Government rules out Council Tax revaluation

There will be no revaluation of council tax bands in England during the current Parliament, Communities and Local Government Secretary Eric Pickles announced.

Mr Pickles announced an independent review of council tax inspections, which he said would "rein in intrusive snooping" by limiting the data gathered and stored about people's homes.

The Communities Secretary said families in England could save up to £320 a year in local tax hikes from his decision not to go ahead with a revaluation being planned by Labour.

But Labour denounced his claims as "cynical and misleading", pointing to a pledge in this year's election manifesto which promised: "We will not hold a council tax revaluation in the next Parliament."

Council tax bands in England are based on valuations of property carried out in 1991. Plans for a revaluation of 22 million homes in 2007 were postponed by the former Labour government in 2005, amid anger over a previous exercise in Wales which led to tax hikes for many households.

Mr Pickles said the Welsh revaluation led to one-third of homes moving up one or more bands - four times as many as moved down. The less well-off were hit the hardest, with two-thirds of the hikes in homes that were originally in the lowest three bands, he said.

If the experience of Wales were repeated in England, families in homes moved up one band from D to E would face a tax hike averaging around £320 a year, said Mr Pickles.

This would increase the burden of council tax bills which rose under Labour from £688 for a typical Band D home in 1997/98 to £1,439 in 2009/10, said the Communities Secretary.

Meanwhile, the taxpayer will save up to £180 million on the cost of administering a revaluation exercise, he said.

An independent data audit of the Valuation Office Agency (VOA) will protect privacy and civil liberties as part of the new Government's agenda of dismantling the "database state", said Mr Pickles.

The VOA's inspectors assess properties' value for council tax purposes, and there was previously controversy over their collection of data on features of homes such as the number of bedrooms or bathrooms, whether it has a patio and whether it enjoys a nice view or is in a good neighbourhood.

Mr Pickles said: "We have cancelled Labour's plans for a council tax revaluation which would have hiked up taxes on people's homes.

"The new Government will protect the privacy of law-abiding citizens from intrusive spies-in-the-sky and halt state inspectors from barging into England's bedrooms and gardens.

"We are standing up for the people who have pride in their home, and calling time on Labour's state snoopers and surveillance state.

"Hefty council tax bills are a constant financial worry for many people. We are setting their minds at ease, and protecting the interests of the less well-off in particular who were the hardest hit from Labour's council tax revaluation in Wales."

A Labour spokesman said: "The Labour Party made an unequivocal commitment that there would be no council tax revaluation in this Parliament.

"This is a cynical and misleading manipulation of facts based on what was ultimately a routine updating of the VOA's records."

And consumer guru Martin Lewis, of moneysavingexpert.com, said that the failure to hold a revaluation would mean 400,000 homes remaining in the wrong council tax bands.

"I remember sitting opposite Eric Pickles on TV when he decried Labour for covering up that 400,000 people were in the wrong council tax band," said Mr Lewis.

"Yet this means those people will remain in the wrong band - still based on valuations done by estate agents driving past homes in 1991. The system is flawed, and was never meant to last this long."

Alex Deane, director of Big Brother Watch, which campaigns against intrusions on privacy, said: "For too long, tax inspectors have been able to intrude into people's private homes and place their property details on an insecure state database, all in the name of generating extra revenue for the Government coffers.

"The announcement is welcome and not before time. We only hope this is just the first step on the road to removing the prying eyes of the state from our private property."

But a spokeswoman for the VOA said it was "absolutely not the case" that its inspectors' work amounted to "snooping" on householders. The Agency has never exercised its legal right to enter a home since it was introduced by legislation in the early 1990s, she said.

The spokeswoman said: "We will only ask to see inside people's homes in very, very rare circumstances. When we do that, we do it by agreement with the individual and often at the individual's request.

"The bulk of our work doesn't take us anywhere near the inside of people's homes."

Emma Boon, of the TaxPayers' Alliance, which campaigns for lower taxes, said: "Families who faced a rise in council tax will be relieved that this revaluation is no longer going ahead.

"Council tax has doubled in the last 10 years whilst many services have been scaled back, executive pay has spiralled out of control and charges have increased; it's time council tax was cut."

Cllr Colin Barrow, leader of Westminster City Council, said: "Councils will welcome this move as a positive step that will end uncertainty for many council tax payers and local authorities."

He said: "It allows the Government to concentrate on creating a fairer and more responsive financial system, reflecting the differing needs of each area.

"We, for instance, would refer to the special problems of poverty in Westminster alongside the responsibility we have to keep the city clean for millions of visitors every day.

"Others will have different pressures, but we are glad that the Government has recognised that tinkering with the council tax is not the answer."

Chief executive of the Chartered Institute of Public Finance and Accountancy Steve Freer said he was not surprised by the announcement, but added: "This leaves a huge problem. One does begin to wonder whether we will ever have a government that will take this on."

He told BBC Radio 4's Today programme: "It's a matter of fact that some of us are paying too little and some of us are paying too much - we just don't know who.

"We are simply not learning the lessons of the past."

Mr Pickles insisted it was the relationship between the tax bands that was crucial to fairness.

"I have been arguing for a long time that it's the relationship between the bands that matters," he told BBC Radio 4's Today programme.

"This is essentially about fairness. Why should we penalise people with a tax increase when the relationship between the top band and the bottom band is roughly where it was when the council tax was first introduced.

"They (councils) can increase their council tax. We are removing capping to allow local people to decide the level of their council tax by way of a referendum."

He ruled out allowing individual councils to conduct their own authority's revaluations, saying: "I think it stinks as an idea."

He stressed: "It's the relationship between the top and the bottom bands that's important, and the relationship between the north of England and the south of England. They are roughly in the same position they were 20 years ago so there's no need for a revaluation."

Mr Pickles added: "What we want to do is offer some degree of stability, and just coming out of recession and for ordinary people I don't think we should be imposing an extra £1,600 of taxation on them."