Franks committee report on the Falklands, referred to by my noble and learned friend. At least that had a totally UK national perspective. Many expectations have been raised, but it may well be that many expectations will be dashed.

7.50 pm

Lord Alderdice (LD): My Lords, I suppose that if one were to ask many members of the public for their memory of the political story of Iraq, they would probably say, “Well, in the United Kingdom, the governing Labour Party and the Official Opposition, the Conservative Party, supported the invasion, and the Liberal Democrats insisted on a UN resolution, which they did not get and they opposed the war as a result”. On that kind of narrative, one might well expect that I would be standing here wanting to find out the legal background—what really happened in past—in order to produce some kind of simplistic blame. It seems to me that that would be an extremely foolish thing to do.

First of all, as the noble and learned Lord, Lord Morris, said—and we must be grateful to him for securing this debate—it is a lot more complicated than that. Almost exactly 11 years ago to the week, on 15 February 2003, between 1 million and 2 million people came out to protest. They were not all Liberal Democrats or anything like it. There were Conservatives like Ken Clarke. There were Labour people, including Robin Cook, Tony Benn and many others, who had their reservations. Indeed, within the community as a whole, there was a great debate about this question. It was not simple, and I have no doubt that when Sir John Chilcot’s report finally is published it will be a thoughtful, complex and detailed report. I got to know him very well when he was at the Northern Ireland Office and I always admired his acuity of perception and his integrity of conduct, and the same could be said of his distinguished colleagues.

From my point of view, the purpose of this inquiry is something quite different. It is to try to understand how we got ourselves into such a difficulty in order that we can look to the future with better understanding of how to deal with the problems. I will give one example. At the time of the first Gulf War, which was permitted by UN Security Council Resolution 678, there was a great debate as to how far it might be prosecuted. Noble Lords will well recall a lot of discussion as to whether it should actually be prosecuted right through to Baghdad to get rid of Saddam or whether Resolution 678 did not permit it. I had a great argument with my old friend and colleague, now the noble Lord, Lord Ashdown, on exactly this issue. It was my view that, with this particular guy in these circumstances, you needed to go the whole way to Baghdad and get rid of him. It seemed to me that to do anything other was not just a poor reading of Machiavelli but a poor judgment of the psychology of the person one was dealing with and the politics of the region. Paddy said, “No, no, no. That is not possible under UNSC Resolution 678. We cannot do that. We can just remove him from Kuwait”. Well, it is a bit ironic that so many years later it was UNSC Resolution 678 which was prayed in aid actually without a further activating resolution. If I was so hawkish—as I would have been deemed then—in

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the first Gulf War—why would I have spoken in your Lordships’ House in 2003 saying, “This is not the time to go ahead with it”? It is because situations change. I will come back to that because I believe it is the importance of the urgency of the Chilcot report.

The situation was that in the first Gulf War we had a huge coalition, there had been a clear breach, it obviously required military intervention, and it would have been possible to prosecute it through to the end. In the intermediate years, the Clinton Administration and others had tried to find negotiated ways of moving things forward. Indeed, as I said in your Lordships’ House on the occasion of that debate, there was a suspicion that the weapons inspectors were being put in place simply to try to produce a justification to return to Resolution 678. It seemed to me that it was not going to end well. It was not going to resolve the problems of the region and stabilise Iraq.

How does that relate to the situation now? Noble Lords will recall that Parliament, in debates in the other place and here, made an extraordinary decision that set the Prime Minister and the Government back on their heels on the question of Syria. It was a watershed decision, in my view, in that a Prime Minister and a Government had decided that they wanted to undertake a military intervention, and Parliament, with the overwhelming backing of the people, said, “No. That is not a direction in which we want to go”. It seems to me that this puts up for serious exploration our whole approach to military intervention as to when and how it should be undertaken. Should it always be with military force or are there other ways in which we should intervene? Should we ever be doing it on our own? Should it always require a UN Security Council resolution?

