This group of amendments is mainly to do with flood insurance measures, and includes the Government’s response to the recommendations on flood insurance from the Delegated Powers and Regulatory Reform Committee. It also includes a small number of minor changes.
Lords amendments 70, 75, 81 to 83 and 91 to 95 are in response to the Delegated Powers Committee’s recommendations on the flood insurance measures. The amendments include changing the scrutiny procedures so that the affirmative resolution procedure is used for all regulations—in certain cases on first use only—and placing some definitions in the Bill.
We agree with the Delegated Powers Committee that the definitions are important. However, it was not possible to include all of them in the Bill as they require further consultation and, in the case of “relevant insurer”, have separate meanings for Flood Re and for the flood insurance obligation—the alternative proposal. By defining those terms in regulations that will be subject to the affirmative procedure, Parliament will be able to fully scrutinise these definitions in due course.
The Delegated Powers Committee also recommended that the powers to make regulations to provide for the sharing of council tax data should be subject to the affirmative procedure. However, to meet the commitment to establish Flood Re in 2015, we need to release the council tax information as soon as possible after Royal Assent to ensure that IT systems can be put in place. Lords amendments 77 to 79 place that data- sharing power in the Bill. I hope that hon. Members will see that that is necessary owing to the challenging timetable to deliver Flood Re. Lords amendments 74, paragraph (ab) to amendment 93 and amendment 100 make consequential changes based on the new power. Although that power does not mandate the release of data, the Government are committed to doing so. They also give a power to add to the list of data releasable in the future. If we do that, the powers also allow for the application of a criminal sanction—for example, where the additional information is of a particularly sensitive nature warranting the protection of a criminal sanction for misuse. It is right that we have powers to protect the release of public information, but the sanction is not automatic and we will consider whether one is necessary following consultation.
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I wish to turn briefly to another Lords amendment on the subject of Flood Re’s reserves. To ensure that the power set out in clause 54 cannot compromise the sound operation of Flood Re and its orderly management, a small change was made to make it clear that the scheme administrator’s consent is to be sought first if regulations are proposed to be made requiring reserves to be paid to Government. That consent means that the scheme administrator is able to object to any prudentially unsound proposals, as well as to make representations on the retention of some or all of the reserves; consequently, there is no longer a need to consult the Prudential Regulation Authority as well. Members can be assured that the Prudential Regulation Authority will continue to be closely consulted on this and all other regulations made in relation to the Flood Re scheme.
Lords amendment 72 allows the Secretary of State to require Flood Re, through regulations, to provide information for relevant insurers to pass on to their policyholders who will benefit from Flood Re. We expect the information to cover the Flood Re scheme, flood risk and the actions householders can take to reduce the risk and impact of flooding.