Flood tax: how we'll all pay for the government's mistakes

Winter weather Feb 19th

Flood victims have been thrown a small life-ring by the government after the prime minister said the 6,500 families that were forced to leave their homes would not have to pay council tax while their properties are made liveable.

David Cameron has put aside £4 million to give to councils to cover the shortfall. This is all very noble but it's shutting the stable door after the horse has bolted and more importantly it should be pointed out that the heartache and destruction that the flooding has caused could have been avoided, or at least reduced, if the government hadn't cut the budget for flood defences in the first place.

The government was locked in fierce negotiations with the insurance industry over its cuts. There had always been an agreement between politicians and insurers that meant as long as the government put money into flood defence then insurers would keep insuring at-risk homes.

This was put in jeopardy with the cuts and the pair had to come to a new agreement that means a flood risk pot of money is in place, with a government-backed overdraft, that will (hopefully) be built up with insurance premiums from flood-risk policies. The fund will also be topped up by a levy on policies for homes not at risk of flooding. In short, everyone pays.

Of course, that's how insurance works – you pay in the hope you don't have to use it and your premiums cover someone else's bad luck.

But it's infuriating that the insurers (and I'm not often on their side) and homeowners with insurance are having to pay for a problem that the government could have avoided. The extra levy on the policies is essentially a flood tax for homeowners who will pay the cost of repairing the devastation.

The government has a lot of gall acting the hero and waiving council tax. How Cameron can play saviour by telling the assembled TV crews that the cheque book is open to help homeowners leaves a bad taste in the mouth. If he has an open cheque book now why didn't he use the money he has suddenly found to protect people's homes?

Once again, it is easier to let the public pick up the tab through a flood tax rather than fix the underlying problem, before it sweeps through and causes destruction.
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