🌊 Delegated Legislation Committee

• The Draft Flood Reinsurance (Amendment) Regulations 2025 were discussed in a parliamentary session, aiming to increase the annual levy for the Flood Re scheme from £135 million to £160 million starting from 1 April 2025. This increase is crucial for Flood Re Ltd to afford necessary reinsurance and maintain the scheme’s effectiveness.

• Flood Re, established in 2016, provides affordable flood insurance to UK households at risk, significantly improving access to insurance for these properties since its inception. It supports over 500,000 households and includes a “Build Back Better” initiative for post-flood resilience.

• The levy increase is needed due to a projected increase in liabilities from £2.1 billion to £3.2 billion over the next three years, influenced by changes in market risk and global reinsurance challenges. The change has been thoroughly reviewed by government departments and the Government Actuary’s Department.

• Cross-party support was shown for the amendment, emphasizing the importance of the Flood Re scheme in protecting households against the increasing frequency of extreme weather events and associated financial and mental health impacts.

• Discussions also touched on potential expansions of the scheme, like including businesses or properties built after 2009, but no immediate plans for such expansions were confirmed due to the complex nature of business insurance and existing planning policies aimed at preventing development in high-risk flood areas.

• The session highlighted the government’s broader efforts to enhance flood resilience, including increased funding for flood defenses and the establishment of the Flood Resilience Taskforce to coordinate strategies and responses to flooding. Plans for integrating frequent flooding and nature-based solutions into the funding formula were also mentioned.

• Concerns and suggestions were raised about the impact of future development on flood risk areas and the need for clearer planning guidelines and potential protections for properties developed despite flood risk warnings.

• The issue of coastal erosion was brought up, with calls for considering a similar reinsurance scheme, though it was clarified that this falls outside the current scope of Flood Re.

• The session concluded with the amendment being supported, ensuring the continuation and effectiveness of the Flood Re scheme in providing affordable flood insurance to UK households.

The session displayed a very low level of disagreement among the participants. The overall tone was one of consensus and support for the draft Flood Reinsurance (Amendment) Regulations 2025. Key points that indicate minimal disagreement include:

• Support for the Statutory Instrument: The shadow Minister, Dr Neil Hudson, explicitly stated that ‘His Majesty’s most loyal Opposition are happy to support this measure’, which clearly signalizes broad support across party lines.
• Positive Feedback: Multiple speakers, including Andrew George (Liberal Democrat) and Steff Aquarone (Liberal Democrat), expressed that they welcome the measure and the work of Flood Re, further demonstrating agreement on the need for the proposed changes to the scheme.
• Constructive Suggestions: While there were questions and suggestions for expansion or inclusion of other aspects such as coastal erosion (Steff Aquarone) and businesses (Dr Neil Hudson), these were framed in a constructive rather than oppositional manner. The Minister, Emma Hardy, responded to these points with a willingness to consider them in her answers.
• Minister’s Reassurances: In her response, the Minister provided detailed explanations and reassurances on the points raised, showing an intent to address concerns rather than refute them, which further contributes to the atmosphere of collaboration rather than conflict.

The lack of debate over the necessity of the regulations, and the absence of any direct opposition or negative vote against the motion, underline the session’s low level of disagreement.