Cameron plans council tax rise vote

In a speech in east London, the Tory leader said the scheme would allow him to scrap centrally-imposed capping and hand power over the level of local taxes back to local people.

Under the proposals, which he hailed as "the democratisation of council tax", Parliament would set a maximum threshold for annual percentage rises in the tax in councils in England, while the Welsh Assembly would do the same in Wales.

Any authority wishing to breach that threshold would have to secure the support of residents in a referendum.

"I want to replace bureaucratic accountability with democratic accountability. Capping will be scrapped - and I want to allow local people themselves to have a say over local taxation," Mr Cameron said.

"So the next Conservative government will require councils that want to introduce high council tax rises to submit their plans to a local referendum.

"They must explain to local taxpayers why they want to raise taxes by so much and they must show what they would do - a shadow budget - in the event of their plans being rejected.

"Council tax referendum ballots would be sent out with the annual council tax bill - and if people voted against the rise, a rebate would be credited to the next year's bill."

Under the Tory plans, the threshold would apply not only to councils but to other bodies - such as fire authorities, police authorities and the London Mayor's Greater London Authority - which receive some of their funding from a "precept" on the council tax bill.

Authorities would be required to draw up an alternative budget for use if residents voted down plans for an above-threshold hike, and increases rejected by voters would be repaid with a rebate in the next year's bill.