Pensioners fight council tax cap

The Devon pensioner who warned that many older people will refuse to pay this year’s inflation-busting rise in council tax, has rejected a plan to cap the rate of increase for older people in future years. Albert Venison told Your Money he would "Throw it out the window. The shortfall is not going to be paid by the Government, it is going to be forced on the other council tax payers. Pensioners don’t expect others to pay their way for them. We will not even look at it. The government must find a better way to raise money for local government finance rather than tinker with a system that is flawed."

Mr Venison’s comments are the latest setback to the plan floated a week ago by Kent County Council to restrict council tax rises for people over a certain age to the rate of inflation. The cost would be met by raising the tax paid by younger people. Kent said it would use new powers under the Local Government Act 2003 to charge different rates to people depending on their age. If it pegged the rise for people aged 65 or more, everyone else would face an extra rise of 1.3% to pay for it. If the scheme just applied to anyone aged 75 or more then the extra rise for everyone else would be just 0.6%. In cash terms Kent says that would cost younger people up to £13.50 a year for the first option or £6.25 a year for the second.

In a letter to the leader of Kent County Council, Sir Sandy Bruce-Lockhart, Local Government Minister Nick Raynsford confirmed that a scheme to cut the tax for older people would be lawful. However, he warned that the powers in the Act to reduce council tax paid by individuals or groups of people are only given to the councils which send out the council tax bills, the so-called ‘billing authorities’. Kent is not a billing authority. In county areas it is the District and Borough Councils, of which Kent has 12, which send out the bills and Nick Raysnford warns Sir Sandy that Kent would need their approval. "The decision whether to introduce locally defined discounts and exemptions will be for individual billing authorities…your authority will therefore need to negotiate with the billing authorities within your county about taking your proposals forward."

Kent County Council told us it is "talking to all our billing authorities to sort out the minutiae of how to do it. We have had one meeting with the districts before we got the letter, now we’ll have to have more." However Your Money has found little support for the plan locally – even among the six Conservative controlled councils in the county. The response of a spokeswoman for Tunbridge Wells District Council was typical "We were not involved and have not formally considered it or looked at the practicalities. The letter from [Nick Raynsford] will need very careful consideration." Councils run by other political parties were even cooler. The Liberal Democrat leader of Shepway District Council, Linda Cufley, said her council had only heard about it "on the news" and warned "this is not sustainable in the long-term and will only prolong the life of a flawed tax. Any council tax capping should apply to all people reflecting their ability to pay not simply their age." A spokeswoman for Labour controlled Gravesham Borough Council said they had not been involved at all and "we cannot say what we will do in terms of a suggestion to reduce the tax for pensioners. We couldn’t make a decision until the grant settlement for next year from central government has been made."

Kent is already looking at alternative options. One is to offer older people a rebate under separate powers in section 2 of the Local Government Act 2000. That enables local councils to give financial assistance to promote the well-being of individuals or groups of people in their area. People over 65 would have to apply and would then be sent a rebate by post. The council has instructed a QC to see if that, or other alternatives, would be lawful.

Even other Tory controlled counties which have expressed an interest in the idea, are concerned about the implications. Nick Skellett, leader of Surrey County Council, told Your Money "We think the pensioners' rebate is an interesting idea. However, I do have concerns that it will not help all people on fixed and low incomes, and this is an issue that affects all age groups." And Hertfordshire leader Robert Ellis said "We are sufficiently interested in this idea to investigate further. However it's important that we understand all the implications of such a scheme, for example what would the selection process be, how would the scheme be operated, and who pays?"

Remember many people can get their council tax cut under current schemes.

Apply for all these reductions at the office of the council that sends your council tax bill.