These are very serious questions, but not for the past—of course they are interesting for the past, and, as the noble and learned Lord said, perhaps for some students of history in the future. They are important questions for us in the present and over the next few years, not to apportion blame but to see if mistakes and misjudgments were made, and I think everybody is clear that there were, and to try to prepare ourselves—but not to deal with the last war. One of the mistakes often made by military commanders and politicians is that they prepare themselves better to fight the last war over again. Our job ought to be to become clearer about the changing dynamics of the Middle East and of other regions in order to better make judgments about how we, as a country, play our role in that complicated region and elsewhere in a time when military strength is no longer any guarantee of military success. That is why I believe that we need the report with some urgency. The situation in the Middle East and in other places is developing very quickly. We are uncertain how to proceed and we need to understand whether and how mistakes were made so that we can find a different way of working.

I have no doubt that one problem is civil servants being wary about what things should be redacted and what things should not. I was reading just yesterday a letter by Elizabeth Wilmshurst, the FCO’s deputy legal adviser who resigned; her resignation letter was published some time later. The redaction made at the

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time by the Foreign Office and later released through the press is quite interesting. I read the redaction and I read what was originally published, and I could not understand why on earth they had bothered to take out what they did, because it did not tell us anything that we did not know. I was not the least bit surprised because my own experience with many security and Civil Service documents is that when there is a great dust-up about what to release and what not to release, more often than not, although not all the time, when you read what is redacted, the fact that it was kept out—and it was clear that it was kept out—actually produced more suspicion that there was something really serious there. When you read it afterwards, you say, “What on earth was all the fuss about?”.

However, perhaps it is not that. Perhaps it is that our friends in the United States are very nervous about some of the conversations between the two Prime Ministers, Mr Brown and Mr Blair, and the President. I am a friend of the United States and I think we have an extremely important relationship, but good friends sometimes disagree honestly. Indeed, we are not good friends if all we ever have to say is that we support the United States. I hear this all the time with the Middle East peace process. What is the British Government’s policy? It is to listen to what the American policy is and agree with it. That is no help to our friends. We need to engage in a proper public debate about these issues and then be supportive.

Therefore, I appeal to my noble friend the Minister to help us understand why there is such a delay and to appreciate on behalf of the Government that early publication is not a matter of the past but an urgent requirement for the present and the future.

7.59 pm

Lord Elystan-Morgan (CB): My Lords, the House is deeply indebted to my friend, the noble and learned Lord, Lord Morris of Aberavon, for initiating this debate.

Of course, it is a very great pity that, whenever the Chilcot inquiry reports, it will be more than 11 years since the military operations occurred in Iraq, but that is not the issue before the House tonight. We are not considering whether Prime Minister Blair involved this kingdom in an illegal war or whether he is as pure as the driven snow as far as that matter is concerned. We are not concerned in any way with the issue of weapons of mass destruction or what was genuinely or not genuinely believed in that regard. We are concerned only with seeking to ask the question: why has the Chilcot inquiry been held up in the way that it has?

The truth is that the Chilcot inquiry has run into a massive roadblock. As described by the noble and learned Lord, Lord Morris, this is the release—not to the members of the Chilcot inquiry because they have seen them already but to the public if the opportunity arises—of three groups of documents: 25 notes passed between Prime Minister Blair and the President of the United States; 200 Cabinet or Cabinet-style discussions relating to the relevant matters; and 130 conversations between either Prime Minister Blair or Prime Minister Brown and the President of the United States. That is the issue.

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The relevance of those documents is not that they have been seen by the Chilcot inquiry but that the Chilcot inquiry wants to use them for a very specific and very significant purpose: the so-called Maxwellisation principle, which was established in relation to the inquiry following the death of Sir Robert Maxwell. In other words, a body such as the Chilcot inquiry wants to be able to say, “We have examined all the evidence. We have come to the conclusion that there is a prima facie case against A, B, C and D—the finger of blame appears to point to them as persons who ought to be criticised. But we are not going to do that without giving them the opportunity of replying to that situation and calling evidence if they wish”. That seems an unimpeachable principle of fairness.

