Rachel Reeves won’t scrap single person council tax discount

Treasury confirms the Budget will not end scheme, claimed by four million pensioners, that gives 25 per cent off bills if people live alone

Rachel Reeves will not scrap the single person discount for council tax, Treasury officials have said.
At present, people get 25 per cent off their bill if they live alone, to take account of the fact that they benefit from fewer council services than couples or those with families.
Downing Street officials had previously refused to say whether or not the single person council tax discount would be scrapped next month.
But on Sunday the Treasury confirmed the upcoming Budget will not contain measures to scrap the council tax break claimed by millions of households, including four million pensioners who live on their own.
Analysis from the TaxPayers’ Alliance previously found that scrapping the discount would have raised £5.4 billion in the UK, £1.9 billion of which will be taken from single pensioners.
This is much higher than the £1.5 billion that the winter fuel allowance cut is expected to raise.
The Chancellor also ruled out creating a stand-alone wealth tax, despite pressure from Labour’s affiliated unions.
The move would have saved £3 billion a year, according to the Institute for Fiscal Studies (IFS), but Treasury officials have confirmed that there were no plans to do so.
It comes amid speculation of imminent tax rises ahead of the Budget on Oct 30, which Sir Keir Starmer has warned will be “painful”.
Although the Treasury has ruled out the specific measure, there could be other means by which the Government could launch a council tax raid in the Budget.
An overhaul of council tax bands, which were last evaluated in 1991, could affect millions of households.
The IFS found in 2020 that properties in band H, the highest council tax band, produced three times as much tax as those in the lowest, despite being worth at least eight times their value.
The changes suggested by the think tank could affect 17 per cent of households in England, 4.2 million, and see them lose an average of £1,230 a year, while up to 10 million would gain more than £200 a year.
In March, a spokesman for the then shadow chancellor said the party “has no plans to introduce this in government”.
Ms Reeves has also ruled out a bespoke wealth tax in the upcoming Budget.
“I’m not looking at creating some new tax, or a wealth tax,” she told the Sunday Times ahead of the Labour conference in Liverpool.
Her confirmation comes despite Unite, one of Labour’s major union backers, expected to bring forward a motion at the conference to demand a one per cent tax on the wealthiest.
Erkan Ersoy, the national coordinator for the union, told a fringe event on Sunday: “The myth of trickle down economics has to be challenged, it has never trickled down.
“Demand for a one per cent tax for the richest is a tactical step that my general is pushing.”
At the same event, Richard Burgon, the MP for Leeds East who was suspended from Labour after voting against the Government over the two child benefit cap, called for a wealth tax of two per cent.
“We really need a fresh start under this new Labour Government when it comes to the issue of living standards and the funding of public services.
“We need to steer clear of the siren voices on the political Right, in the media, for austerity and for cuts to living standards. The winter fuel allowance is an example of that.
“Of course, there are alternatives, a two per cent wealth tax on assets over £10 million, for example, that would raise up to £24 billion a year, and that affects less than 0.1 per cent of the population, 20,000 people.”