Spelman's flood insurance is the UK's Obamacare

Just wetter. And less controversial. Much like Britain.

Caroline Spelman is in talks with the insurance industry about mandating coverage of houses damaged through severe flooding.

The Telegraph reports:

Ministers are concerned that some insurance firms are able to "cherry pick" customers in low-risk areas and refuse to offer cover to home owners in flood-prone neighbourhoods.

At the same time, customers in high risk parts of the country cannot "shop around" for cheaper policies because they are tied in to their current providers under the existing agreement.

The Department for Environment, Food and Rural Affairs said most insurance companies already raise "a small sum" from policy holders to cover the cost of insuring homes at high risk of flooding.

Mrs Spelman said she was proposing nothing more than "formalising" the existing "cross-subsidy" and that talks with insurance firms have made "significant progress".

The paper reports this with the headline "Every home to pay price of floods", seemingly missing that this is the point of insurance. Individuals suffering severe losses mitigate the damage by spreading it around society. In most areas, this optional; in some, such as motoring and (in a way) health, it is not.

The real question is whether or not insurance companies should be allowed to refuse to insure those who live in areas prone to flooding.

The free-marketeer point of view is that of course they should. It's a commercial transaction, like any other, and it's not the government's prerogative to force one party to enter in to it if they aren't happy.

But the problem is that large swathes of the UK are prone to serious flooding. And as climate change bites, that's only going to get worse. It doesn't necessarily mean your house is definitely going to go underwater – if that were the case, you really should move – but it may be enough to render many places uninsurable.

And what then? It's all very well telling, say, the entire population of London, Kent and Essex east of the Thames Barrier that they are prone to flooding, but that isn't going to lead to them moving. Or, even worse, it might; Britain would be subject to development pressures like never before if that we the case.

It's almost exactly the same as the major change brought in by Barack Obama in his Affordable Healthcare Act. That requires American health insurers to cover anyone who applies for insurance, without discriminating against pre-existing conditions; the Spelman deal will require British home insurers to cover anyone, without discriminating against pre-existing general floodiness.

We do get off slightly lightly, in that the most controversial part of Obamacare isn't needed here. The individual mandate, which levies a fine on Americans who can afford health insurance but don't buy it, is needed because of the fear that people would wait until they were diagnosed with a long-term condition before buying health insurance. If they did, insurance costs would spiral as insurers would be unable to use the premiums of healthy people to pay for the sick.

Luckily, there isn't really a comparable problem for homes. If your house is underwater, it's probably a bit too late to buy insurance. Although if Spelman's deal leads to people desperately dialing Direct Line as the water flows up their street towards their front porch, that may need to be reconsidered.

The flooded village of Penkridge. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
Show Hide image

The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

0800 7318496