However, the Chilcot inquiry goes one step beyond that and says, “It is not enough that we should be able to do that. We should be able to show to the public, if our conclusions remain the same, why we regard those persons as blameworthy; in other words, that they should be condemned not out of the generality of our conclusions but out of the specific evidence that is contained in these particular pieces of documentary evidence. Unless Maxwellisation is made public and those documents are produced and published at the time the report is published, Chilcot will not be regarded as having full validity”. I absolutely say amen to that.

Who is holding up this disclosure, which, in my submission, is utterly essential to the fairness of this inquiry? It is apparently the Cabinet Secretary, Sir Jeremy Heywood. He is saying, “I am opposing this on grounds of sound precedent, a precedent laid by my predecessor” —the noble Lord, Lord O’Donnell—“that is, the law of the Medes and Persians”. I would challenge that completely and make the following submissions. First, it does not matter what the noble Lord, Lord O’Donnell, or any other civil servant in the past 1,000 years has said. It can make no difference whatever. It is not a matter for a civil servant to decide.

Secondly, it is a matter for the Government, as the sovereign and ultimate legal authority, to decide, and nobody else. The Prime Minister, making a statement on this matter last year, said that Government were responsible for disclosure. It does not matter what pressures there might be from the United States or the Civil Service. The Government are legally and morally responsible.

Thirdly, a long, long time ago when I was a law student—it almost seems like 1,000 years ago—the noble and learned Lord, Lord Morris, and I were in the same department at Aberystwyth and we were taught sound principles of equity. One of the principles of equity was: no man shall be a judge in his own suit. In other words, there are certain people who should not adjudicate in this matter. Who would be the last person who should ever be allowed to adjudicate on the question of whether or not these documents should be made public? Clearly, that is either Prime Minister Blair or Prime Minister Brown. Who would be the next? You might say someone who was the alter ego of one of the two persons. Who was the alter ego of Prime Minister Blair? It was Sir Jeremy Heywood—one of the main protagonists in this confused, complicated and altogether very strange story.

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I am not saying for a moment that Sir Jeremy is other than a fair, honourable and thoroughly decent man, but there is a principle of law which says that justice must be done and must be manifestly seen to be done. Unless the Government intervene here, as it is their moral and legal responsibility to do, this matter will fester and I think it will contaminate and poison the whole body politic. The confidence that people have in parliamentary democracy, already injured, will be further demeaned.

8.07 pm

Lord Liddle (Lab): My Lords, I suppose I ought to declare an interest in this debate in that I worked at No. 10 at the time of the Iraq war. Indeed, I sat opposite some of the foreign affairs private secretaries whose minutes are now to be found on the Chilcot inquiry website. I saw some of it pretty much at first hand, although I was not directly involved with Iraq. It was not a very easy period, I can tell your Lordships.

I do not think it is right for our debate tonight to get into the substance of the issues that the Chilcot inquiry is addressing. It has been an extremely good debate and the speeches, as usual for the House of Lords, have been of exceptionally high quality, and I thank the noble and learned Lord, Lord Morris of Aberavon, who obviously put an awful lot of thought into what he had to say in opening the debate.

I will confine my remarks from these Benches to the question of delay and the view the Government take of that delay and of the questions relating to the disclosure that are at the heart of that delay. It is important to be clear: as I understand it, it is not that written evidence has been withheld from the inquiry; the inquiry has seen all the relevant papers. The issue at stake is how much of that evidence it can actually quote in its final report. So the question is: does the committee base its conclusions on the public taking it on trust that it has read the material and this is what it concludes, or is it able to quote from the documents?

Everyone will agree that the Chilcot process has been very thorough. If you look at that website, you will see that far more government papers are available than for any precedent that I can recall. The comparison with Suez, where no one was told about the secret deal that was done with the French and the Israelis, is very striking.

However, there are questions about the extent of disclosure. I want to see the Iraq question and as many of these issues as possible put to rest, but even then there are three areas in which questions of disclosure raise awkward issues. These are questions not just for civil servants, but for any responsible Government of any party acting in the national interest.

