Budget 2016: Osborne announces £700m flood defence funding

George Osborne has announced £700m of extra funding to increase flood defences across the UK.

The funding, which Osborne said will “boost our resilience” against extreme rainfall events, will be raised by a 0.5% increase to UK insurance premium tax. It will include projects in York, Leeds, Calder Valley, Carlisle and across Cumbria.

The announcement comes after areas in the North of England and Scotland were hit by severe flooding in December last year. Accountancy firm KPMG has estimated that the total damages caused by the flooding in the north of the UK will breach £5bn.

Martin Couchman, deputy chief executive at the British Hospitality Association (BHA) said: “Despite the catastrophic effects of recent flooding, our industry has – and continues to – rally together to support local communities and the people living in them.

“The BHA welcomes the Chancellor’s announcement to support flood struck businesses with the investment in flood defence and resilience measures.”

Meanwhile, more than £230m has been earmarked for road improvements across the north of England, including upgrades to the M62, a new tunneled road from Manchester to Sheffield and an upgrade of the A66 and A69 as part of Osborne’s ‘Northern Powerhouse’ initiative.

Two new rail lines will also get the green light, including the HS3 link between Manchester and Leeds and the Crossrail 2 in London.

James Shorthouse, head of alternative markets at Colliers International, said: “These infrastructure developments will create new opportunities for inward investment and increase the number of visitors traveling to the tourist destinations in the north.

“The new connections will dramatically cut the time it takes to travel and boost tourist numbers to the area making pubs, restaurants, visitor attractions and hotels operators the clear winners.”