ANDY PHILIP

First Minister Alex Salmond faced calls to scrap controversial plans for a new local income tax yesterday.

Labour launched an assault on the SNP's proposal as consultation closed on the proposed replacement to the council tax.

Finance secretary John Swinney unveiled the proposals in March and said the tax, which would be set at 3p in the pound, was the "fairest solution" based on ability to pay.

The idea met with resistance from the CBI, the Institute of Directors and the Institute of Chartered Accountants of Scotland. The Federation of Small Businesses said it made "bad business sense" and could erode Scotland's competitive edge over England.

The plans were also criticised by the STUC, Unison and the National Union of Students. Labour said the responses were a "damning indictment" of the proposals.

The party's finance spokesman Iain Gray said: "Alex Salmond should listen to what he is being told and dump his unpopular plan."

A spokesman for the Scottish Government said: "Four out of five households would be better or no worse off under a local income tax."