Parties would axe council tax discount for pensioners (From Daily Echo)

Labour and Lib Dems in Southampton would axe council tax discount for pensioners

12:40pm Thursday 26th April 2012 in Politics By Matt Smith , Politics and business reporter

PENSIONERS in Southampton face a council tax hike if Labour or the Liberal Democrats seize power in Southampton next week, ruling Tories have warned.

Both Labour and Lib Dem opposition parties have confirmed they will remove the controversial 10 per cent council tax discount for some pensioners brought in three years ago by ruling Tories – costing £1m a year.

They argue the current discount is an unfair giveaway that benefits richer pensioners and is subsidised by other taxpayers.

The discount – worth more than £100 on average – is claimed by 8,308 over-65s households in the city who do not get council tax benefit.

Now Conservatives have accused the opposition parties of a “pernicious attack on pensioners”.

Alongside crime, the discount will be among the issues at the top of the agenda for pensioners voting in crunch local elections on May 3 which will decide who runs the council for the next two years.

Two months ago Labour leader Richard Williams said the party wanted to “reallocate the £1,000,000 rich pensioners’ council tax discount to services that help many more elderly and vulnerable people.”

A fortnight later both Labour and the Liberal Democrats unveiled budget plans to cut the discount by half to just five per cent. The move would in effect be a five per cent council tax rise for 8,308 pensioners.

Only the Lib Dems have made specific mention of the reduction in their election campaign manifesto, in a pledge to scrap “unfair discounts for the rich”.

Labour made no mention of the proposed cut in their election manifesto.

But yesterday Labour’s Cllr Williams confirmed to the Daily Echo that his party would look to remove the discount and replace it with unspecified measures to help pensioners.

“For next year, we’ll be looking for ways to change the pensioner discount so it benefits those that really need it,” he said.

“At the moment it gives most to those that have most. Ten per cent off the tax on a five-bedroom house is worth much more than 10 per cent off the tax on a one-bedroom flat.”

Lib Dem group leader Adrian Vinson, who could hold the balance of power in a hung council, said his party would not support the overnight abolition of the discount but would back it being phased out in future years to protect other services for older people.

He said: “We would wish to investigate ways in which the interest of less well-off pensioners could be protected. Our principle concern is not everybody is in hardship, even pensioners.”

Don Harper, from the Southampton Pensioners Forum, said the discount benefited the “poorest pensioners” who had an income, or savings above £16,000, too high to qualify for council tax benefit but were still struggling to get by.

He said: “With the way prices are going up, if we don’t get the discount I’m sure a lot of people would have to think hard about heating and food bills.

“We lost up to £100 a household in cuts to the heating allowance. The council tax discount made up for that.”

Mr Harper added: “Some people have got this idea that because a lot of us own our own houses we are rich. It’s not true.”

But Christine Melsom, from the IsItFair council tax campaign group, said that while many of her members appreciated the discount, it was unfair.

She said: “Pensioners are struggling, but they are not the only ones. We must remember that the discount is being paid for by other council tax payers, some equally hard up as the pensioners. I really don't agree with it at all.”

She said it would be preferable to raise the thresholds on savings and income to allow more pensioners to qualify for means-tested benefits.

IsItFair is campaigning for new tax needs that takes into account ability to pay from income and is not based on property size or value.

Tory Council leader Royston Smith denied the discount was a direct appeal to the grey vote, who are more likely to go to the polls than other age groups.

He said it was designed to ease the doubling of council tax under the last Labour Government and to provide some relief to fixed income pensioners who had been hardest hit by rising prices.

“The withdrawal of the council tax discount is a pernicious attack on pensioners in our city,” he said.

“The people that have got it are grateful for it.

They might be asset rich but not cash rich.”

Mr Harper said he doubted whether the retention of the discount would swing pensioners to vote to the Conservatives but said it would be on their minds as they decided who to vote for.