John Gummer, environment secretary, said that a council tax of 4% above actual levels in England in 1995-96 would have the following approximate effects:
- gross yield of council tax would increase by £390m
- the average B and C bill before council tax benefit or transitional relief would increase from £541 to £563
- a 0.1 percentage point increase in the percentage change of the 12 month retail price index
- The additional 0.1 percentage point change on the rate of inflation would add approximately £40m to the cost of providing index linked benefits. There would be no effect on those income related benefits which are usually linked to the Rossi index.
Mr Gummer said that the precise effect on those benefits linked to the RPI would depend on whether the marginal change of 0.1% would be sufficient to target an increase in benefit levels.