Poll Tax and the Reform of Local Finance

Abstract

This chapter examines the battle over local government finance as it unfolded during the period of Thatcher’s third administration (1987–90). It begins by outlining the reform package which had at its centre the abolition of the rates and their replacement by the community charge or poll tax. It moves on to consider the early optimism of Thatcher and her key ministerial colleagues that they had drafted the final solution to the problem of local spending. The origins, motivations and rationale of the reform programme are examined. The remainder of the chapter recounts the dashing of the high hopes of the advocates of reform. The reform package as it was implemented caused the Thatcher administration a number of substantial problems and the political damage caused by the poll tax contributed to Thatcher’s removal from office in the autumn of 1990. A few months later the failure of poll tax was formally recognised by Michael Heseltine who declared that ‘the public have not been persuaded that the (community) charge is fair.’ He went on to announce the replacement of poll tax by a new system of local taxation as soon as practicable, possibly by April 1993.