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Flood defence money 'falls short' Flood defence money 'falls short'
(about 1 hour later)
Insurers say they may not be able to provide cover despite the government pledging more money for flood defences.Insurers say they may not be able to provide cover despite the government pledging more money for flood defences.
The Association of British Insurers says the £800m a year the chancellor has pledged by 2011 is not enough.The Association of British Insurers says the £800m a year the chancellor has pledged by 2011 is not enough.
Environment Secretary Hilary Benn said the £800m allocation was announced in July, and that the government "doubled the investment" in the last decade. Environment Secretary Hilary Benn said the £800m allocation was announced in July, and that the government had doubled investment in the last decade.
Parts of south-west England, the Midlands and Yorkshire were left under water during the summer.Parts of south-west England, the Midlands and Yorkshire were left under water during the summer.
The cost of extreme weather to the insurance industryThe cost of extreme weather to the insurance industry
On Monday, AA Insurance said home insurance costs had risen at their fastest rate since 1994 as a result of the flooding.On Monday, AA Insurance said home insurance costs had risen at their fastest rate since 1994 as a result of the flooding.
Buildings premiums jumped by 3% in the past quarter, reflecting the estimated £3bn cost of flood damage across much of the UK in June and July.Buildings premiums jumped by 3% in the past quarter, reflecting the estimated £3bn cost of flood damage across much of the UK in June and July.
We actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that Alistair DarlingChancellor Victims' insurance fearsWe actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that Alistair DarlingChancellor Victims' insurance fears
ABI director general Stephen Haddrill said the money pledged by Alistair Darling in Tuesday's Comprehensive Spending Review was so low that it could lead to a review of insurance services in the UK.ABI director general Stephen Haddrill said the money pledged by Alistair Darling in Tuesday's Comprehensive Spending Review was so low that it could lead to a review of insurance services in the UK.
"We really want to carry on being able to provide this service. But obviously we can't keep providing it at significant loss."We really want to carry on being able to provide this service. But obviously we can't keep providing it at significant loss.
"So what we are going to be looking for from the government is a recognition of what happened this summer and an increase on the level they have announced today," Mr Haddrill said."So what we are going to be looking for from the government is a recognition of what happened this summer and an increase on the level they have announced today," Mr Haddrill said.
'Deeply unhelpful''Deeply unhelpful'
But Mr Benn told BBC News: "The £800m that I announced to the House of Commons on 2 July followed a call from the Association of British Insurers in June of this year for us to get to £750m.But Mr Benn told BBC News: "The £800m that I announced to the House of Commons on 2 July followed a call from the Association of British Insurers in June of this year for us to get to £750m.
"So we actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that.""So we actually announced more than the ABI was calling for at the time. The really important task is to get on with spending that."
Before this year's flooding crisis, the ABI had called for the government to spend £2.25bn on flood defences during the coming three years - the equivalent of £750m a year.Before this year's flooding crisis, the ABI had called for the government to spend £2.25bn on flood defences during the coming three years - the equivalent of £750m a year.
I believe that the government don't think that this is the last knockings, as it were, that the next spending review will have to see an upward trajectory as well Baroness Young Your views - flood lessons It's not Christmas and birthday yet, it's good but it's not the end of the road Baroness Young Your views - flood lessons
But Mr Darling has announced spending between 2008 and 2011 which will total just £2.15bn. The amount spent will rise incrementally from £600m this year to £650m in 2008/9, £700m in 2009/10 and then £800m in 2010/11.But Mr Darling has announced spending between 2008 and 2011 which will total just £2.15bn. The amount spent will rise incrementally from £600m this year to £650m in 2008/9, £700m in 2009/10 and then £800m in 2010/11.
Former home secretary David Blunkett, whose Sheffield constituency was among areas badly hit by floods in June, said the ABI's comments were "deeply unhelpful".Former home secretary David Blunkett, whose Sheffield constituency was among areas badly hit by floods in June, said the ABI's comments were "deeply unhelpful".
Speaking during Prime Minister's Questions, he said: "It will lead people to conclude that the industry wishes to remove any commercial risk to their own profits and place that risk instead in the current and future policy holders."Speaking during Prime Minister's Questions, he said: "It will lead people to conclude that the industry wishes to remove any commercial risk to their own profits and place that risk instead in the current and future policy holders."
Meanwhile, head of the Environment Agency Baroness Young said the funding was a "good start" as she prepared to face MPs over the floods. Meanwhile, head of the Environment Agency Baroness Young has told MPs on the Environment, Food and Rural Affairs Committee that she welcomed the extra funding - but more would be needed to cope with climate change and increased building developments.
She will be asked by the Environment, Food and Rural Affairs Committee what more could have been done to help communities and what lessons have been learned. "It's not Christmas and birthday yet. It's good but it's not the end of the road," she said.
Baroness Young told BBC Radio 4's Today programme ministers knew the funding would have to be increased in the "future of climate change", with more money for surface water drainage and flood defences. It would help clear the backlog of communities which currently did not have sufficient defences - like Leeds - and to pay for more maintenance of existing defences, she said.
She said: "I believe that the government don't think that this is the last knockings, as it were, that the next spending review will have to see an upward trajectory as well." She said money had to be prioritised on densely populated urban areas and said several billion pounds might have to be spent on bringing the Thames Barrier "up to scratch".
Drainage questionsDrainage questions
BBC environment correspondent Sarah Mukherjee said the Environment Agency had been told by the government to plan for a one-in-100-year flood event - but the summer flooding was much worse than anticipated.
Committee chairman Michael Jack said he and his colleagues had received an unprecedented level of submissions on the floods that left thousands homeless, tens of thousands without power and hundreds of thousands without water.
He says the government should have acted earlier after more extreme weather and flooding was predicted by the chief scientist in 2004.

INSURANCE COSTS OF EXTREME WEATHER

Date Incident 2007 cost (£m)* Dec '81-Jan'82 Arctic weather/rapid thaw 630 Jan '87 Severe snow nationwide 551 15-16 Oct '87 Hurricane force winds hit SE England 2,089 Jan/Feb '90 Storms and flooding 3,370 Dec '95-Jan '96 Severe snow, Scotland and NE hit 427 Jan '05 Carlisle floods 259 Jun-Jul '07 Floods 3,000** Source: Association of British Insurers Note: * Actual cost of insurance claims paid, rounded up to 2007 figures.** Estimated figure.

INSURANCE COSTS OF EXTREME WEATHER

Date Incident 2007 cost (£m)* Dec '81-Jan'82 Arctic weather/rapid thaw 630 Jan '87 Severe snow nationwide 551 15-16 Oct '87 Hurricane force winds hit SE England 2,089 Jan/Feb '90 Storms and flooding 3,370 Dec '95-Jan '96 Severe snow, Scotland and NE hit 427 Jan '05 Carlisle floods 259 Jun-Jul '07 Floods 3,000** Source: Association of British Insurers Note: * Actual cost of insurance claims paid, rounded up to 2007 figures.** Estimated figure.
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