Council tax break for 5,000 flood victims: Ministers agree reprieve for thousands as residents and business owners begin to count the cost of Storm Desmond

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Thousands of flood victims will be handed relief from council tax and business rates, it has been announced.

Ministers agreed the tax reprieve at a meeting of the Cobra emergency committee. It is expected to apply to 5,000 homes and businesses, mainly in Cumbria.

Recovering from the devastation caused by Storm Desmond is expected to take affected communities months if not years, with many homes still uninhabitable.

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Ministers agreed a reprieve for council tax and business rates for thousands of flood victims at a meeting of the Cobra emergency committee. It is expected to apply to 5,000 homes and businesses, mainly in Cumbria.

Floodwater was pumped from properties in Carlisle in Cumbria on Tuesday as the big clear up continued

The situation is said to be improving following record rainfall at the weekend but emergency services remain on high alert with further wet weather forecast this week.

Cobra, led by Communities Secretary Greg Clark, heard an update on efforts by the emergency services and the military to make contact with every rural community cut off by the flooding.

Mr Clark said: ‘If you have to move out of your home, or your business is disturbed, you won’t have to pay business rates or council tax until back trading or back in your home.’

He said he had met insurers on Tuesday morning and received a ‘cast iron guarantee that they stand ready and have the capacity to respond straight away to their customers’.

Officials are finalising the details of who will qualify for council tax and business rate relief and how long the waiver will be available.

The cost is expected to run into millions of pounds because the average council tax bill for a band D property in Cumbria will be £1,600 this financial year. David Cameron visited flood-hit communities earlier this week and expressed sympathy with residents.

He said the defences built in Carlisle at great expense ten years ago were not high enough and the impact had been ‘absolutely horrific’.

He is under pressure to help residents access insurance to rebuild their homes, after promising early last year – during floods in Surrey and Somerset – that ‘money is no object in this relief effort’.

Last year, the Government set aside £4million to cover the bill for local authorities waiving council tax bills for around 6,500 homes in England hit by the winter floods.

The total clean-up bill is put at £500million – nearly twice the cost of the last major floods to hit Cumbria in 2009.

Then, the insurance industry paid out £175million of claims, with the total cost reaching £275million.

Accountants PwC calculate insurers could face bills of up to £325million this time with other uninsured damage, such as to roads, pushing the cost to £500million.

Household items destroyed by the flooding brought on by Storm Desmond are pictured outside Carlisle homes

The clear up continues in Carlisle with thousands of residents returning to their homes after Storm Desmond

While more than 5,000 households are thought to have been affected by the floods, it is not yet clear how many of them will put in claims because the cost of insurance has risen since the last floods. Many families are still unable to return home and 1,500 businesses were flooded out.

Rob Johnston, chief executive of the Cumbria Chamber of Commerce, said some smaller firms were also not insured because of the increased cost since the area was hit last time.

He estimated that 4,000 out of the 25,000 businesses in the area had been affected in some way by the floods.

McVitie’s in Carlisle, which employs 640 people, was forced to shut its factory on Saturday evening and would remain closed ‘until further notice’.

Owner United Biscuits said: ‘The local water levels are now starting to subside and once we have clear access, we will be able to update further on a timetable for the clean-up operation and subsequent resumption of production and fulfilment of orders.

Water-damaged possessions sit outside a flooded home in Keswick as residents begin the huge clean-up

Shopkeepers begin the huge clean-up operation in Cockermouth High Street, Cumbria, after the flooding

A garden washed away by Storm Desmond in Cockermouth after waters receded and showed the damage

‘The company greatly appreciates the positive attitude and enthusiastic offers of help from the local employees and their colleagues across United Biscuits to resume business as usual.’

By last night, power had been restored to all homes in Lancashire which lost electricity during the storms.

Residents had spent three days shivering in their dark, and in some cases unheated, homes. Sixty-three generators are now powering 18,000 homes in Lancaster following flood damage at an electricity sub-station.

In Cumbria, the lights were back on with the exception of buildings which have had to be evacuated and left empty because of flooding.

One severe flood warning – at St Michaels in Lancashire – 41 flood warnings and 29 flood alerts remained in place across northern England.

According to the Environment Agency, a band of rain tonight and into tomorrow brings the potential for further disruption across Cumbria.