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The leaflet explaining the charge sent to every household by the Department of the Environment in April 1989.

The Community Charge, popularly known as the "poll tax", was a system of taxation introduced in replacement of the rates to part fund local government in Scotland from 1989, and England and Wales from 1990. It provided for a single flat-rate per-capita tax on every adult, at a rate set by the local authority. The tax was greatly unpopular and was replaced by Council Tax in 1993.

Origins

The abolition of the rating system of taxes (based on the notional rental value of a house) to fund local government had been unveiled by Margaret Thatcher when she was Shadow Environment Secretary in 1974, and was included in the manifesto of the Conservative Party in the October 1974 general election. In the 1979 election the Conservative manifesto stated that lowering income tax took priority over abolition of the rates, but the Government did find the time to publish a Green Paper, Alternatives to Domestic Rates, in 1981. This Green Paper considered a flat-rate poll tax as a supplement to another tax, noting that a large flat-rate poll tax would be seen as unfair.

The 1980s saw a period of general confrontation between central government and Labour-controlled local authorities, that eventually led to the abolition of the Greater London Council and the six metropolitan county councils. The commitment to abolish the rates was replaced in the 1983 general election manifesto with a commitment to introduce the ability for central government to cap rates which it saw as excessive. This was introduced by the Rates Act 1984.

Although the ratings system was supposed to have regular revaluations in order to minimise discrepancies, the revaluations in England and Wales had been cancelled in 1978 and 1983. The Scottish revaluation of 1985/1986 led to a great deal of criticism and gave added urgency to rates reform or replacement.

The Green Paper of 1986, Paying for Local Government, produced by the Department of the Environment from consultations between Lord Rothschild, William Waldegrave and Kenneth Baker, proposed the Community Charge. This was a fixed tax per adult resident, hence a poll tax, although there was a reduction for poor people. This charged each person for the services provided in their community. Due to the amount of local taxes paid by businesses varying, and the amount of grant provided by central government to individual local authorities varying, there were dramatic differences in the amount charged between councils.

Legislation

This proposal was contained in the Conservative manifesto for the 1987 General Election. The legislation introducing the Community Charge was passed in 1988 and the new tax replaced the rates in Scotland from the start of the 1989/90 financial year and in England and Wales from the start of the 1990/91 financial year. Additionally the uniform business rate, levied by local government at a rate set by central government and then apportioned between local authorities in proportion to their population, was introduced.

The tax was not implemented in Northern Ireland, which continued, as it still does as of 2010, to levy the rating system, despite some unionists calling for the province to have the same taxation system as the rest of the United Kingdom. That the tax was introduced in Scotland a year before England and Wales is often described as causing the death of the Conservatives in Scotland, and cementing their image as an English party. In 1992 the Conservative vote increased in Scotland compared to 1987 (before the introduction of the poll tax), but by 1997 the position was reversed, with the result that there were no Conservative Members of Parliament in Scotland.

Implementation

Graffiti against the Poll Tax near Huddersfield

Protesters complained that the tax shifted from the estimated price of a house to the number of people living in it, with the effect of shifting the tax burden from the rich to the poor. It did not help that Thatcher, close to the end of her period in office and losing popularity, chose to champion the Community Charge herself and apparently chose to be both ruthless in imposing it and adamant that there would be no "U-turns" (reversals in policy).

Additional problems emerged when many of the tax rates set by local councils proved to be much higher than many earlier predictions. Some have argued that local councils saw the introduction of the new system of taxation as the opportunity to make significant increases in the amount taken, assuming that it would be the originators of the new tax system and not its local operators who would be blamed.^{[citation needed]}

Owner-occupiers paid because they could not hide, and also it cost less for them than rates had; some renters did not pay, knowing they would be long gone when the bills arrived. Councils of towns with highly mobile populations, such as university towns, were faced with big store rooms of un-processed "gone-aways".

The initial register was greaty irregular. It was based on the rates register for "owned" houses with lots of other unreliable data such as housing benefit recipients.

The big collection issue was the 20/100% split. People in employment had to pay 100%, students and the registered unemployed paid 20%. The nature of the shared house market meant that not even the landlord knew exactly who was living there; tenants were replaced, and may have shared a "single" room with their partner. So the local council had no idea who was living where and when, and the local population were unlikely to assist them.

Central government imposed "collection targets". Because of demographics this tended to hit the "irresponsible"^{[citation needed]} Labour authorities. Cannier councils adjusted the register size to the number of people who paid, and so got whatever collection rate they wanted.

