TIME is rapidly running out on top-level negotiations aimed at saving people in flood-risk homes from the threat of being left without insurance cover, a North East MP has warned.

Campaigners in Morpeth – where 1,000 homes and businesses were flooded in 2008 – last week wrote to Environment Minister Owen Patterson, calling for urgent Government action to break a “deadlock” in long-running discussions over a new deal for flood insurance.

The Association of British Insurers (ABI) claimed the talks were at an impasse – sparking fears that 200,000 properties in towns like Morpeth could be left without cover next year.

Now Wansbeck MP Ian Lavery has also raised the issue directly with Mr Patterson, amid concerns that home and business owners will face unaffordable increases in their premiums – or possibly lose cover altogether – when the current arrangements expire.

The existing agreement, struck in 2008, obliges insurers to provide cover for at-risk properties, while the Government continues to improve flood defences. Negotiations have been taking place for months in a bid to make sure the arrangement continues after next June.

A working group in Morpeth has devised a model – similar to the solution currently being proposed by the ABI – which involves a national fund to make sure that affordable insurance continues to be available to all who need it. The fund, which would be paid for in a pooled system through a levy on household premiums collected by insurance companies, would handle liability for flood insurance.

Yesterday Mr Lavery said the stumbling block to reaching agreement seemed to be the Government’s reluctance to provide a temporary overdraft facility to allow the scheme to be put in place.

He said Mr Patterson has told him in Parliament that ministers want to secure an affordable system that is not a burden on the Treasury. Mr Lavery said: “My concerns – like those of very many householders and businesses in Morpeth and Hepscott whose property has been flooded – are that while there is plenty of talk from the Government about what it wants to do to help, we are rapidly running out of time for an agreement to be reached that can be put in place by the insurance companies by next June.

“From what we read in press reports, the Government is refusing to provide a temporary overdraft facility to allow the insurance industry time to introduce its not-for-profit scheme, which is not a million miles away from the well thought-out proposals put forward by the Morpeth flood group.

“Something has to be done, and done quickly, to give the peace of mind hundreds of thousands of homeowners and businesses across the country need to ensure they can continue to be able to afford insurance for their properties.

“The scale of the flooding problem in this country has escalated beyond all belief in recent years and Morpeth is just one example of communities being hit time and time again by the distress and devastation of homes and properties being swamped by flood waters.”