PM refuses to say he will halt job losses at Environment Agency or commit new cash for flood defence schemes

David Cameron has refused to say he will halt job losses at the Environment Agency or commit any new cash for major flood defence schemes, despite promising money would be "no object" in the coalition's drive to help families and businesses to cope with the extreme weather.

The prime minister announced grants of £5,000 for households to improve their flood protection and 100% relief on business rates for three months for firms affected by flooding. There will also be a £10m aid fund for farmers whose fields are under water.

But pressed on cuts at the Environment Agency, Cameron three times declined to say he would stop about 500 jobs in flood risk management being lost as the body is forced to make savings. He also defended the government's current level of spending on flood defences, despite warnings from the committee on climate change that there is a £500m shortfall.

Labour said there was a growing list of questions about the truth behind the prime minister's commitment that money is no object in the relief effort.

Cameron was tackled by Ed Miliband who called for more money to be spent on major projects to protects homes and businesses being flooded.

"On the issue of spending on flood defence, the committee for energy and climate change says we are spending significantly less in flood defence than we should," the Labour leader said.

"My question is a simple one: given yesterday's promise to make sure we have a resilient country for the future and spend whatever it takes, are you committing now to reconsider these redundancies, and reconsider the amount of money we invest in flood defences?"

The prime minister said: "We are spending £2.4bn over the four-year period between 2010 and 2014, and that compares with just £2.2bn in the previous four-year period.

"What I can say to the house, and I think this is important, is that as the waters recede it will be important for the Environment Agency, for local authorities all to look again at the flood patterns we have seen, at the models they have and work out what fresh flood defences will be necessary."

Labour has accused the government of fiddling the figures on its flood protection spending, as Cameron's numbers include private money as well as coalition funding.

After prime minister's questions Cameron's aides said any of the 5,700 houses affected by flooding would be able to apply for a grant of up to £5,000 to make their homes more resilient in the future, making the government liable to up to £28m. The government suggested homeowners, regardless of their council tax band, could apply for grants to build water gates.

Cameron also said local councils would be able to offer business rate relief of up to three months, recoverable from central government. Businesses will also be able to apply for a three-month deferral of VAT, PAYE and council tax.

A £10m fund is being set up, administered by the Department for Environment, Food and Rural Affairs (Defra), that will help farmers with the cost of clearing up flood debris or repairing access routes.

Banks including RBS, Barclays, HSBC, Lloyds and Santander have said they will set aside £750m to help support victims of flooding. It is not clear if this money is just to help with loans or will involve grants.

The prime minister's office said £31m would be available for reconstructing the rail lines in the south-west, but it emerged that this is the same money the government offered to the south-west a year ago.

Whitehall sources said the cash would have to be found from contingency budgets in government departments.

Speaking in the House of Commons, Cameron said there would be no "penny-pinching" for people with water lapping at their doors, and they would get help from the military, sandbags, and repairs for broken flood defences.

His comments came after Patrick McLoughlin, the transport secretary, emphasised that extra money would be available for aid where necessary, but it was not a "blank cheque" for future flood protection.

Cameron told the Commons: "To be fair to the transport secretary this is what he said this morning: 'Money is not the issue while we are in this relief job.' That's what he said. He is absolutely right."

Miliband also accused the government of failing communities by sending in the military days after floods had hit in Somerset and the Thames Valley. He urged the government to act more quickly next time, amid warnings of more severe rainfall and winds as well as the potential for flooding along the rivers Severn and Wye.

The prime minister insisted the military had always been on hand to help at the beck and call of those co-ordinating the emergency response.

"It has always been possible for gold commanders in these emergency situations to call on military assets," he said. "Indeed a military liaison officer is supposed to sit with those gold commanders and liaise with them.

"What we have done in recent days is say very clearly to all the local authorities concerned, and we have contacted them individually: 'If you want military assistance, don't think twice about it, think once, then ask, and they'll be there.'"

As attention turns to the cost of recovering from the floods, Cameron has chaired another meeting of the Cobra emergency committee accompanied for the first time by George Osborne, the chancellor.