Forum Brief: Council Tax reform

Help the Aged and the Royal British Legion have united to call for changes in order to help the elderly pay their bills.

The two charities say that annual increases in council tax unfairly discriminate against older people, whose incomes tend to be fixed or linked to inflation.

A spokeswoman for the Office of the Deputy Prime Minister told ePolitix.com: "We are aware of the plight of many pensioners and we have taken steps to help them, such as the Minimum Income Guarantee, the new pension credit, and winter fuel payment. We have increased the amount of savings pensioners may have while they can still claim income-related benefits, including council tax benefit.

"But it is important to remember council tax is set by local authorities, not central government. Earlier this week we announced that we will not allow sustained rises in tax to continue year on year.

"As for discounts, we are bringing in legislation in the local government bill which will allow local billing authorities to offer extra council tax discounts if they judge this appropriate."

Howard Flight, shadow chief secretary to the Treasury, told ePolitix.com: "Council tax has risen by nearly three times the rate of inflation since Labour came to office because Gordon Brown has cut the amount paid to local councils below what they essentially need to spend to meet the services they are obliged by government to provide.

"This has the greatest effect on those, such as pensioners, living on fixed incomes and shows how little Labour care for the most vulnerable in our society.

"People will judge this government, not by their spin, but by the effect of their policies.

"We've had 60 tax rises under Labour and people aren't seeing the improvement in public services that they expect."

Edward Davey, Liberal Democrat spokesman on the Office of the Deputy Prime Minister, told ePolitix.com: "Council tax is so unfair. No wonder people are screaming about council tax rises - they're painful, and are fleecing the poor and vulnerable.

"Council tax targets the poorest pensioners hardest. No wonder we are seeing anti-council tax protest groups springing up round the country.

"Council tax may have been a Tory tax, but Labour are making it much worse. Scrapping council tax is one of the Liberal Democrats top priorities."

Forum Response: Help the Aged

Richard Wilson, incomes policy officer for Help the Aged, said: "Organisations like ours have been inundated with calls and letters from pensioners angry about above-inflation Council Tax increases, and fearful of the impact of future tax hikes.

"The government needs to act decisively if it wants to stem a growing pensioner rebellion over Council Tax. The New Policy Institute's report makes radical yet practical recommendations that do not cost the earth, and would protect pensioners on low and moderate incomes from tax rises they simply cannot afford."

Forum Response: The Royal British Legion

Terry English, director of welfare at the Royal British Legion, said: "This uncapped rise in council tax is debilitating for our membership, many of whom are on service pensions. They and their dependants will struggle under this increased burden.

"In the last year, service pensions and war pensions were increased by 1.7 per cent, whereas council tax increased in the vicinity of 14 to 18 per cent. With predictions of another similar rise, it's no wonder that our members have urged us to speak out."

Forum Response: Age Concern

Gordon Lishman, director general of Age Concern, said: "Age Concern welcomes this report by Help the Aged and The Royal British Legion.

"Many pensioners have felt the strain of council tax increases, which in some areas has risen at four times the rate of inflation. Council tax is a particular struggle for more than a million older people who potentially fail to claim council tax benefit and also for 'asset rich, cash poor' pensioners.

"People who live on a relatively static income are always going to be hit hardest by council tax. We need a more adequate basic state pension which provides enough to cover day-to-day living costs."