HOUSEHOLDERS in Bewdley should have the cost of house insurance reduced when flood defence works are completed, the Government has insisted.

Many homeowners fear the cost of policies will soar in the wake of last year's catastrophic floods.

Floods Minister Elliot Morley said it was likely some premiums would go up.

But he urged insurers to take into account the efforts which were being made to bolster flood defences - and be prepared to reduce the cost of home insurance as a result.

Work on a multi-million pound project on Severnside North began at the end of last month.

The works will involve the construction of demountable defences erected on permanent foundations, which are specially designed to preserve the character of the area.

Plans for a second phase of works designed to protect Severnside South are being prepared by the Environment Agency.

Mr Morley said that, when works such as these have been completed, policies should go down.

The Minister also said insurance companies should take into account the efforts of individuals to "flood proof" their homes.

He said these should be rewarded in the same way as car owners who take extra security steps to prevent the vehicle being stolen.

Mr Morley told the Environment, Food and Rural Affairs Select Committee: "Insurance companies have put the premiums up in some of the areas that suffered from flooding.

"But in some of these areas they are now getting new defences that will give them a much higher level of flood protection than had previously been the case.

"If the risk is being reduced, then the cost of insurance should fall. It should be a two-way street."

Mr Morley rejected calls for the Government to underwrite the insurance claims of people who cannot get cover elsewhere.

He told the Select Committee this was not the Government's job and that it would actually give insurance companies an incentive to stop providing cover in high risk areas.