Floods: 'Money is no object' becomes 'No blank cheque'

DAVID CAMERON'S pledge that “money is no object” in dealing with the flooding crisis is already unravelling, with Downing Street having to brief that there is “no blank cheque”.

With Britain facing a month’s rain in 24 hours today, Whitehall spin doctors are already frantically rowing back from the Prime Minister's apparently open-ended commitment to make unlimited funds available for flood relief.

He told a press conference at Downing Street yesterday: "Money is no object in this relief effort. Whatever money is needed for it will be spent... We are a wealthy country, we have a growing economy. We will spend what is necessary."

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Twenty-four hours later, a shower of cold water has taken the shine off the PM’s sunny promises and it is beginning to emerge that the apparently unlimited funds will likely turn out to be pretty small beer.

Patrick McLoughlin, the Transport Secretary, refused to say whether any of the money promised by Cameron for repairing the flood damage to major road and rail links including the mainline through Dawlish would be “new money”, that is additional to the existing transport budget.

Nick Robinson, the BBC's political editor, reckons £60 million earmarked for repairing the transport infrastructure is merely the sum that the Transport Department has underspent at the end of its budget for the current financial year, which ends in April.

"All that will be going on will be the Chancellor saying you can spend it," said Robinson on Radio 4's Today programme. "I am told the phrase going round Whitehall today is 'no blank cheque'. Well it sounded as though there was a blank cheque when I was in the press conference… It was a big phrase [by Cameron]".

The victims of flooding are likely to be disappointed, too. Cameron gave the impression that the government would underwrite insurance for those unable to get it because of past flooding.

But Huw Evans, deputy director general of the British Insurers Association, confirmed the “gentleman’s agreement” for insurance cover for places hit by floods reached with the government last year excludes all pubs, all small and medium enterprises and any house built after 2009.

Furthermore, the scheme, which is designed to give access to insurance for those households who cannot get flood insurance, is aimed at the 300,000-plus households who are “most at risk”. But that raises questions about the many thousands more households who never expected to be swamped but who may not now be able to get cover. Will the government underwrite the insurance for the whole of the Thames Valley and the Somerset Levels?

The Prime Minister's pledge that householders who have been swamped will be able to get relief funding is also likely to turn out to be a disappointment for many.

Cameron is promising to make the money – “whatever it takes” – available through local councils. But the money will come from an existing “hardship fund”. Householders will therefore have to prove they are in financial hardship before they can get such help, and it is unclear how generous the means test will be.

So far, the government has committed an extra £130 million for flood defences once the waters recede. There will be £10 million at DEFRA for farms and farmers hit by the floods and £60 million for the Department of Transport, plus grants of around £5,000 for households to carry out work for “resilience” against future floods, such as raising electricity cables above the floodwater level. That doesn’t sound like the opening of the financial floodgates.

The victims are not the only ones who are going to be asking questions about the meaning of Cameron’s promise that “money is no object”.

His Downing Street declaration raises much wider questions about the need for the austerity cuts in welfare, such as the proposed cut in housing benefit for the under-25s and the hated “bedroom tax” which cuts housing benefits to tenants in social housing with spare rooms.

Ruth Davison, policy director of the National Housing Federation, told the Today programme that 66 per cent of tenants affected by the “bedroom tax” were now in arrears.

Cathy Newman on Channel 4 News last night highlighted the case of a woman aged under 25 who reckons housing benefit enabled her to get a successful career.

Victims of the benefit cuts are bound to ask why, if Cameron now says we are a “wealthy country”, do we need to continue with austerity cuts beyond the 2015 general election? His bold promise is beginning to look like an albatross around his neck.

So why did the PM make such a claim? The answer is purely political. He said Britain was a “wealthy country” in order to answer the populist demands by the Daily Mail and Ukip for the overseas budget to be raided for flood relief in Britain. Cameron insisted that we had enough money, thanks to a growing economy, to afford our own flood relief without taking it from the starving or the flood victims in places like Bangladesh.

He also needed to grab back the initiative over the flooding chaos, after a week in which the government’s cohesion was falling apart in bickering between Environment Secretary Owen Paterson, Communities Secretary Eric Pickles and the Environment Agency chairman, Labour peer Chris Smith, over who was to blame for a failure to act earlier.

And it seems to have worked, in the short term at least. Even The Guardian’s political editor Patrick Wintour today described the Prime Minister as “resolute” - an adjective you don’t often see applied to Cameron in that paper.