More than 300,000 elderly couples who do not qualify for help with council tax would be given a discount of up to 25%, regardless of their means.

Bristow Muldoon, chairman and convenor of the Scottish parliament’s local government committee who devised the plan, said it would give older people a fairer deal. Senior party sources believe it will be adopted as official policy.

Students are already exempt from paying council tax and single person households automatically qualify for a 25% discount, but council tax benefits are means tested for the elderly.

Under the plan older people in average band D properties would save about £280 a year while those in the most expensive properties would save up to £600.

“I am very strongly critical of other parties’ plans for a local income tax, but that doesn’t mean I think the council tax is perfect,” said Muldoon.

“One of the areas where it could be substantially improved is by reducing the burden upon pensioners who tend to pay a higher proportion of their income on council tax than younger people who are still in work. The aim of my idea of having an automatic rebate is to alleviate that burden on pensioners and try to make the council tax fairer for all.”

It is estimated that the scheme would cost about £100m to implement.

Labour strategists believe it could prove a vote winner among Scotland’s 1m pensioners who are more likely to go to the polls next May than younger people.

Ministers have already sought to win over the grey vote by introducing free concessionary travel, free personal care and central heating schemes.

Almost two thirds of pensioner households in Scotland have an annual income of less than £10,000 and 52,000 have an income of less than £5,200.

The move would also help take the sting out of other proposed council tax reforms that could see tax bands changed, increasing bills for owners of the most valuable homes and lowering them for low-value properties.

“This would be a vote winner and a clear dividing line between us and the Lib Dems, whose local income tax would impose massive tax hikes on hard-working families,” said one Labour figure.

Age Concern Scotland (ACS), which was angry at Gordon Brown’s decision not to extend a one-off council tax rebate of £200 for pensioners in this year’s budget, welcomed the proposal.

“This is very positive. It is extremely difficult for a lot of people to pay council tax and we know that up to 38% of those entitled to council tax benefit don’t receive it because people don’t know they can claim,” said Kay Hutcheson, director of fieldwork for ACS.

A Labour spokesman said: “Labour has made a positive contribution to older people in the current parliament and will be seeking to do the same in the next.”

The plan was met with scepticism by opposition parties. “Labour and the Lib Dems have made the council tax a tartan stealth tax. Even if they were to offer a discount they would only be giving back a fraction of what they had taken,” said a Scottish Conservatives spokesman.

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