I think one of these questions has already been sorted out: the question about dealing with the use of intelligence, and the worries as to whether disclosure of anything to do with intelligence compromises sources. I should like the Government to confirm what I think to be the position: that in the case of Iraq those questions were sorted out in the Butler inquiry in 2004, and that there are no new intelligence issues arising in the case of Chilcot. These issues relate to national security. From our Benches, as my party

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leader said only yesterday, we support greater scrutiny of the way in which intelligence operates. There are obvious limits as well.

The second issue concerns relations with our allies. The committee wants to quote from private correspondence between the Prime Minister and the President of the United States. If we see ourselves as America’s closest ally there is a real question, not just of the past but for the future, as to the obligation that places on us to protect confidences in that relationship. On that point I am sure a lot of people would say, “Damn the Americans”. I do not take that view. If we are serious about our alliances—and the same would be true of our close partners in Europe in other situations—we do have obligations to our allies and partners. How do the Government see that question? Time makes a great difference, but we are talking about something that happened a little over 10 years ago. What view do the Government take of what is a reasonable time to disclose things that affect our closest allies?

Thirdly, there is the issue about freedom of information and what are called Cabinet-level discussions. Whatever decisions the Government make on disclosure as far as the Chilcot inquiry is concerned could have long-term implications for freedom of information more generally. This is a serious issue. My party introduced freedom of information in 1998. We are proud of that achievement, but there were always boundaries that had to be set. I have always thought of freedom of information, in simplistic terms, as meaning that expert advice should be open but confidential discussion should remain confidential. How do the Government see this question about disclosure of discussions right at the centre of government on the basis of papers provided? Much of the content is now available on the website, but how do the Government see this question of disclosure of Cabinet-level decisions? This will have an impact on all future Governments. This is not just about dealing with the Iraq issue. This is about whether disclosure is going to affect the relationship between Ministers and civil servants for decades ahead. We have to get that right.

Lord Elystan-Morgan: Two points arise. First, if it be the case that information of a confidential nature between states is always to be kept in the background, that is an end to any question of transparency. Does the noble Lord accept first of all that many of the thousands of documents that have been disclosed to Chilcot on the basis that they are declassified and therefore open to publication come into that particular area that he mentions?

The other matter is that it appears—if the responsible press is to be believed—that Mr Brown, in so far as his position as Prime Minister or as Chancellor is concerned during the period from 2001 to 2009 that is covered by the inquiry, says that he has no objection to the disclosure of any of the three groups of documents that have been referred to.

Lord Liddle: I am arguing here that these are very difficult decisions and that we have to have a clear view for the future. I am not looking to the past; I am

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wondering what the impact of this will be on future relations between Ministers and between Ministers and civil servants. I would simply be grateful if the Minister was able to give us an answer.

8.17 pm

Lord Wallace of Saltaire (LD): My Lords, I thank the noble Lord, Lord Liddle, for that extremely constructive and helpful speech, which took a number of themes which I, too, wish to cover.

Perhaps I, like others, should admit that I am not entirely a neutral observer in this. I was my party’s defence spokesman at the time, and I was involved in the development of what was then Liberal Democrat opposition to the war. Part of my reason for being so was that I had been a relatively frequent visitor to Washington both before and after 9/11. I met there people whom I had known when I was a graduate student in the United States in the early 1960s and who had become some of the leading neo-conservatives within the Administration. It was because of what I knew of some of their underlying assumptions and of my participation in two National Intelligence Council-sponsored conferences in Washington, one in the autumn of 2001 and one in the summer of 2002, that I concluded that the Bush Administration were determined to go to war with Iraq against the advice of some of their own intelligence analysts who knew the Middle East well.

Having said that, I should say that this is a very different inquiry from the Franks inquiry. It starts with the examination of the Government’s Iraq policy papers in 2000, before 9/11, and concludes with the withdrawal of British troops from Iraq 10 years later. It therefore covers a much longer period than the short period of the Franks report and deals with a coalition war in which we were only a secondary contender. Franks was concluded in six months, but evidence was taken in private; the report covered only the period before the conflict; it did not publish many of the documents. I again declare an interest: I was one of those who reviewed it very critically on publication because it seemed to me that it had distorted the actual situation. The intelligence community had indeed got it right. The only mistake that it had made was in thinking that the Argentinians would not be unwise enough to try to invade the Falklands before the winter; it thought that it would do it six months later.

