Budget targets insurance premiums to raise £700m for flood-hit regions

Chancellor earmarks funds from small rise in insurance premium tax to help regions ravaged by floods over the winter

The UK regions hit by the winter floods are set to benefit from an extra 700m to boost flood defences, after the chancellor announced another rise in insurance premium tax and earmarked the cash raised to flood-damaged towns.

George Osborne said he would hike the standard rate of IPT by half a percentage point to 10%, and use the proceeds to top up a fund designed to prevent repeats of the carnage that afflicted communities in the north of England and Scotland over the winter. It is the second time in recent months the chancellor has increased IPT. In November it was hiked from 6% to 9.5%.