What exactly did Thatcher do?

[nw1]

How much more controversial was it than the current system of Council Tax? What disadvantages did it hold that saw it vilified, whilst Council Tax is acceptable?

Everyone in a dwelling had to pay the charge separately, and it added up to more than a single council tax bill?

 

[edwin_m]

Everyone in a dwelling had to pay the charge separately, and it added up to more than a single council tax bill?

Other than (it says here) a reduced rate for students and unemployed, it took no account of property value or income, so no relation to ability to pay. The relationship between being registered to vote and having to pay created suggestions that the Tories were trying to suppress the votes of those less likely to vote for them.

 

[simonw]

How much more controversial was it than the current system of Council Tax? What disadvantages did it hold that saw it vilified, whilst Council Tax is acceptable?

The poll tax was a flat rate charge payable by all over 18s and as a flat tax was highly regressive. (With some exceptions,see wiki link)

The council tax has some relationship to house values - although 1991 values.
More detail here:

Poll tax (Great Britain) - Wikipedia

en.m.wikipedia.org

 

[PaulJ]

I guess one could discuss whether any tax is fair. What is advantageous to one person will disadvantage another. To be honest, I had no issue with Poll Tax. At the time, I living on my own and didn't see why I should pay the same as the house next door with 4 adults living there. Doubtless next door felt differently!
Additionally, I did feel at the time that the sake of council houses to their tenants was generally a good thing. This has subsequently turned out to be disastrous with rising homelessness, a lack of social housing and perceived landlord greed.

 

[Enthusiast]

The poll tax was a flat rate charge payable by all over 18s and as a flat tax was highly regressive. (With some exceptions,see wiki link)

Yes I know what it was as I paid it.

The council tax has some relationship to house values - although 1991 values.

Why should a local tax be based on house values? Council Tax takes no account of ability to pay. Many people live in valuable houses but have low incomes. As above, the current scheme has iniquities every bit as severe and was just as regressive as the Community Charge was.

 

[RogerOut]

Far better than the iniquitous council tax that replaced it and that has grown worse as the years have gone by without any adjustments.

True. Council tax is unfair because I could be on benefits or have a low paid job , yet pay the same council tax as my neighbour who earns £200k a year.
Council tax wasn’t better than poll tax.

Sadly it isn’t based on an individuals earnings.

 

[DynamicSpirit]

Why should a local tax be based on house values? Council Tax takes no account of ability to pay. Many people live in valuable houses but have low incomes. As above, the current scheme has iniquities every bit as severe and was just as regressive as the Community Charge was.

I somewhat agree, though I think the council tax is on balance at least somewhat more progressive than the poll tax, since wealthier people do tend to live in more expensive homes. But like you, I do find it puzzling that the poll tax attracted so much opposition and demonstrations when it was introduced yet the council tax - which is a bit fairer but not that much fairer - attracted almost no opposition or anger at all.

Having said that, one big advantage of the council tax over the poll tax is that it's much easier to collect. With the poll tax, it was almost impossible for councils to keep track of and therefore charge people who rented and might move homes frequently, and that lead to very high rates of non-payment (I see on a bit of Googling that in some places non-payment was believed to be as much as 30% of the population!). By contrast, it's easy to know exactly what houses and flats exist and therefore very easy to send a bill to each one, and to follow up if the bill isn't paid.

 

[TrainGeekUK]

I remember well the riots that the poll tax created and it was only when Major got in that it was scrapped.

It was certainly one of the biggest misjudgments made by Mrs Thatcher, and although she believed firmly what she was doing was correct, she alienated many in her tenure.

 

[Mr. SW]

It was certainly one of the biggest misjudgments made by Mrs Thatcher

No it wasn't. It was a deliberate and calculated attack on the low paid and local authorities (particularly Labour run) whilst rewarding the rich and Tory run councils. I cannot find any other logical reason for it. Don't forget it was introduced a year earlier in Scotland to punish the locals for the audacity to eat porridge and wear kilts.

Nothing Thatcher did was misjudged. She thought it all through.

 

[Thornaby 37]

No it wasn't. It was a deliberate and calculated attack on the low paid and local authorities (particularly Labour run) whilst rewarding the rich and Tory run councils. I cannot find any other logical reason for it. Don't forget it was introduced a year earlier in Scotland to punish the locals for the audacity to eat porridge and wear kilts.

Nothing Thatcher did was misjudged. She thought it all through.

