Householders in the Falkirk district are allegedly paying hefty premiums to keep English homeowners’ flood insurance at an affordable rate.
That’s according to Falkirk East MSP Angus MacDonald, who raised the issue in the Scottish Parliament.
Mr MacDonald said: “Scottish householders are paying for property development in southeast England by contributing to a £200 million a year ‘stealth subsidy’ for insuring buildings in areas at high risk of flooding.
“In order to keep insurance costs down for thousands of home owners on English flood plains, Scottish households are charged higher premiums.”
He added figures from insurance companies estimate one in four households in England, or 23.1 per cent, are at risk of flooding compared to only one in 20, or 4.5 per cent, in Scotland.
Mr MacDonald said this means residents in Grangemouth - who will soon benefit from a £100 million investment in flood defences - could be subsidising flood insurance on properties elsewhere in the UK by as much as £430 per home every year.
He added: “My constituents will not appreciate the fact their premiums may not reflect the reduced risk to their homes.”
Mr MacDonald said it would be far better for Scotland to deal with the Association of British Insurers (ABI) directly.
He said: “Since the Scottish Government does not have the opportunity to take part in negotiations, we will have to continue to make representations on this issue to the UK Government and hope they achieve the best solution possible for Scotland and my constituents in the Grangemouth area.”
The UK Government stated they are now working with the ABI and its members to make sure flood insurance is widely available and affordable.
An ABI spokesman said: “We are now having constructive discussions about how best to achieve that, so ABI members have agreed to continue to meet their commitments to offering flood insurance under the existing industry agreement for one extra month after it expires on June 30 while these complex issues are resolved.
“Everyone agrees what is needed is a scheme that ensures flood insurance remains affordable and widely available.
“While there remain some difficult issues to resolve we aim to conclude negotiations with the UK Government as soon as possible.”