Government accused of 'stealth tax' over flood home insurance levy

Government plans for a ‘flood levy’, which could add up to 10% on home insurance bills, is already facing stiff opposition.

Environment Secretary Caroline Spelman revealed she was in talks with insurers to find a solution over flooding, and the prospect of a levy is at the centre of current talks.

But today, the backlash was already beginning, with the Council of Mortgage Lenders expressing its concerns over rising home insurance policies, according to the Daily Telegraph.

Meanwhile, Brokerbility chairman Ashwin Mistry labelled the plans a ‘stealth tax’.

He told the newspaper: “Should we be subsidising all those in flood zones continuously rather than dealing with the long-term problem?”

“The extra cost would range from anything from £10 to £20 more per policy on top of everything else.

“It’s another tax by stealth, rather than addressing the critical issue of climate change and better infrastructure.”

However, the plans have been welcomed by insurers.

Ageas chief executive Barry Smith commended the government’s levy idea, but said much more work needed to be done.

“Of course, we will continue to cover our customers as that detail is being worked through,” he said.

“The last few weeks of flooding across the country have shown that this continues to be a very real problem for many communities and today’s report from the Committee on Climate Change reinforces the need to create a joined up government policy on flood insurance, investment in flood defences, building regulations and planning to tackle this issue effectively.”