Water floods a row of terrace houses along the banks of the River Severn in February 2014. Photo: Getty
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The million households threatened by climate change must unite as a political force

A new system of flood insurance for British households called Flood Re is due to be approved by the House of Lords today. But it fails to factor in climate change.

“An Englishman’s home is his castle”, goes the old saying. The way the government’s flood insurance plans are going, we may soon need to start digging our own moats. Today the House of Lords is set to give its seal of approval to a new system of flood insurance for British households, called Flood Re. It has many good points: it seeks to keep flood insurance affordable for the most vulnerable, cross-subsidising those at highest risk through a small levy on all homes. But it has one fundamental flaw: it fails to factor in climate change.

This might seem a slight oversight, in light of today’s dire warnings from climate scientists​, and particularly after the UK has just experienced the wettest winter on record. But the Government’s Impact Assessment for the policy states plainly: ”the baseline scenario assumes that flood risk remains the same over time”.

This is clearly ludicrous. The Government’s own figures project that the number of homes at significant risk of flooding will accelerate from 370,000 currently, up to almost a million by the 2020s. The insurance industry agrees; as a recent briefing by the Association of British Insurers states, “Climate change is expected to increase the probability of flood events in the future, and the average annual damages arising from them.”

So what’s going on? Defra’s justification for their rejection of growing flood risk is to claim, “as a working hypothesis”, that “the effects of climate change and investments in flood defences are broadly offsetting.” But it is patently untrue that investment in flood defences has kept pace with rising seas and worsening downpours. Ministers were warned by the Environment Agency in 2009 that much higher investment would be needed just to stop more homes sliding into flood risk; the Coalition responded by slashing flood defence spending. The Committee on Climate Change have recently warned that a half-billion pound gap has emerged between what the Coalition have spent and what’s actually needed.

The insurance industry, for their part, have a pressing interest in reducing the general risk posed to their business by climate change. It was their lobbying last summer, as negotiations over Flood Re came close to breaking-point, that forced Ministers to promise slightly increased spending on flood defences after the next election. But don’t imagine for a moment that this amounts to the state shouldering responsibility for protecting all its citizens from climate change. Current spending trajectories will lead to at least 250,000 more homes becoming at flood risk over the next twenty years. The Treasury has no intention of suddenly taking on new financial obligations, even when these constitute protecting people’s homes and livelihoods; as a Defra briefing icily notes, “we are clear that there is no Government liability for Flood Re”. Unfortunately, the insurance industry, sick of delays and bruised by endless fights with Treasury mandarins, has accepted these crumbs as being good enough for now.

But it gets worse. Because Flood Re isn’t even a permanent settlement; it has a sunset clause, meaning it will expire after 25 years. Every five years, it will reduce in scope, moving from a system of progressive cross-subsidy to ‘risk-reflective pricing’ - in other words, to a free market in flood insurance. So while climate change is pushing more and more households into flood risk, flood premiums will be becoming less affordable. ‘Risk-reflective pricing’ is meant to incentivise at-risk households into taking steps to prepare for flooding - such as installing door guards or airbrick covers. But even the insurance firms think such measures can only do so much against serious floods, and they would rather preserve the cross-subsidy system indefinitely. The impetus to return to a free market and push responsibility onto individuals is coming from Ministers with an ideological axe to grind, notably Owen Paterson. Perhaps his dream is for everyone to adopt the enterprising outlook of the Somerset millionaire who tried defending his mansion from flooding by building his own private moat.

In a civilised society, would it not be more sensible to pool our risk collectively? We have a social security system, after all, that provides (for now) a safety net against involuntary unemployment, sickness and destitution. As climate change increases the number of households at risk of flooding - through no fault of their own - we should surely seek to provide them with a modicum of environmental security. This requires governments to accept that paying for flood defences is a public good that they can’t shirk, and that climate change necessitates this investment to rise over time. Of course, austerity-minded Chancellors are unlikely to swallow this readily. But perhaps two things can help persuade them.

The first is that governments need not spend this money indefinitely, if they pull their fingers out in tackling climate change in the first place. We know that it will cost much less to cut emissions than to adapt to the consequences. The more fossil fuels we burn, the more it will flood, so prevention is obviously better than cure.

The second is that the rising numbers of households being put at flood risk could come together as a serious political force. They are in the frontline of climate change impacts in the UK, and as they come to realise this, it seems highly unlikely they will remain quiet for long. Divided, they are like so many stranded homes facing rising floodwaters; united, they could constitute an unstoppable tide for change.

Guy Shrubsole is energy campaigner at Friends of the Earth.

Photo: Getty Images/AFP
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Is Yvette Cooper surging?

The bookmakers and Westminster are in a flurry. Is Yvette Cooper going to win after all? I'm not convinced. 

