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Local Taxation

Part of the debate – in the House of Commons at 3:32 pm on 4th July 2005.

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Photo of Caroline Spelman Caroline Spelman Shadow Secretary of State (Office of the Deputy Prime Minister) 3:32 pm, 4th July 2005

The hon. Gentleman fundamentally misunderstood our policy at the last election, and I cannot believe that he is suffering either shortness of sight or deafness. We campaigned at the last election on giving a 50 per cent. discount on council tax to over-65s, which was fully funded and costed.

The Government will counter that with talk of council tax discounts, but the truth is that take-up of those discounts is abysmally low. There are several reasons for that: the length and complexity of the paperwork is daunting; the questions are demeaning, particularly for pensioners; and let us face it, the present scandal surrounding the tax credit system could hardly be a greater deterrent to would-be claimants. Soaring council tax bills not only present problems for people in terms of meeting the cost; a series of contingent problems arise from the way in which the system has been abused. It is a perverse system, which penalises efficient councils by giving them a relatively small central Government grant, forcing them to put up council tax. Council tax duly goes up, and the Government hit that authority with a capping order. That is a crazy way to proceed—it is the fiscal equivalent of splat the rat.