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 Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.