Wednesday, March 30, 2011

Liberal Democrats plan to abolish Council Tax for the poorest pensioners #sp2011

Single pensioners with incomes of less than £10,000 would not have to pay any Council Tax at all under Scottish Liberal Democrat plans to be announced today. It's also hoped that this would be extended to pensioner couples with an income of less than £15,000, which is around the Pension Credit amount for a couple.

That sort of targetted support is going to make a huge difference and shows Liberal Democrat instincts to give meaningful, practical help to those who need it most.

It would mean a saving of £400 from a typical Band D bill, which compares well with the £22 the same pensioner would save under the Council Tax freeze and £200 under the Conservative plans to give all pensioner households, even those who have whacking great occupational pensions, I guess like Bill Aitken, the Tory Justice spokesman who is retiring, to benefit.

In the long term, we still want to introduce a Local Income Tax, but think it's sensible to wait until the Calman changes to the tax system are bedded in before we do so. There's only so many changes a government IT system can take, so that seems to me to be supremely sensible.

This policy mirrors our UK policy to raise the tax threshold to £10,000 now being gradually implemented by the UK Coalition. Scottish pensioners would get a head start on that as far as their Council Tax is concerned.

I know that Councillors might worry about even more pressure on their finances if they aren't getting money from pensioners but they will not be any worse off as the Scottish Government will make up the shortfall.

I have to say I'm thrilled with this policy. The Council Tax is fundamentally unfair and takes scant account of ability to pay. This is a measure which will help particularly widowed women who don't get a full state pension because they spent their time raising their families. It's important to remember that even when I was born in the late 60s, it wasn't usual for women with children to be in paid employment. My mother went back to work when I was six months old, but she was very much in the minority of my friends' mothers. In fact, even in the early 70s, I remember a former colleague telling me, women working in the civil service had to get permission to stay in their jobs if they married, let alone had kids. It wasn't until the late 70s that the Government introduced Home Responsibilities Protection which meant that those who stayed at home to raise families didn't lose out because of that.

The absolutely shattering thing I found out when reading about this change is that a third of Scottish single pensioner households have incomes of less than £10,000. That's less than £200 a week. Under the current system, a single pensioner living in a Band D house gets some help, but still has to pay out £406 annually. That's over £40 a month out of an income of less than £800 when she has to feed and clothe herself and heat her house too. Under the Liberal Democrat plans she would pay nothing in Council Tax. It's not going to solve all her financial strains, but it will help.

The Liberal Democrats will be campaigning in this election to end high public sector bonuses and to help the poorest pensioners. Those priorities are absolutely spot on.


Anonymous said...

While this is good politics, and not something I have a problem with per se, I do think it is a distraction.

The more exemptions we make in council tax the more unweildy it becomes, fundamental reform should be the priority; fiddling around the edges will just increase the cots of the whole process.

And, really, I am not sure that in our society pensioners are the worse off, or the most in need of support.

For a start a pensioners earnings may not be a fair representation of his or her wealth. 10k is plenty if you don't have any housing costs for instance.

In terms of the numbers I defy anyone to look at some of the statistics here:
and here:
and conclude that it is pensioners we shoudl be looking at.

Succesive governments have focused on this group, and the labour govt, and the back end of the last Tory government, made astounding progress, but in that time households with children have only become marginally less likely to be impoverished. Households without children or dependents have actually goten more likely to fall into poverty.

Anonymous said...

Is this a libdem "pledge"? Pensioners have watched the betrayal of students, they won't be stupid enough to fall for one of the libdems massive, fat lies.


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