Labour is facing growing pressure over speculation that it could scrap the single-person council tax discount, a move critics have branded a “widow’s tax” that could leave millions of single-person households paying hundreds of pounds more each year.
The concerns follow comments from Chancellor John Healey indicating that the government intends to reform the council tax system. Senior Labour figures have repeatedly declined to rule out changes to existing discounts.
Shadow Chancellor warns of 'grave injustice'
Shadow Chancellor Mel Stride warned it would be a “grave injustice” to force widows and widowers to pay higher council tax as they grieve the loss of a partner.
He told the Daily Express: "John Healey needs to find a way to cover Burnham's unfunded spending commitments, but he must not implement a Widow's Tax to do that. Working people have already been made to pay the price for Labour's profligacy. To go back for more by punishing those who live alone, including widows and widowers, would be a grave injustice. The government must follow the Conservatives' lead and find savings from the welfare budget, to cut taxes and lift the cost of living for ordinary families."
Discount could be axed
The single-person discount reduces council tax bills by 25 per cent for households occupied by one adult. It can provide significant financial support to pensioners and people who live alone after the death of a spouse or partner.
Housing Secretary Angela Rayner declined to rule out abolishing the discount when questioned about the policy in 2024. She subsequently resigned from Sir Keir Starmer’s government amid controversy over her tax affairs but has since returned to her former post under Mr Burnham.
She is now working alongside Mr Healey, who has previously supported proposals that would have affected council tax discounts. While in opposition in 2012, Mr Healey tabled an amendment in parliament that sought to end automatic council tax reductions, a change that would have included the single-person discount.
Healey hints at further reforms
Speaking to Sky News on Thursday during a visit to a holiday park in Pembrokeshire, Mr Healey went further, warning that he and Mr Burnham were "evolving council tax" and bringing in new top bands for costly houses.
Labour has described the proposed levy as a “mansion tax”, but critics warn it could disproportionately affect homeowners in the South, as well as pensioners whose properties have risen in value.
In his interview Mr Healey trumpeted government schemes that have capped bus fares and brought down VAT on energy bills amid a range of measures intended to help with the cost of living.
"The first priority for me, the first duty I would say for any Chancellor is fiscal discipline," the Chancellor said. "What does that mean? It is the bedrock of economic stability. Andy Burnham and I have said in lockstep, we will keep control of government spending, will hit the fiscal rules, and that will be the bedrock for the budget that I bring in, in two months time. If you've got a stable economy, it means that families can manage with a bit more confidence. It means businesses can invest for the future and we simply can't deal with the problems we face as a country by maxing out the country's credit card."
However, he failed to rule out further changes to council tax, leading Shadow Minister James Cleverly to tell the Daily Express that "millions of people rely on the single person council tax discount" as he warned it "could be under serious threat".
He added: "Labour never tire of finding new ways to hike your taxes. They have already removed the discount for their new council tax surcharge, and now single young professionals, widows and others could be in the firing line too for their main council tax bill. Meanwhile council tax is soaring across the board on Labour’s watch, with the average family in a Band D property paying a cumulative £2,306 extra by 2030-31. Labour are turning council tax into a crude wealth tax, abandoning the long standing principle that it should be a charge to pay for local services. In opposition, Labour promised to freeze council tax. Reform promised to cut it. Neither has kept to their pledges. The Conservatives are the only party that will keep tax on the family home down."
Millions could be affected
The single person's discount is worth around £598 a year on the average home and analysis suggests that its removal would mean a 33 per cent hike in the annual charge. Some 8.6 million households across England already receive the discount, with 89 per cent of those people living in Band A to D homes.
Conservative officials say this is a clear indication that the discount is not a subsidy for the rich, but rather a lifeline for those living alone. When approached by this paper the government refused to comment, but it is understood there are no current plans to scrap the discount.
However, Westminster insiders told the Daily Express that while scrapping the discount was not “currently” planned, there were concerns it could be introduced at the autumn Budget.
Mr Burnham and Mr Healey will deliver the first Budget of the new administration on October 28, when they will set out their tax and spending plans for the coming year. As part of that Mr Healey is expected to be unable to find the money to fund his own demand to see the UK hit a target of spending 3% of its GDP on defence.
He previously resigned from Sir Keir Starmer's government over the issue saying it would leave the UK less safe. But reports circulating this week suggest he is not prepared to meet the commitment himself, with James Cartlidge, Shadow Defence Secretary, saying it was "extraordinary that he is backtracking on the very pledge which sealed the fate of the last PM".
He added: "Russia doesn’t work to Treasury timetables, and we can’t wait for a spending review to keep Britain safe."
