The Liberal Democrats have unveiled their plans to scrap the council tax.

Under the proposals, the existing charge would be replaced by a local income tax, which would result in sharp increases in rates for the top 30 per cent of earners, but would result in a dramatic reduction in bills for pensioners.

Party leader Charles Kennedy argued that the move would be "fair, transparent and progressive", while the current system was a "completely regressive and unfair form of local taxation".

Local authorities are planning to defy the government and plan to introduce large increases in council tax this year, the Guardian reports.

Meanwhile, the Independent reveals that the Local Government Association will on Thursday call for the "relocalisation" of business rates to local authorities.