Government committed to three million new homes, with 30% on brownfield sites

Insurers stepped up the pressure on the government this week after prime minister Gordon Brown announced further house building on flood plains.

The government committed itself to three million new homes with 30% on brownfield sites. Nick Starling, the ABI’s director of general insurance, said: “We need to take account of the increasing risk of flooding and to ensure sustainable communities. New homes should not be built in high-risk areas of the floodplain.”

The ABI also reacted angrily to announcements that the government would increase flood defence budgets from £600m to £800m a year by 2011. “That is what we have been arguing for but not by 2011. What about now?” an ABI spokesman said.

In his previous role as chancellor, Gordon Brown cut £14m from flood defences.

Insurers first discussed floods with the government in October 2000. The ABI’s statement of principles in 2002 agreed insurers would continue to provide cover if the government put in sustained investment in flood defences, streamlined complex flood management and tightened up regulations to make sure homes were built away from flood plains.

After complaints that planning applications were granted despite Environment Agency (EA) concerns, the ABI forced the government to make it compulsory for the EA to be consulted on all planning proposals. Housing Minister Yvette Cooper said the government was “prepared to take over those decisions ourselves”.

Insurers are also unhappy with the quality of information the EA provides on flood risks. The ABI has a meeting with the agency to discuss this issue next month.

The ABI is also demanding action on drainage – the floods in Hull were caused by poor drainage not flooding rivers. “We are calling for more investment and the renewal of older drains especially,” the ABI said.

The Conservatives claimed that geographical analysis of the government’s plans show that in some areas more than one in ten of the new homes would be on high risk flood plains.

Shadow housing minister Grant Shapps said: “There is no point building affordable homes if those homes then become unaffordable due to sky high insurance premiums.”