THE council tax is expensive and unjust and should be scrapped, say Bury's Liberal Democrats.

They have called for it to be replaced by a local income tax based on people's ability to pay, which would help pensioners and those on low earnings.

Councillor Tim Pickstone said the income tax would help to reduce inequality, promote local democracy, properly fund local services and tackle poverty.

"Council tax was brought in as an emergency measure by John Major to replace the even worse poll tax," he told the recent council meeting. "It's ludicrously costly -- it costs £569 million a year to collect it, four times as much per pound as income tax. It is grossly unfair on people with low incomes, especially OAPs. Between 1993 and 2004, it has risen from 15 per cent of the state pension to 23 per cent."

He said a Lib Dem government would also give every household a £100 rebate while the legislation was going through, paid for through higher income tax on those earning more than £100,000.

But council leader Coun John Byrne said the Lib Dems were "headline-grabbing" and questioned their maths. He also wondered why they had not supported the pensioner credit scheme in Parliament.

And Tory leader Roy Walker accused them of attacking working people, what with proposals for higher national tax and now a regional income tax.

The Lib Dems' demands were thrown out, and the council resolved instead to support a complete review of the way local government is funded. This may include making improvements to the council tax, returning business rates to local authority control, and looking at all the alternatives including a local income tax.