Council Tax (Hansard, 18 May 2004)

§ Ruth Kelly

Recent figures show that there were 5.2 million households in 2002–03 who paid more net council tax than income tax; in 1997–98 there were 4.8 million. The majority of these are pensioner 885W households 65 per cent. of whom pay no income tax or only pay income tax at 10 per cent., and all of whom benefit from higher age related income tax allowances. The Government have increased the aged personal allowances by at least 7.7 per cent. in real terms since 1997. No pensioner aged 65 or over will pay income tax on income of less that £131 a week in 2004–05.

Council tax benefit (CTB) exists to help those on low incomes with their council tax bills. However, many of those eligible for CTB do not claim their entitlement. The Government have therefore been running a campaign alongside local councils to boost take-up. A tailored claim form has been introduced for pensioners; the restriction on the amount of CTB for those people living in Band F, G or H properties was removed in April 2004.

Council tax consumes a greater proportion of the incomes of older pensioners—who have little or no opportunity to increase their incomes—than it does for other households. Alongside CTB the Government believe it is right to help older pensioners with their council tax so that pensioner households with someone aged over 70 will this year receive a £100 payment to help with their council tax bills. This is in addition to the winter fuel payment of £200 for all over 60s households, £300 for over 80s households. Furthermore the Government have introduced the pension credit, increased the basic state pension by the higher of 2.5 per cent. or price inflation, introduced free TV licences for households with someone aged over 75 or over—and the free eye test, free prescriptions and concessionary travel for those aged over 60.