It could also be added that it was Thatcher's way of punishing those who didn't vote Tory.
If I remember correctly, the number of Tory MPs in Scotland at the time was in single figures

 

[DynamicSpirit]

No it wasn't. It was a deliberate and calculated attack on the low paid and local authorities (particularly Labour run) whilst rewarding the rich and Tory run councils. I cannot find any other logical reason for it.

You obviously haven't thought very hard then - because I can think of a perfectly logical reason for why the Government would have wanted to introduce the poll tax that doesn't involve imagining some kind of bad faith by the Government or some strange desire to attack lots of voters: The rating system was generally considered at the time to be in need of reform, and there was a serious argument being made that, since each person tended to benefit equally from the services the council provided, it was only fair that each person paid roughly the same towards them (if this seems unfair today, bear in mind that at the time, what people paid in rates was much less than what people typically paid in taxes, so you were talking about a small proportion of what people paid in taxes. Also, the poll tax did provide discounts for people who were unemployed and at the time there wasn't a big political issue of in-work poverty in the way there is today, so many people would have considered it reasonable to assume that anyone in work could afford to pay a poll tax).

Separately from that, a big political issue at the time was that many people and most Conservatives believed (arguably with some justification) that lots of councils were being profligate and wasteful with public money, and wanted some system that would discourage them from over-spending. It was a different World from today: Councils were not so cash-strapped as today and there were fewer restrictions on what they could spend money on, and there was a fairly recent history of a few Labour-run councils deliberately seeking to spend to bankruptcy apparently mainly in order to make political points). The argument was being made that, if everyone paid the same amount, that would increase transparency of how much councils were spending and therefore encourage councils to be more efficient.

In that context, it's not at all hard to see how lots of people might have been convinced that the poll tax would be a good idea. Of course, the hindsight of history shows otherwise but - it's easy to criticise decisions in the past when you already have that hindsight.

Nothing Thatcher did was misjudged. She thought it all through.

Well she clearly misjudged to the extent that she didn't anticipate the poll tax would be so unpopular and would lead almost directly to her downfall.

 

[nw1]

No it wasn't. It was a deliberate and calculated attack on the low paid and local authorities (particularly Labour run) whilst rewarding the rich and Tory run councils. I cannot find any other logical reason for it. Don't forget it was introduced a year earlier in Scotland to punish the locals for the audacity to eat porridge and wear kilts.

Nothing Thatcher did was misjudged. She thought it all through.

It ended her premiership though, so if it was deliberate, she wasn't that smart.

I somewhat agree, though I think the council tax is on balance at least somewhat more progressive than the poll tax, since wealthier people do tend to live in more expensive homes. But like you, I do find it puzzling that the poll tax attracted so much opposition and demonstrations when it was introduced yet the council tax - which is a bit fairer but not that much fairer - attracted almost no opposition or anger at all.

Remember also that students had to pay a discounted version of the poll tax - whereas if all people in a house are students, then no council tax is payable at all.

It would be even more the case for multiple employed people living in a smaller house (as is common in urban areas): Council Tax not so much, but the poll tax would have been very expensive.

 

[Enthusiast]

It would be even more the case for multiple employed people living in a smaller house (as is common in urban areas): Council Tax not so much, but the poll tax would have been very expensive.

So do you think it's fair for the Council Tax levied on a house occupied by two people living on small pensions to be the same as that levied on a similar house containing five working adults? In a house near me, there is just that - five working adults. All have good jobs (one is a train driver) and I imagine the joint income for the household must be in the region of a quarter of a million pounds a year. In the house next door to them lives a retired couple living on their State Pensions and two small occupational pensions (so no Pension Credit and the "goodies" that go along with it - such as Council Tax Reduction - for them). Both households pay the same Council Tax.

I would argue that the Council Tax system is just as unfair as the Community Charge was. In fact, in many respects more so. But one seemed to be meekly accepted when it was, in principle, no different to and equally iniquitous as the Domestic Rates system that had gone before it, whilst the other led to riots in Trafalgar Square and the downfall of one of the most effective Prime Ministers the UK has ever had. I Often wonder why that was.

 

[Statto]

The poll tax backfired when Thatcher's supporters realised they'd each have to pay the tax regardless how many people over 18 that lived in the property, for example a couple of people living permanently in the same mobile home on modest income were being charged £500 each for poll tax, were a multi billionaire with a £10 million property in the same borough would be charged the same £500 too, Thatcher became deeply unpopular with her own supporters after this.