I also looked back at the Dardanelles inquiry, and reference has been made to the situation after Suez. What we now have with the Chilcot inquiry is a very much more thorough examination in which we are talking about several thousand documents—I must correct the noble Lord, Lord Elystan-Morgan: they have not been declassified by being released to the Chilcot inquiry. This is an inquiry by privy counsellors; they have access to everything that they wish to see, including intelligence documents et cetera. The question at stake is not access; it is publication.

I am informed that, when we see the eventual publication, a great deal will be published that it has not been the custom of British Governments to publish before. However, as the noble Lord, Lord Liddle, said, when you get into the question of how far you publish

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Cabinet minutes that appeared less than 20 or 30 years ago, clearly, whatever happens, you will be seen to have been setting a number of precedents. Another question is how far you publish documents which relate to conversations with some of our closest allies, whether or not you have their permission. There are here some very large issues of national policy and national interest which we all have to consider.

Lord Elystan-Morgan: I quote here from the Prime Minister’s letter of 5 November in reply to the letter of the day before from Sir John Chilcot. He states:

“I am aware of the scale of the task declassification has presented to a number of Government departments, and it is good to have the acknowledgement of the work that has been done by the Cabinet Office and other departments to deal with the disclosure requests, involving several thousand documents, including many hundreds since the summer”.

That seems to me to say—I may be wrong and I apologise if I am—that thousands of documents have been declassified, but I will be corrected.

Lord Wallace of Saltaire: My Lords, I would distinguish between access and publication. The delay is very much about working through thousands of documents, many of them very lengthy, and deciding how much can safely be declassified for publication—how much therefore can be published, how much some documents should be redacted in part and whether there are documents which it would be safer not to publish at all. That has taken a good deal longer than was hoped, but it is now well under way and is what we are currently considering.

Lord Anderson of Swansea: Is it true that the request by the inquiry was only made last June?

Lord Wallace of Saltaire: Sorry, which request?

Lord Anderson of Swansea: The request to publish the documents set out in the letters.

Lord Wallace of Saltaire: I am not informed on that matter. I know that, last July, they hoped to be able to start the process of Maxwellisation within a few months. That has been delayed because what happens in a Maxwellisation process—here again I have to correct the noble Lord, Lord Elystan-Morgan—is that those who are mentioned in the report will be allowed to see in full those elements of the report which carry their evidence and will be published. So they will not see more; they will see what will be published.

This is not, incidentally, a court of law. In no sense is this a legal inquiry. It is not a matter, if I may quote the noble Lord, of people against whom there is a case; it is a matter of those who may see themselves as being criticised in the report being given time ahead of publication to prepare their response to the criticisms. So, if I may say so to the noble Lord, Lord Elystan-Morgan, this is not a roadblock. It is, however, an obstacle course, and that takes a good deal of time and discussion among different government departments, which I regret has taken longer than we hoped. I very much hope that it will be concluded soon. The Maxwellisation letters will then be able to go out and

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we will proceed at the normal stately but sure pace of government publications to a publication of the final report.

I also raise the role of the Cabinet Secretary because I know that he has been criticised quite substantially in the press. The Cabinet Secretary is entitled to see all the papers of previous Governments. In the final resort, as we all know, the Cabinet Secretary only advises and the Prime Minister can always override, but I am old-fashioned about civil servants. Senior civil servants are servants of the Crown as well as of the Government, and they advise in their perception of the long-term national interest. That is what the Cabinet Secretary is doing and I regret that there has been some rather partisan criticism in the press about his role, criticism which I think is unjustified.

The question was also raised as to whether the Butler report covered intelligence, so that we do not need to take it again. The Butler report covered intelligence leading up to the war. This inquiry, which takes us several years past the war, may well need to address one or two other questions. I should perhaps also mention the Gibson inquiry, which, as noble Lords will know, provided an interim report last December on some of the issues of rendition and alleged ill treatment of British nationals and others. A picture of various different dimensions will come into that.