The charge was bitterly opposed and people sought to protest through mass protests called by the All-Britain Anti-Poll Tax Federation to which the vast majority of local Anti Poll Tax Unions (APTUs) were affiliated. In Scotland, where the tax was implemented first, the APTUs called for mass non-payment. These calls rapidly gathered some support there and even more in England and Wales, even though non-payment meant that people could be prosecuted.

As the tax neared its implementation in England, protests against the tax began to increase as unrest mounted. This culminated in a number of Poll Tax Riots. The most serious of these happened in London on 31 March 1990 - a week before the implementation of the tax - during a protest at Trafalgar Square, London, in which more than 200,000 protesters attended. There were further conflicts, but none so large as this.

Non-Payment

The Anti-Poll Tax Unions, as mentioned earlier, called for mass non-payment of the tax. As the amount of the poll tax began to rise and the inefficiency of local councils in collection of the tax became apparent, large numbers of people refused to pay the tax. Local councils tried to respond with increasingly draconian enforcement measures, but these were largely ineffective against such huge numbers of non-payers - up to 30% of former ratepayers in some areas refused to pay, according to the BBC^[1].

A Labour MP, and Militant Tendency supporter, Terry Fields, was jailed for 60 days for refusing to pay his poll tax. For this he was expelled from the Labour Party, in December 1991 (the Labour party refused to support the non payment campaign, especially amongst MPs - "Law makers must not be law breakers" was Neil Kinnock's response.) But the vast majority of non-payers were not politicians but ordinary people and it was these who formed the APTU strategy.

The strategy was threefold. Firstly, non-payers were encouraged not to register. Secondly, they were encouraged to go to court and contest the Local Council's attempt to gain liability orders and, by doing so, clog up the courts. After a liability order was granted, non-compliance was the next step, refusal of admission to bailiffs, etc. If this led to another court hearing - the first one at which the non-payer could be jailed - the non-payer usually did not turn up. Because of the huge number of non-payers, usual enforcement measures like liability order, bailiffs and even arrest warrants and committal hearings proved useless - there were not enough bailiffs, courts or prison cells to implement any of the orders granted. For example, in November 1990 South Yorkshire police said they were planning to refuse to arrest poll tax defaulters even when instructed to by the courts because it would be "physically impossible for the police because of the large number of defaulters."^[2] Hence the government was reduced to issuing threatening pieces of paper which it couldn't act upon - and the non-payers knew this. The second year of the poll tax saw an increase in non-payment as people who had been wavering saw how ineffective the government was and decided to join the non-payment campaign.^[3]

Long-term effects

For this among other reasons, Thatcher was challenged by Michael Heseltine for the Conservative leadership. Although she prevailed by a margin of 50 votes, she narrowly missed the threshold to avoid a second vote, and on 22 November 1990 she resigned after reluctance from her Cabinet to continue supporting her. All three of the contenders to succeed her pledged to abandon the tax.

The successful candidate, John Major, appointed his defeated rival Michael Heseltine to the post of Environment Secretary, responsible for replacing the Community Charge. In 1991 the Chancellor of the Exchequer, Norman Lamont, announced a raise in Value Added Tax from 15% to 17.5% to pay for a £140 reduction in the tax. By the time of the 1992 general election, legislation had been passed replacing Community Charge with the Council Tax from the start of the 1993/94 financial year, but the VAT rate of 17.5% remained despite abolition of the poll tax. The Council Tax strongly resembled the rating system that the Poll Tax had replaced. The main differences were that properties were placed in bands thereby capping the maximum amount, and it was levied on capital value rather than notional rental value of a property. Households with only one occupant were also entitled to a 25% discount.

Councils were left with the expensive task of pursuing large numbers of defaulters. There is also some evidence that the poll tax had a lasting effect of people not registering themselves on the electoral register to evade collection attempts; that may have had an effect on the results of the 1992 general election.^[4]

Notes

References

• Failure in British government: the politics of the poll tax, David Butler, Andrew Adonis & Tony Travers. Oxford University Press, Oxford, 1994. ISBN 0-19-827876-4
• Poll Tax Rebellion, Danny Burns. AK Press, Stirling, Scotland, 1992.
• Paul Bagguley, "Protest, poverty and power : a case study of the anti-poll tax movement", Sociological review, 1995, vol. 43, n° 4, pp. 693-719
• Anti-Poll Tax Community based campaign