Thatcher's poll tax reforms alarmed ministers, new papers reveal
Margaret Thatcher's flagship poll tax reforms so alarmed her ministers that one even warned it could lead to people sleeping on the streets to avoid the charge, newly released government papers reveal.
Margaret Thatcher's flagship poll tax reforms so alarmed her ministers that one even warned it could lead to people sleeping on the streets to avoid the charge, newly released government papers reveal.
Files at the National Archives at Kew, west London, show how Mrs Thatcher repeatedly overrode warnings by ministers that replacing domestic rates - based on property values - with the flat-rate community charge'' as it was officially known would be a political disaster.
The introduction of the poll tax - from 1989 in Scotland and a year later in England and Wales - to widespread protests was widely seen as one of the key elements behind her downfall from No 10 in 1990.
She believed that the new system would deter high-spending Labour councils from putting up local taxes, hitting well-off Tory home owners while their own voters were largely unaffected.
But as ministers refined their plans, Welsh secretary Peter Walker was among those to speak out, warning that a proposal to exempt rough sleepers could have unintended consequences.
This would put an enormous loophole into the system and would be abused. Moreover, it would act as an incentive to people to sleep rough simply to make sure that they escaped having to pay at least 20% of the charge,'' he wrote.
While I appreciate that in practice it is highly unlikely that local authorities would be able either to track down people who sleep rough or to get any payment of the charge from them, a specific exemption could be seen as encouraging them to sleep on the street rather than in a hostel.''
Even environment secretary Nicholas Ridley - who was responsible for steering the legislation through parliament - was having misgivings.
In July 1987 he approached Mrs Thatcher to express his concern over the level of opposition he was facing from councils over plans to phase in the poll tax over a period of years.
Mr Ridley called to see the Prime Minister this evening. He mentioned his growing concern about opposition to the community charge,'' a No 10 official noted.
This would be increased by the decision to have a transition rather than to abolish rates immediately. He showed some inclination to want to rethink quite major aspects of the community charge. The Prime Minister discouraged this firmly.''
However chancellor Nigel Lawson, an early opponent of the poll tax, warned that dropping the transitional arrangements - as eventually happened - would leave them exposed to unacceptable political risks''.
I do not see how we could justify the capricious changes in local taxation which would follow,'' he wrote.
People, not councils, have votes. More people will pay; and there will be more losers than gainers. Such changes must therefore be introduced gradually and carefully if we are to avoid major problems.''