Hampshire Council Tax Rises Could Wipe Out Annual Pension Uplift

4.00.00pm UTC (GMT +0000) Wed 12th Nov 2003

Hampshire pensioners who live on their own are likely to lose almost all this year's pension increase in extra council tax, warns Hampshire MEP Chris Huhne. 'On current figures, Hampshire's single pensioners will have 3 pence a week left of their pension increase to pay for any other rising costs. This is ridiculous'.

Mr Huhne's warning followed comments today by Sir Jeremy Beecham, chairman of the Local Government Association predicting that the average rise in council tax could be 12 per cent. 'With the Government skewing money to the north, this would mean the same sort of rise in the South as last year' said Mr Huhne.

Mr Huhne said that the basic state pension is set to rise by £2.20 a week from April but that the average council tax in Hampshire - following Sir Jeremy's predictions - could be up by £2.17 a week even if a single pensioner claims the 25% discount . 'This year's pension increase will once again fail to keep pace with the pressures on pensioner budgets, particularly the council tax' said Mr Huhne.

'A pension rise, after paying council tax, of just 3 pence a week is an insult to people who have spent a lifetime paying national insurance contributions and taxes' said Mr Huhne.

The average Hampshire Band D council taxpayer currently pays £1,083 a year. 'If Hampshire's council tax rises rises by the same amount more than the national average again, a typical resident could see a hefty £1,233.50 bill land on their doormat in the new year' said Mr Huhne.

'For a pensioner couple paying Band D council tax, the rise in council tax would be £2.87 compared with a pension increase of 2.8 per cent taking their pension up by £3.47. But it is the single pensioners who will be particularly hard hit' said Mr Huhne.

'Pensioner poverty in the UK is already reaching epidemic proportions. It is a matter of urgency that we tackle this problem, but the current government is only making matters worse' said Mr Huhne.

The Liberal Democrats are the only party aiming to resolve this problem, calling for the total abolition of council tax. 'This is an unfair tax. It needs be replaced by a local income tax based on the ability to pay or the plight of poor pensioners will only worsen' said Mr Huhne.

This year's council tax rise in Hampshire was 1.9% higher than the average tax rise across England (12.9%).

Note to editors: Mr Huhne's calculations for next year's council tax are based on a rise of 1.9 per cent above the national average - the same differential as this year - and on Sir Jeremy Beecham's projection of 12 per cent for the national average. They also take the average council tax payment for all districts and boroughs within the Hampshire county council area including the precept from the police and the county. They assume that the pension will rise in April by 2.8 per cent, in line with projected inflation.

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