News from British and Canadian Conservatives

Monday, July 23, 2007

The rains came down...

In this little corner of the world, it's hard to imagine the misery that people across great swathes of the country are now suffering. From Gloucestershire to Yorkshire there have been deluges, with countless people homeless and without water. The threat to a power station could bring a degree of suffering to a wider audience too. It's true that there were some areas of Folkestone that were flooded a couple of weeks ago. Whilst that will have been traumatic for the isolated few who were affected, the scale can't be compared. Handling such a widespread crisis must be daunting for the authorities - where can you move the displaced to? Many must be miles from home, adding to the inconvenience and misery that they are suffering.

There are some who are already trying to point the blame. Why did local authorities allow homes to be built on flood plains? I think it's easy and tempting to blame someone, but the truth is that it's nature. Wherever you build houses, there are risks. High land may suffer from cliff falls and subsidence. As Folkestone found out earlier this year, there's always the risk of earthquakes. Hurricanes, lightning and tornadoes can strike anywhere. I doubt that there's a square inch of the planet that isn't at risk of multiple natural hazards. We can't control nature, and shouldn't control nature. In truth, nature controls us and we forget that at our peril.

One thing that does concern me is the revelation that many local authorities self-insure. There are times when self-insurance makes sense. For example, Marks & Spencer self insure all of their stores. That makes sense, because they are spread out. It's unlikely that any kind of disaster could befall all, or indeed a significant proportion, of them at once. If such a disaster did occur, we'd be looking at the end of civilization as we know it - which the loss of your local M&S does not constitute! For a local authority to self-insure does not similarly make sense. In Hull, the cost of damage to council properties including schools, housing and much more besides, has been estimated at £200 million. The council has £9 million set aside as part of the self-insurance scheme. I'd like to see local authorities and central government co-operatively insuring. Rather than paying an insurer to offset risk - with all the associated paperwork and daft rules and regulations that result - alll authorities should pay a small amount into a central pot. In the event that the pot does not stretch far enough, the liability should be distributed amongst them. The formula to divide costs would need to take account of the ability to pay (largely defined by the size of the population) as well as the amount insured (dependant on size and level of facilities in the area). The result would be that our elected representatives would regain control over much that the insurance industry effectively controls at present, at the same time as benefitting from the spread risk.

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