THE Chancellor courted the grey vote with surprise announcements of a £200 council tax refund for the over-65s and free bus passes for pensioners.

He also promised to end the current system under which the elderly have their pensions docked if they stay in hospital for more than a year.

But the package, which will cost nearly £1.5 billion, was dismissed as “gesture politics” by campaigners for the elderly.

“We’re dealing with some glamorous distractions rather than the main meat and drink of what pensioners’ politics are all about,” Mervyn Kohler, director of Help the Aged, said. “There’s a certain amount of gesture politics here ahead of a general election.”

Under the new proposals 7.2 million pensioners over 65 will get a one-off £200 payment this autumn, costing the Treasury £970 million. This will be on top of a winter fuel allowance of £200 for all pensioners or £300 for the over 80s.

Unlike last year, the council tax payments will only go to the over 65s, excluding 1.4 million women pensioners. But officials pointed out that the poorest women pensioners between 60 and 65 qualify for the pension credit guarantee which covers council tax.

The extra payments are aimed at defusing the row over council tax which has shot up the political agenda over the past two years.

Pensioners started to mobilise an effective campaign after bills soared by 12.9 per cent in 2003, five times inflation, adding over £100 in annual payments. Last year council tax rose by 5.9 per cent but the increase in 2005-06 is expected to be as low as 4 per cent after capping threats by ministers.

But the Tories, who are pledging £500 council tax discounts, claimed that the Chancellor was giving a cash bribe in an election year which he intended to take away in future. David Willetts, Shadow Pensions Secretary, said that the Budget report showed there were no plans for council tax refunds in 2006-07.

In addition winter fuel allowances are to be reduced to £150 in 2006-07. “Labour are offering jam tomorrow, but rarely has a Chancellor so cynically planned to take the jam away the day after,” Mr Willetts said.

The pension credit will also be increased by 13 per cent over the next three years to ensure that the minimum pensioner income is £119 a week by March 2008. The basic state pension for next year will be £82.05 for a single person and £131.21 for a couple, while the guaranteed minimum incomes will be £109.45 and £167.05 respectively.

Organisations representing the elderly broadly welcomed the plan for free bus travel for pensioners and the disabled in England, which will cost £420 million a year. Mr Kohler said that the announcement ended the postcode lottery which meant that some pensioners were paying much more than others.

The abolition of hospital charges would affect only a small minority of pensioners — those staying in hospital for over a year — because other charges had been phased out, he said.

KEY POINTS

The extra £200 payments will go some way to cover council tax rises of past two years

COMMENT: MERVYN KOHLER
Director of Help the Aged

“Gordon Brown can fairly claim that during his stewardship the Treasury has found £10 billion per year of extra money for pensioners. He has produced one-off payments which are valuable, pain-relieving measures like winter fuel payments and council tax refund, but which do little to build self-esteem and self-confidence in our older population. We have the usual cash bribe and older people will recognise this for what it is: a grand gesture to an increasingly restive older electorate. This is not an adequate response to the needs of our older population.”

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