HC Deb 23 November 1995 vol 267 cc237-8W
Mr. Dobson

To ask the Secretary of State for the Environment what would be the effect of a 4 per cent. increase in council tax on(a) the total yield of council tax in Great Britain, (b) the total yield of council tax in England, (c) the average bill in England, (d) council tax benefit, (e) the retail prices index and (f) index linked benefits. [1478]

Mr. Gummer

[holding answer 21 November 1995]: The information relating to Wales and Scotland is the responsibility of my right hon. Friends the Secretaries of State for Wales and Scotland.

If council taxes in England had increased in 1995–96 by an additional 4 per cent. compared with actual levels, the approximate effect is estimated as follows:

  1. (b) Gross yield of council tax: increase of £390 million.
  2. (c) Average Band C bill, before Council Tax Benefit or Transitional Relief: increase from £541 to £563.
  3. (d) Council tax benefit: increase of £85 million.
  4. (e) The increase would add around 0.1 percentage points to the percentage change over 12 months in the all items retail prices index.
  5. (f) The precise effect on those benefits linked to the retail prices index would depend on whether this marginal change was sufficient to trigger an increase in benefit levels. As an approximate guide, an additional 0.1 percentage points on the rate of inflation would add around £40 million to the cost of those benefits in a full year. There would be no effect on those income related benefits which are usually linked to the Rossi index.