Public Disorder: Compensation — Question

– in the House of Lords at 2:39 pm on 13th March 2012.

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Photo of Lord Naseby Lord Naseby Conservative 2:39 pm, 13th March 2012

To ask Her Majesty's Government what proportion of victims of the 2011 summer riots are still awaiting compensation, and what action they propose to take to deal with the situation.

Photo of Lord Henley Lord Henley The Minister of State, Home Department

My Lords, around 90 per cent of businesses and individuals affected by the riots were insured and the majority have received full or part payment. For those without insurance, the Government set up a claims bureau to manage their claims under the Riot (Damages) Act 1886. As of February 2012 over half of all valid uninsured claims have been settled.

Photo of Lord Naseby Lord Naseby Conservative

My Lords, the position on dealing with the domestic claims seems to be pretty reasonable. On the business side, however, the position is not quite so healthy. In particular, is my noble friend aware that the Riot (Damages) Act 1886 requires the police to clear with the insurers that it was technically a riot before full payment can be made? To the best of my knowledge that has not happened yet. Secondly, there is no provision in the Act for payment for business interruption. Finally, the businesses that have suffered greatly have to seek planning permission for rebuilding. Can my noble friend ensure that the police act under the 1886 Act; that some help is found for those who have suffered from business interruption; and that local authorities are asked to speed up the planning process and not charge any of those who apply for such planning permission?

Photo of Lord Henley Lord Henley The Minister of State, Home Department

My Lords, my noble friend has asked quite a number of questions. Although I can assure him that we have urged the police authorities to ensure that compensation is paid as swiftly as possible to all those who are entitled, we want to make sure that it is paid only to those who are entitled. He is right to address the point that the 1886 Act-which, obviously, was passed some time ago-does not cover business interruption. That is why we think that there should be a review of the Act, and we will consider all options in due course. As I stressed earlier, we believe that some 90 per cent of those who suffered, whether businesses or otherwise, had insurance, and as likely as not that insurance would have included business interruption. The 1886 Act comes from another era when these matters were not considered. As for the planning point, I will take that on board and consult colleagues in the Department for Communities and Local Government.

Photo of Baroness Sherlock Baroness Sherlock Labour

My Lords, I declare an interest as a member of the Riots Communities and Victims Panel. The Minister has just told the House that 90 per cent of individuals making claims to insurance companies have been paid, and the Association of British Insurers has a similar figure-85 per cent-for small businesses, and yet only half of those claiming under the RDA have been paid. Can the Minister account for the difference? Does he think there is any truth in the rumour that the reason there is such a big difference is that police authorities are setting such a high standard for the evidential basis and the paperwork, which is way in excess of that required by commercial insurance companies? Does he think that that is causing the delay?

Photo of Lord Henley Lord Henley The Minister of State, Home Department

My Lords, the noble Baroness makes a valid point, and I pay tribute to the work that she did earlier on these matters. However, it is also important to look at the fact that those who were not insured were the sort of people who probably did not have adequate records about what they had in their shops-and I am thinking particularly of shops-and one therefore needs to conduct the loss-adjustment process very carefully. As she will know, people often make what one might describe as overgenerous claims when they do not have the appropriate records of what they had in their particular shop or business, and those things need to be looked at carefully. However, as I made clear in my response to my noble friend, it is important that we make sure that the police deal with these matters as quickly as possible. That is what we have been urging them to do and that is why we have set in motion a number of measures to speed up the process.

Photo of Lord Elystan-Morgan Lord Elystan-Morgan Crossbench

My Lords, can the Minister assure the House that in the review of the 1886 Act not only will great effort go into defining the categories of claimants and types of claim but anxious thought will be given to the most central and existential question of whether it should be police authorities that bear the full responsibility for such damages, bearing in mind that the society in which we now live differs very greatly from that of 1886?

Photo of Lord Henley Lord Henley The Minister of State, Home Department

My Lords, when I first answered this Question I was keen to emphasise that it was an 1886 Act. For that reason, the noble Lord is right to emphasise that we are in a very different world from 1886-it is now 125 years on from that date. All I can say about the review is that we will consider all options for reform. Perhaps I may give just one example. The 1886 Act, quite obviously, did not look at damage to motor vehicles, for the very simple reason that they did not exist in 1886.

Photo of Lord Cotter Lord Cotter Liberal Democrat

My Lords, setting aside the issues about loss adjusters and suchlike, did not the Government announce in August that there would be £20 million to support small businesses and help them with minimum bureaucracy? Although these issues are being followed up, is it not very unsatisfactory that, in the mean time, this fund has not been dipped into sufficiently quickly? Exactly how much has been paid out under that fund?

Photo of Lord Henley Lord Henley The Minister of State, Home Department

My Lords, I cannot answer my noble friend's point absolutely but I can say that the Government have made payments of over £71 million to police authorities in respect of both operational costs and riot damages claims. Obviously, as I have been trying to make clear in the course of this Question, we are concerned about the speed which this has been dealt with. That is why we have been urging the police authorities to deal with these matters as quickly as possible. I can give an assurance to my noble friend that, on top of that, my right honourable friend the policing Minister has seen representatives of both the policing authorities and the insurance companies to make sure that these matters are dealt with as quickly as possible.