by Amid warnings from the government that a difficult budget is on the way in October, there is a rumor that one policy being considered is ending the single person discount for council tax.
Sir Keir Starmer refused to rule out the change when asked during Prime Minister’s Questions (PMQs) on Wednesday, saying he would not “pre-empt the budget.”
When asked to No. 10 under the discount – which cuts council tax bills by 25% for taxpayers who live alone – in response to the prime minister’s unreserved response, a spokesman refused to give any indication whether he was on the chopping block. .
What we know
The issue first came to light at the start of September when deputy prime minister Angela Rayner was asked about the discount in the House of Commons in light of other expected spending cuts in the budget.
Former Conservative minister Graham Stuart asked Rayner, who is also housing and local government secretary, whether Labor planned to scrap the discount. He said it was “so important” for pensioners, especially when millions have been told in recent weeks they will not receive a winter fuel payment worth up to £300 this year.
Rayner did not commit to keeping it in place, instead saying it was “amazing” that the Tories wanted to “raise taxes” after “running the economy down” while in government.
“This government is about making sure that working people are better off and we intend to do that,” she said.
The question was raised in the House of Commons for the second time during PMQs this week, when the prime minister asked Tory backbencher Louie French whether the one-person discount was being scrapped.
Starmer replied: “I’m not going to pre-empt the budget. It will be set out in due course.”
Any change to benefits for older people is likely to be hotly contested following the government’s recent fight over the means test of the winter fuel allowance.
Caroline Abrahams, charity director at Age UK, said: “If the single person discount for council tax were to be abolished, many pensioners – particularly widows – could find themselves under a lot of pressure on their finances, especially if they lose their Also a Winter Fuel Payment.”
Consumer champion Martin Lewis said in a post on X that no substantial changes to council tax should be made without re-bonding homes. “Up to 400,000 homes are in the wrong band because we still rely on Eng & Scot [England and Scotland] on a temporary stop-gap evaluation done in 1991 to determine what bands people are in,” he wrote on X.
“If such a change comes, surely there should be even more emphasis on making sure that people are in the right band and that they are not paying too much.”
According to financial website Your Money, 8.39 million households in England received the discount in 2023 and 34% would be affected if the discount were scrapped.
What we do not know
There are currently no rumors of the discount being scrapped – rumours.
The Department of Housing has already stated that they currently have no plans to reform council tax.
Before the budget, on 30 October, the media and politicians usually get a clearer picture of the measures to be announced, but that is still a long way off.
However, the new government has repeatedly warned that the budget will contain painful measures and tax increases necessary to fill a financial black hole they claim they inherited from the previous administration.
The Labor Party has not ruled out increasing any of the big three taxes, income tax, national insurance and VAT, which, according to the Institute for Fiscal Studies, accounts for around 63% of the government’s tax revenue. This means that tax changes will be limited to a much smaller proportion of total wage income.
Apart from not raising the big three taxes, the government has so far been tight-lipped about what it hopes to change. Changes to inheritance tax and the tax-free lump sum on pensions are rumored to be under consideration.
The Conservatives argue that much of the overspending is caused by Labour’s decision on public sector pay.
What is the discount for an individual?
The council tax discount gives a single person a 25% discount on their council tax bill when they live alone. It can save individual households anywhere from a few hundred pounds to over £500 a year depending on the band they live in.
It is estimated to cost local authorities around £3bn a year and they are believed to be lobbying the government to end the discount.
Of the 8.4 million homes that are entitled to the relief, more than half of the beneficiaries are over 65.
Who is eligible?
The only requirement is that you can prove you live on your own in a council tax paying property. Councils will carry out checks with third party sources to ensure that no one else lives in the property even if only one person is registered to pay the bills.
If you are a single parent, you qualify for the discount as long as your child or children are under 18 years of age.
