Parties scramble to woo older voters on council tax

Will pensioners be bought off in this general election by the promises being made by the political parties on council tax? That is the big question facing parties and pensioner groups.

If the current jockeying for position were being played out in a simpler format - say as employers and employees in wage-bargaining - the primary focus would be on pay (the basic state pension and other income) rather than the cost of living (issues such as council tax). But the parties have preferred to focus on the cheaper of these two issues - so council tax is pushed to the fore.

Last week the Conservatives announced plans costing £1.4 billion to restrict council tax bills to £500 a year for the estimated five million pensioners who live in households where all adults are 65 or over.

The government is fighting on different fronts - including giving pensioners cash to help with the council tax bills, threatening rate-capping on local authorities that bring in higher rises, and giving an extra £1 billion to councils this year to reduce the need for high increases.

By contrast, raising the basic state pension (BSP) from £79 a week to £105 - a level thought a reasonable aim by many in the industry including the National Association of Pension Funds and the National Pensioners Convention - and giving it in full to all pensioners, would cost between an estimated £9bn and £14bn a year.

The Conservatives and Liberal Democrats' pensions policies improve on the current BSP but do not go anywhere near this far. The Conservatives confirmed their pensions policy last week - relinking the BSP to wages inflation at a cost of up to £3bn a year - but their main emphasis was on council tax.

Meanwhile, Tony Blair and his ally Alan Johnson, the Secretary of State for Work and Pensions, want to be more generous than Chancellor Gordon Brown. Last week a statement from Johnson left the door wide open for an overhaul - including the possibility of easier entitlement to the BSP - some time in the next parliament.

When you look at the voting figures, there is no surprise that the parties court the grey vote. In the 2001 general election, the 65+ age group was the most likely to visit a ballot box - with 87 per cent doing so. Only 53 per cent of 18-24-year-olds did the same.

The signs are that those positions could be even more polarised in the election this time around. When pensioners think about council tax issues and whether this should affect their vote they should consider:

· The BSP is due to rise 3.1 per cent in April - by £2.45 to £82.05 a week for single pensioners (and by £3.95 to £131.20 for couples).

· Council tax increases will be finalised and announced by 11 March. The government is expecting that these will average 4.5 per cent.

· The average pensioner couple will see a fifth of their basic state pension increase absorbed by the council tax rise. (The current average council tax bill is £967 - and a 4.5 per cent rise adds 83p to that each week.) Increases in utility costs could absorb most of the rest of the increase in the BSP.

· Last year's council tax increases - averaging 5.9 per cent - were the lowest in nine years, and the government expects this year's to be the lowest in a decade.

· Next year's council tax rises are unlikely to be as low as this year's.

· A revaluation exercise - due to peg all properties to their value as at this April - could lead to substantial council tax increases from April 2007 in areas where house prices have soared.

· Help the Aged and the National Pensioners Convention have welcomed the short-term effects of the Conservatives' proposal, but want fundamental reform and a fairer system, not a tweaking of the status quo.

And if you want to see a microcosm of the political games over council tax, look to Exeter where Sylvia Hardy, the pensioner who is ready to go to prison for non-payment of £63 in council tax this year (the amount by which the tax increase exceeded her pension hike) has been told by the bailiffs threatening her that the council (whose leading group is Labour) has asked them to hold off for the time being.

No action is expected for a couple of months - and that would take us into May - and probably beyond the general election.