Enter the Peasants, with Billhooks
Margaret Thatcher would say the poll tax was actually an attempt to save local government. Like schools, hospitals and housing, councils had been subject to a grisly torture chamberful of pincers, bits, whips and flails as ministers tried to stop them spending money, or raising it, except as Whitehall wished. Since the war local government had been spending more but the amount of money it raised independently came from a relatively narrow base of people, some 14 million property-owners. Thatcher had been prodded by Edward Heath into promising to replace this tax, the ‘rates’, as early as 1974 but nobody had come up with a plausible and popular-sounding alternative. She intensely disliked rates, regarding them as a tax on self-improvement and inherently un-Conservative. Yet in government, the problem nagged away at her.
There was a malign dynamic at work. The more powers government took away from local councils, the less councils mattered and the more local elections were used merely as giant referendums on central government, a cost-free protest vote. Once, local elections were not national news; they were about who was best to run towns and counties. In the late sixties and seventies they became national news, a regular referendum in which the Prime Minister was applauded or slapped. It was generally the latter. Under Margaret Thatcher the Tories lost swathes of local councils in bloody electoral defeats, again and again. The result was more socialist councils, mistrusted even more by central government, which therefore, as we have seen, took still more powers away from them, which made the elections even less relevant, and fuelled more protest voting and so on. If this was not bad enough, then it was clear to Thatcher and her ministers that socialist councils were pursuing expensive hard-left policies partly because so few of the local voters were ratepayers. Too many could vote for high-spending councils without feeling any personal pinch.
One way of cutting the knot would to be to make all those who voted for local councils pay towards their cost. This was the origin of the poll tax, or community charge as it was officially known, a single flat tax for everyone. It would mean lower bills for many homeowners and it would make local councils more responsive to their voters. On the other hand, it would mean a new tax for approximately 20 million people which would be regressive. The poorest in the land would pay as much as the richest. This broke a principle which stretched much further back that the ‘post-war consensus’. The idea had been knocking around for some years before it was picked up by the government and subjected to a long and intense internal debate, which we will skip, except to note that not everyone thought it was a good idea. The poll tax was sold to Mrs Thatcher by her Environment Secretary, Kenneth Baker, at a seminar at Chequers in 1985, along with the nationalization of the business rate. Nigel Lawson tried very hard to argue the Prime Minister out of it, telling her it would be ‘completely unworkable and politically catastrophic’.
He was outgunned by a stream of lady-pleasers keen to prove him wrong, and indeed the tax was being discussed at the very same cabinet meeting Heseltine stalked out of during the Westland affair. It might have been less of a disaster – it might even have been successful – had it been brought in very slowly, over ten years as first mooted, or four as was then planned. But at the 1987 Tory conference there was a collective rush of blood to the head. Intoxicated by the bold simplicity of the thing, party members urged Thatcher to bring it in at once. Idiotically, she agreed. There was, to be fair, a reason for hurry. Rates, like the modern council tax, depended on the relative value of houses across Britain, which changed with fashion and home improvement. Every so often, therefore, there had to be a general revaluation to keep the tax working. Yet each revaluation meant higher rates bills for millions of homeowners and businesses, and governments tended to try to put them off. In Scotland a crisper law did not allow this. There, a rates revaluation had finally happened and caused political mayhem. It gave English ministers a nasty glimpse of what was in store for them too eventually. Scottish ministers begged Thatcher to be allowed the poll tax first. They were given their head.
Exemptions were to be made for the unemployed and low paid but an attempt by wisely nervous Tory MPs to divide the tax into three bands so that it bore some relation to people’s ability to pay, was brushed aside despite a huge parliamentary rebellion. When the tax was duly introduced in Scotland, as we shall see later, it caused chaos and widespread protest. In England, the likely price of the average poll tax kept rising. Panicking ministers produced expensive schemes to cap it, and to create more generous exemptions, undermining the whole point. Capping the tax would remove local accountability; and the more exemptions, the less pressure on councils from their voters. Yet even Thatcher began to grow alarmed, as she was told that well over 80 per cent of people would be paying more. On 31 March 1990, the day before the poll tax was due to take effect in England and Wales, there was a massive demonstration against it which ended with a riot in Trafalgar Square. Scaffolding was ripped apart and used to throw at mounted police, cars were set on fire, shops smashed. More than 300 people were arrested and 400 policemen hurt. Thatcher dismissed it as mere wickedness. More than a riot, though, it was the growing swell of protest by middle-class, normally law-abiding voters who insisted they simply would not pay it, that shook her cabinet. As the Conservatives’ ratings slumped in the country, Tory MPs who had opposed the tax, including Michael Heseltine’s key organizer, Michael Mates, began to ask their colleagues whether it was not now time that she was removed from power.