This does, therefore, take a good deal of time to complete. It has not been helped, sadly, by the illness of one of the five members of the Chilcot inquiry, but the other four are well under way and I stress again that Gordon Brown’s promise at the beginning that:

“No British document and no British witness will be beyond the scope of the inquiry”.—[Official Report, Commons, 15/6/09; col. 23.],

has been carried out for the inquiry. The question that therefore remains, as the noble Lord, Lord Liddle, rightly points out, is how much of this it is wise to publish. That is what has caused the delay and it is what we are currently working through.

So there are questions about how fast we can work towards this conclusion and there are, as the noble Lord, Lord Alderdice, said, questions for the future. I disagree with those who have suggested that the report, when it comes out, will be simply a historical document gathering dust. I think that it will raise precisely the sorts of questions which the noble Lord, Lord Alderdice, has suggested. What should be the conditions for future intervention? How much information should be shared with Parliament and with opposition parties in order to carry Parliament and the public with the Government? How should we handle the coalition aspects of interventions, given that it is highly unlikely that Britain will be involved in any serious military operations abroad in the future which are not in coalitions with others? There, I think, is where the debates will focus.

The Government are well aware of the sensitivity of these issues. I return to the questions raised by the noble Lord, Lord Liddle. What is a reasonable time before we disclose conversations with our closest allies and what precedents do we set if we start to publish Cabinet minutes of the previous Government, when others give their advice in Cabinet and elsewhere on

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the basis of full confidentiality? These are serious questions with which the Government are currently struggling.

I thank the noble and learned Lord, Lord Morris, for raising this question. I assure the House that a large number of officials are working through those issues. The Chilcot inquiry and its four active members are still at work, and we very much hope to publish the final report within the foreseeable future. I will be pushing for that future to be as foreseeable as it can be.

Water Bill

Committee (3rd Day) (Continued)

8.30 pm

Amendment 161ZA

Moved by Lord Shipley

161ZA: After Clause 68, insert the following new Clause—

“Duties of landlords

(1) In this section—

“landlord” means—

(a) where the relevant premises are occupied under a lease, the person for the time being entitled to the reversion expectant on that lease or who, apart from any statutory tenancy, would be entitled to possession of the premises; and

(b) where the relevant premises are occupied under a licence, the licensor, save that where the licensor is himself a tenant in respect of those premises, it means the person referred to in paragraph (a);

“lease” means—

(a) a lease for a term of less than 7 years; and

(b) a tenancy for a periodic term; and

(c) any statutory tenancy arising out of a lease or tenancy referred to in paragraph (a) or (b),

and in determining whether a lease is one which falls within paragraph (a) above—

(a) any part of the term which falls before the grant shall be left out of account and the lease shall be treated as a lease for a term commencing with the grant;

(b) a lease which is determinable at the option of the lessor before the expiration of 7 years from the commencement of the term shall be treated as a lease for a term of less than 7 years;

(c) a lease (other than a lease to which paragraph (b) above applies) shall not be treated as a lease for a term of less than 7 years if it confers on the lessee an option for renewal for a term which, together with the original term, amounts to 7 years or more; and

(d) a “lease” does not include a mortgage term;

“relevant premises” means premises or any part of premises occupied, whether exclusively or not, for residential purposes (such occupation being in consideration of money or money’s worth) under—

(a) a lease; or

(b) a licence;

“statutory tenancy” means a statutory tenancy within the meaning of section 6 of the Rent Act 1977 (dwelling-houses let with other land) and section 7 of the Rent (Agriculture) Act 1976 (discretion of court giving possession);

“tenant” means a person who occupies relevant premises being—

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(a) where the relevant premises are so occupied under a lease, the person for the time being entitled to the term of that lease; and

(b) where the relevant premises are so occupied under a licence, the licensee.

(2) Every landlord shall ensure that they hold suitable buildings insurance against damage from flood for the relevant premises.

(3) A landlord shall notify a tenant if the relevant premises appear on the register maintained under section 61.

(4) A record of the insurance held under subsection (2), or a copy thereof, shall be made available upon request and upon reasonable notice for the inspection of any person in lawful occupation of the relevant premises.”