The poll tax started Thatcher's downfall, it was her attitude to Europe & Geoffrey Howe's resignation speech that finished her off

 

[GRALISTAIR]

The poll tax started Thatcher's downfall, it was her attitude to Europe & Geoffrey Howe's resignation speech that finished her off

That is my recollection of events too.

 

[TrainGeekUK]

I wonder how she would have got on with Donald Trump?

 

[Mr. SW]

You obviously haven't thought very hard then - because I can think of a perfectly logical reason for why the Government would have wanted to introduce the poll tax that doesn't involve imagining some kind of bad faith by the Government or some strange desire to attack lots of voters: The rating system was generally considered at the time to be in need of reform, and there was a serious argument being made that, since each person tended to benefit equally from the services the council provided, it was only fair that each person paid roughly the same towards them (if this seems unfair today, bear in mind that at the time, what people paid in rates was much less than what people typically paid in taxes, so you were talking about a small proportion of what people paid in taxes. Also, the poll tax did provide discounts for people who were unemployed and at the time there wasn't a big political issue of in-work poverty in the way there is today, so many people would have considered it reasonable to assume that anyone in work could afford to pay a poll tax).

Separately from that, a big political issue at the time was that many people and most Conservatives believed (arguably with some justification) that lots of councils were being profligate and wasteful with public money, and wanted some system that would discourage them from over-spending. It was a different World from today: Councils were not so cash-strapped as today and there were fewer restrictions on what they could spend money on, and there was a fairly recent history of a few Labour-run councils deliberately seeking to spend to bankruptcy apparently mainly in order to make political points). The argument was being made that, if everyone paid the same amount, that would increase transparency of how much councils were spending and therefore encourage councils to be more efficient.

In that context, it's not at all hard to see how lots of people might have been convinced that the poll tax would be a good idea. Of course, the hindsight of history shows otherwise but - it's easy to criticise decisions in the past when you already have that hindsight.

Err... I remember the Poll Tax very well, thank you. And paid it. It was officially called the Community Charge, too.

But the old rates system was terrible, but instead of having some local income taxation or other phased charging system, or working with rogue councils, which were already being subjected to "rate-capping". (Some councils reacted by defiance. Liverpool springs to mind.) Thatcher took the easy way out in an act of collective punishment, and was almost certainly told at the time, even within her own party, that this policy would bring misery and heartache.

I seem to remember on introduction of the Community Charge, L B Wandsworth's charge was actually Zero, and LB City of Westminster was a just few pounds: both had Tory councils and/or returned Tory MPs.

The system that replaced it and continues today, is still crude and divisive, takes little account for the ability to pay, and is monstrously out of date.

But what did for the Community Charge was a whole host of reasons apart from the huge unpopularity: Defaulters, both actual and political; some councils actually increasing their revenue; errors during the changeover period; people not registering; difficulties in collection; etc., etc., etc.

But you need to remember this: Thatcher did not care.

 

[Busaholic]

I wonder how she would have got on with Donald Trump?

I suspect she wouldn't have got on any better than Theresa May did. Ronald Reagan was more her sort of man i.e. one she could get to do some of her bidding.

 

[Belperpete]

I wonder how she would have got on with Donald Trump?

Very badly, I suspect.

Whatever you might think of her policies, Thatcher was a conviction politician, and so would have thought very poorly of the kind of politician that Trump is. She also wasn't shy of speaking her mind, which wouldn't have gone down well with Trump, who doesn't like criticism.

But what did for the Community Charge was a whole host of reasons apart from the huge unpopularity: Defaulters, both actual and political; some councils actually increasing their revenue; errors during the changeover period; people not registering; difficulties in collection; etc., etc., etc.

Previously, those who received the largesse from the councils generally paid very little towards that cost. The community charge was designed to make people aware of how much their councils were spending by making it affect their pockets. It was quite obviously aimed at reducing the popularity of Labour councils supporting their poorer residents.

Of course, to do that, they had to make the poor pay significantly more than they had before. There was a massive outcry from poorly paid, who were going to be made significantly worse off. However, as a significant number of those were public employees, their view didn't count. I seem to recall significant protests from nurses, for example.

In the end, I think what did it for the poll tax was its impact on pensioners, who have traditionally formed a significant core of Tory support.