A Conservative government will scrap council tax capping and instead require local authorities to hold referendums to approve 'excessive' increases, David Cameron is set to announce today. Financial Times

Hewill present the new policy as the 'democratisation of council tax'. The existing system, whereby the government caps council tax increases above a certain threshold, is 'an old-fashioned idea straight out of the bureaucratic age', Cameron will tell a London event. 'I want local people themselves to have a say over local taxation.'

Under the Tory plan, parliament would set an annual threshold for 'excessive' rises. Any council proposing a tax rise over this level would have to hold a referendum on the increase, sending out ballot forms with the annual council tax bills. If local people voted against the increase, they would get a rebate at the end of a financial year.