Lord Shipley (LD): My Lords, this is a probing amendment on the rights of tenants and the problems that can arise if there is no adequate buildings insurance in place. Reputable landlords will take out insurance as a matter of course. However, there is no compulsion for landlords to do that, and tenants can be particularly vulnerable if their landlords do not take out buildings insurance. They may not be covered for the cost of moving out or for temporary accommodation in the case of flood. Of course, it is understood that tenants must provide their own contents insurance. The amendment does not relate to contents insurance.

The amendment would give tenants the right to know all the facts about an insurance policy on the property that they are renting, including whether there is one at all. The solution to this problem is to make it mandatory for landlords to take up buildings insurance that includes flood risk insurance; to require landlords to tell a tenant if a property is on the register of premises subject to greater flood risk as defined in Clause 61; and to show a copy of the insurance policy to a tenant on request.

I fully understand that landlords will not benefit from the FR scheme. However, landlords pay income tax, and I understand that they would be able to offset the cost of insurance against income tax. I should be grateful for the Minister’s confirmation of that and to know whether, therefore, the Government could support an amendment on Report that protects the rights of tenants, as proposed in this amendment. I beg to move.

The Earl of Lytton (CB): My Lords, I had not intended to make any comment on this, but perhaps I ought to. I have one or two problems with the amendment. First, it appears to refer to any type of property, so it could be residential or non-residential. It appears to cover any type of tenure. The definition of “relevant premises” includes,

“any part of premises occupied”,

which presumably includes the garden. The requirement is for the landlord to hold insurance regardless of risk.

I declare an interest in that I am a landlord of a residential property that is let. It is not itself at risk of flood, but a stream crosses part of the garden. That does not put the property itself at risk, but if it was perceived by an insurer on the basis of the postcode lottery principle that it was somehow at risk and that ratcheted up my insurance premium—which, of course, I should be delighted to cover for all normal risks—I see that there might be a needless requirement to cover for a risk that was not there.

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I do not know how that provision sits, because the terminology for “landlord” is wide and the amendment would probably include other properties without any streams in the garden that I might happen to let on a holiday letting, or something like that. I can see that tenants need to be protected in some way, but let us look at what the protection might mean in practice. There is a flooding event; there is insurance cover. Let us say the interior—the inhabitable bit—of the premises is rendered incapable of occupation, not only because of the effect of the flood-water, but also because of the filth and everything else, causing damage to fittings, de-lamination of kitchen units and all the other horrors. It will need a thorough clean-out, with bits replacing, probably a renewed kitchen, and certainly redecoration and drying out. That takes time. The tenant is inevitably going to have to move out. He is going to move to somewhere else. The consequential losses presumably do not cover the loss of the tenants; they only cover the damage to the property. If it needs shoring up then that is a consequential loss.

So with the greatest respect to the noble Lord, Lord Shipley, I am not sure that this amendment achieves what it sets out to do. Maybe I have got hold of the wrong end of the stick, but the landlord’s insurance does not enure for the benefit of the tenant. If you look at a commercial lease, for instance, it normally has a cessor of rent clause which causes the rent to stop being payable at a point where damage occurs beyond a certain level, so the property is no longer fit for occupation. But if it is not reinstated within a certain period of time, the tenant has the option to move out and determine the lease. The tenant, in the mean time, whether it is a business that needs to continue its business occupation, or a tenant in residence who actually needs a roof over his head, is going to have to move, so I am unclear about the mechanics of how this would really work in practice, because I do not see that it protects the tenant.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con): My Lords, Amendment 161ZA from my noble friend Lord Shipley seeks to make it obligatory for landlords to hold buildings insurance, including cover for flood risk. I can confirm to him, in answer to his question, that the cost of insurance premiums can usually be offset against profits for tax purposes. I am sympathetic to the intention behind this amendment although I am not sure that this Bill is the right vehicle for this debate.

