By Claire West

The Government today announced that it is cancelling Labour's plans for a council tax revaluation in England, saving families up to £320 a year in local tax hikes.

An independent review will also for the first time seek to rein in intrusive snooping by council tax inspectors, defending civil liberties.

Tax hikes on homes cancelled: No council tax revaluation will take in place in England in this Parliament. The Labour Party was actively planning to use a revaluation to increase tax bills on England's homes, with computer technology to target 'nice neighbourhoods', patios, gardens and scenic views. A revaluation would also be expensive to administer, costing up to £180 million.

Less well-off to benefit most: In Labour's 2005 council tax revaluation in Wales, four times as many homes moved up one or more bands as down. Labour politicians have admitted that it was used "hugely to increase the total [tax] take". The less well-off were hit the hardest, with two-thirds of the hikes in homes that were originally in council tax Bands A to C (the lowest three bands).

Reining in the snooper state: The intrusive 'Big Brother' council tax database and snooping activities that Labour had planned for the council tax revaluation will be scaled back. An independent data audit will be undertaken to take the necessary steps to protect privacy and civil liberties. This is part of the new Government's agenda of dismantling the 'database state', which includes scrapping Identity Cards.

Stopping state intrusion in your home: The Welsh revaluation by Labour Ministers was followed by a revaluation in Northern Ireland under direct rule. The law was changed to allow tax inspectors to fine households £1,000 to they failed to 'co-operate' with tax inspectors, or if they attempted to hinder or obstruct tax officials from entering their home. In England, council tax inspectors have legal powers of entry into your home, on pain of a £500 fine.

Eric Pickles, Secretary of State for Communities and Local Government, 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."

And he added, "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. Today 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."

David Gauke, Exchequer Secretary to the Treasury, said:

"We want fairness in the tax system. Therefore this Government will avoid an unnecessary and expensive revaluation that could lead to increased council tax bills. The Government is committed to being open about its work while protecting the privacy of personal data. To provide assurance on this point, the Valuation Office Agency is commissioning an independent Data Protection Audit of the council tax database."

Council tax bills in England more than doubled under Labour, rising from £688 in 1997-98 to £1,439 on a Band D home. Under a council tax revaluation, an average Band D home which was pushed up a band would see their bill rise to £1,759 - an extra £320 on yearly bills. A move from Band C (£1,279) to Band D would cost an extra £160 a year.

A local government resource review will also examine ways of making councils less vulnerable to the whims of Whitehall funding, which was a key driver in forcing up council tax in many local authorities under Labour due to so-called 'gearing' effects.