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PM appeals over floods insurance
11/10/07
The Prime Minister has appealed to insurers to continue offering cover to people in high flood risk areas after the industry reacted angrily to flood defence spending.

The Association of British Insurers (ABI) accused the Government of letting down millions of homeowners and businesses by failing to give enough money to help prevent floods.

It also warned that the shortfall in money announced in Tuesday's Comprehensive Spending Review could leave homeowners in areas at risk facing more trouble insuring their properties.

Before this summer's floods, the ABI had already called for the Government to spend 2.25 billion on flood defences during the coming three years. But Chancellor Alistair Darling announced spending between 2008/2009 and 2010/2011 would total just 2.15 billion.

The trade association said the announcement showed the Government had "completely failed to grasp the importance" of improving the country's flood defences in the wake of this summer's floods.

Stephen Haddrill, the ABI's director-general, said: "The insurance industry is helping tens of thousands of people affected by flooding this summer, but the Government has now failed to play its part."

But speaking at Commons question time Gordon Brown insisted that differences with the industry over spending were "very small" and that the Government was doing everything it could to improve defences.

He also appealed to insurers not to deny cover to people at risk of flooding. He said: "I hope they will not take the step to deny people insurance."

Meanwhile the head of the Environment Agency, Barbara Young, welcomed the increase in spending on flood defences, but warned more money would be needed to provide protection from floods and the risks posed by climate change.

Of the plans to spend 800 million a year by 2010 on flood defences, Baroness Young said: "It's not Christmas and birthday yet, it's good but it's not the end of the road."

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