Pensioners' council tax bills will be cut by £340 under plans to be unveiled by the Conservatives today.

Tory leader Michael Howard has promised to cut bills for 3.8 million pensioner households using money saved from reducing government waste.

Pensioners are most affected by increases in council tax bills because they are on fixed incomes.

Figures released by the party this weekend claim the typical single pensioner has seen 40pc of the increase in their basic state pension taken back in higher council tax since 1997.

Pensioner couples have lost one third of their increase because of rising bills.

Mr Howard told the BBC: "We think that older people in our country need dignity, respect and security. We owe them a great deal, many of them fought for the freedoms which we enjoy today.

"I think you can tell a lot about a country by the way it treats its older people."

The Conservatives have promised to cut tax overall by £4 billion as a result of cuts to government waste.

However, Labour dismissed the Tory plans, saying Conservative town halls would impose bigger council tax increases than their Labour counterparts. The party released a survey showing Band D increases in Labour areas averaged 4.2pc compared with 5.5pc in Tory ones.

Mr Howard said: "We will give a 50pc discount off the council tax bill to every household where all the adults are over 65 years old.

"There will be a limit of £500 to the discount. It will not be means-tested."