Is Yvette Cooper surging? The bookmakers have cut her odds, making her the second favourite after Jeremy Corbyn, and Westminster – and Labour more generally – is abuzz with chatter that it will be her, not Corbyn, who becomes leader on September 12. Are they right? A couple of thoughts:

I wouldn’t trust the bookmakers’ odds as far as I could throw them

When Jeremy Corbyn first entered the race his odds were at 100 to 1. When he secured the endorsement of Unite, Britain’s trade union, his odds were tied with Liz Kendall, who nobody – not even her closest allies – now believes will win the Labour leadership. When I first tipped the Islington North MP for the top job, his odds were still at 3 to 1.

Remember bookmakers aren’t trying to predict the future, they’re trying to turn a profit. (As are experienced betters – when Cooper’s odds were long, it was good sense to chuck some money on there, just to secure a win-win scenario. I wouldn’t be surprised if Burnham’s odds improve a bit as some people hedge for a surprise win for the shadow health secretary, too.)

I still don’t think that there is a plausible path to victory for Yvette Cooper

There is a lively debate playing out – much of it in on The Staggers – about which one of Cooper or Burnham is best-placed to stop Corbyn. Team Cooper say that their data shows that their candidate is the one to stop Corbyn. Team Burnham, unsurprisingly, say the reverse. But Team Kendall, the mayoral campaigns, and the Corbyn team also believe that it is Burnham, not Cooper, who can stop Corbyn.

They think that the shadow health secretary is a “bad bank”: full of second preferences for Corbyn. One senior Blairite, who loathes Burnham with a passion, told me that “only Andy can stop Corbyn, it’s as simple as that”.

I haven’t seen a complete breakdown of every CLP nomination – but I have seen around 40, and they support that argument. Luke Akehurst, a cheerleader for Cooper, published figures that support the “bad bank” theory as well.   Both YouGov polls show a larger pool of Corbyn second preferences among Burnham’s votes than Cooper’s.

But it doesn’t matter, because Andy Burnham can’t make the final round anyway

The “bad bank” row, while souring relations between Burnhamettes and Cooperinos even further, is interesting but academic.  Either Jeremy Corbyn will win outright or he will face Cooper in the final round. If Liz Kendall is eliminated, her second preferences will go to Cooper by an overwhelming margin.

Yes, large numbers of Kendall-supporting MPs are throwing their weight behind Burnham. But Kendall’s supporters are overwhelmingly giving their second preferences to Cooper regardless. My estimate, from both looking at CLP nominations and speaking to party members, is that around 80 to 90 per cent of Kendall’s second preferences will go to Cooper. Burnham’s gaffes – his “when it’s time” remark about Labour having a woman leader, that he appears to have a clapometer instead of a moral compass – have discredited him in him the eyes of many. While Burnham has shrunk, Cooper has grown. And for others, who can’t distinguish between Burnham and Cooper, they’d prefer to have “a crap woman rather than another crap man” in the words of one.

This holds even for Kendall backers who believe that Burnham is a bad bank. A repeated refrain from her supporters is that they simply couldn’t bring themselves to give Burnham their 2nd preference over Cooper. One senior insider, who has been telling his friends that they have to opt for Burnham over Cooper, told me that “faced with my own paper, I can’t vote for that man”.

Interventions from past leaders fall on deaf ears

A lot has happened to change the Labour party in recent years, but one often neglected aspect is this: the Labour right has lost two elections on the bounce. Yes, Ed Miliband may have rejected most of New Labour’s legacy and approach, but he was still a protégé of Gordon Brown and included figures like Rachel Reeves, Ed Balls and Jim Murphy in his shadow cabinet.  Yvette Cooper and Andy Burnham were senior figures during both defeats. And the same MPs who are now warning that Corbyn will doom the Labour Party to defeat were, just months ago, saying that Miliband was destined for Downing Street and only five years ago were saying that Gordon Brown was going to stay there.

Labour members don’t trust the press

A sizeable number of Labour party activists believe that the media is against them and will always have it in for them. They are not listening to articles about Jeremy Corbyn’s past associations or reading analyses of why Labour lost. Those big, gamechanging moments in the last month? Didn’t change anything.

100,000 people didn’t join the Labour party on deadline day to vote against Jeremy Corbyn

On the last day of registration, so many people tried to register to vote in the Labour leadership election that they broke the website. They weren’t doing so on the off-chance that the day after, Yvette Cooper would deliver the speech of her life. Yes, some of those sign-ups were duplicates, and 3,000 of them have been “purged”.  That still leaves an overwhelmingly large number of sign-ups who are going to go for Corbyn.

It doesn’t look as if anyone is turning off Corbyn

Yes, Sky News’ self-selecting poll is not representative of anything other than enthusiasm. But, equally, if Yvette Cooper is really going to beat Jeremy Corbyn, surely, surely, she wouldn’t be in third place behind Liz Kendall according to Sky’s post-debate poll. Surely she wouldn’t have been the winner according to just 6.1 per cent of viewers against Corbyn’s 80.7 per cent. 

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