The contribution made by war veterans in Glasgow is to be marked by a reduction to their council tax bills, it was announced yesterday.

Military pensions will no longer count as income when calculating tax and housing benefits, putting an extra £400,000 in the pockets of around 500 military families across the city.

The scheme was unveiled by Lord Provost Bob Winter as a centrepiece to Glasgow's Veterans Day celebrations, the first time it has been marked in the city.

Hundreds of former servicemen and women were in George Square where the Lord Provost presented badges to 50 of those present.

Speaking at the ceremony, Mr Winter said: "It's a stirring sight to see Glasgow's veterans march past and I'm always deeply honoured to take the salute from the fine men and women who have served their country and their fellow citizens in the armed services.

"Events such as this cause people to think afresh about the important work our armed se rvices do. I believe that, as a result of recent conflicts, all our citizens are growing increasingly appreciative of our armed forces and veterans, and rightly so."

The celebration, which included a parade and a 1940s-style swing band, was a welcome chance for many elderly veterans to catch up with old friends.

Eighty-six year old John Stott served in the Army for nearly 50 years, after signing up as a teenager in February, 1939. Describing his time in the forces as the happiest days of his life, Mr Stott said: "I'm very proud to be here. People say I've a lot of medals, but I worked hard to get them."

Mr Stott, who was involved in the Normandy landings in 1944, added that he was pleased by the announcement that his council tax would be reduced.

He said: "I think this will have real benefits for elderly veterans. I have a pension for hearing - I'm deaf in one ear, from all the gunfire - and these new arrangements will benefit me financially. It's a step in the right direction, recognising the hard work veterans have done."