FLOOD victims in North Yorkshire who are left unable to live in their homes will save money on their council tax bills, the Government has announced.

Housing Minister Nick Raynsford said he was awarding councils across North Yorkshire discretionary powers to reduce bills.

Unless all the furniture has been removed, flood victims still have to pay full council tax at present - even though water damage has made their home uninhabitable.

This is despite the fact they may also be paying council tax on their temporary accommodation.

The issue was brought to the attention of ministers during Autumn 2000, when floods devastated large parts of the county. Mr Raynsford said, as a result, councils would now be able to "create their own discounts and exemptions".

He said: "These additional powers could be used to address local hardships, such as flooding and other natural disasters."

The size of the council tax discount will be up to individual councils.

Mr Raynsford also confirmed councils would be allowed to scrap the 50 per cent discount enjoyed by landlords who left their properties empty. But he surprisingly watered down plans to allow councils to end the council tax rebate on second homes. Mr Raynsford said people who owned holiday homes should continue to receive a small saving on their bill. Councils would only be able to charge them up to 90 per cent of the rate paid by full-time residents.

Officials from the Office of the Deputy Prime Minister said people needed an incentive to admit the property was a "second home".

They suggested that - if they were forced to pay their council tax in full - some second home owners may try to pretend it was their full-time residence.

Mr Raynsford said: "High demand for second homes may affect property prices, forcing local people to look elsewhere. We are especially concerned about the impact this trend may have for local people on low incomes and key workers, who are vital to the long-term sustainability of our communities."

But he said it was important to recognise second home owners "contribute strongly" to the local community as well.

Julie Wright, accountancy manager at City of York Council, said: "Whether we go ahead with this or not is open to debate, but most of it does seem positive.

"As a council, we would welcome most of the proposals, particularly having more discretion over council tax collection."

Updated: 10:06 Thursday, November 21, 2002