The Chancellor introduced the £200 refund in last years budget but failed to mention it in his pre-budget report, which suggests he has scrapped it after just one year.

Speaking at Southside Community Centre's over 60's social club in Edinburgh, Ms Sturgeon said:

"In his Pre-Budget Report the Chancellor completely dodged his commitment in the 2005 Budget to a £200 Council Tax refund for pensioners. If it was good enough last year it is good enough this year, especially given that pensioners are even worse off than last year with recent hikes in Council Tax prices.

"Pensions have not increased while Council Tax has, so it does not make sense why pensioners are hit with the added burden this year. The SNP is committed to scrapping the Council Tax and replacing it with a fairer and better local income tax so many of our pensioners will pay nothing and most people paying less.

"Until this happens, we  must ensure that pensioners throughout Scotland are not punished further. Pensioners poverty continues to be a huge problem in Scotland which is why I have written to the Chancellor urging him not to back out of his 2005 Budget commitment of a £200 Council Tax refund.

"Even in the Chancellor's own backyard in Fife Council Tax is set to rise by 3.9 per cent. If he has the best interests of pensioners both in his constituency and throughout Scotland at heart, he should not duck out of his 2005 Budget commitment and give pensioners the fair deal that they deserve. Otherwise, it just reveals this to be another pre-election bribe by the Labour government."

Dear Chancellor,

In the 2005 Budget you announced a £200 Council Tax refund for pensioners designed to help them meet the very high level of council tax bills. As you will be aware the council tax was set in most parts of Scotland last week and for the ninth year running the average rise is well ahead of inflation. Indeed in your own area of Fife council tax is set to rise by 3.9%.

While an increase of this order may seem little to MPs or MSPs for pensioners it represents a significant increase. Age Concern in Dundee claims that some pensioners are paying up to 15% of their income on council tax and Help the Aged have identified council tax poverty as a growing problem.

After the election in 2007 the SNP will replace the unfair council tax by a local income tax based on the ability to pay. In particular a local income tax will benefit pensioners. In the meantime, however, it is vital that pensioners are given help to meet their council tax bills. I am therefore urging you to make clear that the £200 Council Tax refund was not just a one-off election bribe, prior to the 2005 election, but will be kept in place until the unfair council tax is abolished.

There was concern after the pre-budget statement in December that no reference was made to the £200 Council Tax refund. Some commentators interpreted your silence as an indication that the refund was to be dropped. I urge you to make clear now that the £200 refund will be retained and that this vital financial support for pensioners will continue.

Regards,

Nicola Sturgeon MSP