I note that while this amendment refers specifically to flood cover, buildings insurance includes protection against a range of perils including, for example, fire and theft. Although there is no legal requirement for property owners to take out insurance for their properties in the UK, owner-occupiers and landlords generally choose to do so in order to benefit from the financial protection that insurance offers. In addition, and importantly, most mortgage lenders specify buildings cover as a mandatory requirement for providing a mortgage on a property.

The Government agree that it is very sensible for landlords to take out insurance, but are conscious that the decision is a matter of individual choice, based on

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a commercial decision to protect an investment made in property. We are concerned that making insurance compulsory across the board could create a regulatory burden, which could deter investment in the private rented sector. I strongly encourage tenants always to check with a prospective landlord that appropriate cover is provided for the property.

If I might pause specifically on the issue of support for tenants in the event of a flood, we appreciate the concerns raised recently by the National Flood Forum and others that tenants of properties not covered by insurance might be left homeless following a flood. I note that some insurance policies have an “alternative accommodation” provision, but I would also like to assure noble Lords that, even if this is not the case, tenants do have protection. All local authorities are required to provide accommodation for households who are eligible for assistance, homeless through no fault of their own, and have a priority need for accommodation—into which category flood victims would clearly fall.

As part of its role in promoting flood awareness, the Environment Agency strongly encourages landlords to make a flood plan and to make their tenants aware of what to do in a flood. I also remind noble Lords that all residential contents policies will be eligible for cover through Flood Re, including tenants of rental properties, so long as they are not in properties built after 2009 or in band H or their equivalents. I ask that the amendment be withdrawn.

Lord Shipley: My Lords, I am grateful for the two contributions. I am reassured in part by the Minister’s reply. This is about tenants who have an entitlement to know whether or not they are in a high-risk area; indeed, we have already had discussions today about how people find that out. Tenants in private residential properties are often on low incomes, and it is reasonable that they should be told formally if they are renting a property in a high-risk area. That seems to be a basic entitlement if someone signs a lease. It is right that they should know and be given a copy of the buildings insurance with flood cover that the landlord has, so that if the landlord does not have that then the tenant is aware of that fact.

The amendment is not about contents insurance; I fully understand the law in that respect. However, we need to be very careful if there is going to be a rising incidence of flooding that means that some private tenants find themselves flooded but do not have contents insurance because they did not think they were in a high-risk area or were not aware of it, or thought that the landlord would cover it even though the landlord would not be responsible for their contents insurance. With this amendment I am seeking better clarity, given that there have been cases in recent months where flooding has occurred and tenants have in practice had a cost to bear. Of course there are costs involved in moving out that fall on the tenant, not the landlord, unless the tenant is prepared to sue the landlord. They could do that but it is very complicated for a private tenant to do.

I note the Minister’s concern and will think further about this. For the moment, I beg leave to withdraw the amendment.

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Amendment 161ZA withdrawn.

Amendment 161A not moved.

Clause 69: Interpretation

Amendments 161B to 161D not moved.

Clause 69 agreed.

Clause 70: Period of operation

Amendments 162 and 163

Moved by Lord De Mauley

162: Clause 70, page 120, line 26, leave out paragraph (b) and insert—

“(b) the revocation of a scheme’s designation under section 51(1)(b) without a new designation being made under that provision, at any time before sections 51 to 56 are repealed,”

163: Clause 70, page 120, line 37, at end insert—

“(4A) Before making an order under subsection (3)(a)(i) or (b) which includes provision for the transfer of an amount of the reserves of the FR Scheme, the Secretary of State must consult the FR Scheme administrator about the amount to be transferred.

(4B) The Secretary of State may by regulations define “reserves” for the purposes of subsection (4A).”

Amendments 162 and 163 agreed.

Clause 70, as amended, agreed.

Clause 71 agreed.

Clause 72: Internal drainage boards: procedure for orders confirming reorganisation

Amendments 164 and 165

Moved by Lord De Mauley

164: Clause 72, page 121, line 28, leave out “made by the Secretary of State”

165: Clause 72, page 121, line 34, leave out “made by the Secretary of State”

Amendments 164 and 165 agreed.

Clause 72, as amended, agreed.

Clause 73 agreed.

Amendment 165ZA

Moved by Lord Howard of Rising