The Battle Ax and the Poll Tax
Cranston, Maurice
THE AMERICAN SPECTATOR VOL. 23, NO. 7 / JULY 1990 Maurice Cranston THE BATTLE AX AND THE POLL TAX May's local elections in Britain didn't turn out half as badly for Mrs. Thatcher as predicted,...
...Many British voters at the next parliamentary election will be old enough to remember what things were like under Harold Wilson, so that even if the economy does not improve in the next two years, they must surely hesitate—if they worry about inflation, unemployment, the balance of trade, industrial unrest, and the rest of it—to vote for a party with a worse record than the Conservatives in all those fields...
...Thatcher as predicted, suggesting that if she does a better job in elucidating the controversial Poll Tax, her Conservatives will remain in power...
...When continental politicians plead for a "closer union of Europe," for example, she wants to know whether they are inviting the bureaucrats of Brussels to take over the regulation of the twelve member states of the European Economic Community at the expense of those states' sovereignty...
...The more conservative budget of Lawson's successor, John Major, has evidently done something to repair the damage, but the economic health of Britain is still well below what it was in the first seven or eight years of Mrs...
...Thatcher and not the local Labour council was responsible for their high tax bills...
...In theory the Poll Tax sounds marvelous...
...For one thing, she no longer has her old partnership with Ronald Reagan on the center stage of world affairs...
...Thatcher could not well afford to lose their support...
...The structure was such—and for the most part still is—that the local governments controlled all the spending institutions in health, housing, education, social service, public libraries, sanitation, and so forth—while the central government had to find the greater share of the cost, a share that by 1989 had risen to 75 percent...
...M rs...
...In April of this year practically every Labour council set a high Poll Tax...
...and throughout the 1980s, even Conservative councillors, with their eyes on votes, were not always thrifty, while Labour councillors seemed to vie with each other in finding new outlets for profligate expenditure—lesbian leisure centers, black consciousness groups, graffiti painting classes were by no means the craziest objects on which public money was lavished by local councils while in Parliament the government was trying feverishly to cut back public expenditure to keep inflation down...
...As time went by, the rates yielded an ever smaller proportion, and the central government was called upon to contribute more and more...
...Thatcher was never wholly at ease with the Treasury line, and the economic adviser on her private office staff, Sir Alan Walters, was said to have pointed out to her the arguments against it...
...Thatcher's ideas about the free market and democracy in Eastern Europe and elsewhere seems to have left her out of step with other European leaders on the question of how to respond to the decline of Communism...
...For example, after Lawson's budget, a man in the lower income bracket of £12,000 a year found himself paying in taxes and such quasi-taxes as the "national insurance contribution" the same 30 percent of his earnings as a man in the £24,000 a year bracket...
...What appeared the simplest way to achieve this purpose was to modernize the valuations of property, and so increase the "rates" to meet all local expenditure and not just a quarter of it...
...There is something to be learned from studying how votes were cast in those local districts, or "wards" as they are called, which correspond to parliamentary constituencies...
...Moreover, the British people are saddled with various charges connected with the welfare state that are taxes in all but name, and these bear most heavily on the less well off...
...But among taxpayers in the middle range of incomes, losers were found to outnumber gainers by four to one, the average increase in local tax bills for them being some £200 a year...
...In 1986 the Conservatives lost more seats in local elections than they lost in those this year, and then went on to win a resounding victory in the 1987 general election...
...By "modernizing" rates the government found it had substantially increased the tax burden of householders and business people—the solid bourgeoisie to which Conservatives have traditionally looked for electoral support—while leaving everyone else untouched financially...
...Experience shows, however, that people do not vote the same way in local and national elections...
...He has also been fortunate that the leading Labour leftists, Michael Foot, Tony Benn, and their kind, have yielded the limelight to likable new men such as Bryan Gould and John Smith, lawyers who know how to charm the middle-class voters without antagonizing the workers...
...Lawson's 1987 budget is said to have helped the Conservative party win thegeneral election that followed soon afterward...
...After its success in London, the government is plainly not going to abandon the Poll Tax altogether, so it will have to concentrate on reforming it...
...That credit now goes to Douglas Hurd, a much more vigorous and eloquent foreign secretary than his predecessor, Geoffrey Howe, who always looked so dull and somnolent that he was widely assumed to be Mrs...
...She likes to hear plain speaking...
...Thatcher for what is disliked...
...This perception does not mean that the Poll Tax will continue to serve the electoral interests of Labour...
...As everyone knows, Lawson resigned from the government rather than tolerate the continued presence of his critic on Mrs...
...Thatcher's regime of thrift in public expenditure...
...the remainder had to be provided by the central government from funds raised by national taxation...
...If the Liberal Democratic party keeps up its momentum, Kinnock will be disappointed of his hopes of monopolizing the so-called anti Thatcher vote...
...By the date of the next general election the novelty will have worn off, voters in the country will catch up with those in London and become more aware of what their councils are spending, and revisions will probably have made the Poll Tax more equitable...
...Poll taxes have always been especially unpopular, as the example of the tax that preceded the Peasants' Revolt in England and the "capitation" that preceded the French Revolution are generally said to prove...
...I should expect him to succeed, and if he does so, Kinnock's chances of becoming the next British prime minister will be very much diminished...
...Thatcher for disturbing the noble harmony of words with such a brutal unveiling of meaning...
...She no longer even receives the credit when British foreign policy wins general approval...
...We have to look back some time for an explanation...
...The community charge, or Poll Tax, was finally chosen by the government for lack of a better alternative...
...What actually happened in the local elections was a swing of only 11 percent to Labour in England, while in Scotland the Conservative vote rose by 2.5 percent and in London the Conservatives captured two councils from Labour and substantially increased their majorities in the councils they already held...
...Already by 1960, these valuations had become so out of date that the "rates" yielded less than half the money needed to finance local governThe Conservatives now claim that they, and not Mr...
...Thatcher has no longer such widespread popularity or Kinnock such widespread unpopularity...
...Thatcher is said to have favored it because it seemed more fair than the rates: it would force all the people who used the services provided by local authorities to pay for them, and it would subject those authorities who wasted public funds to the wrath of the voters whose money they squandered...
...T here are other factors likely to 1 undermine Kinnock's chances...
...Thatcher is much too English to relish it...
...There is no question of making it popular, for as Mrs...
...What Heath did was to amalgamate the smaller town and county authorities of the nation into larger units so that they could have more efficient management...
...Thatcher's staff...
...The Institute of Fiscal Studies has compared the Poll Tax charges with last year's rates in a sample of 7,000 households...
...Thatcher, seeing both the unfairness of the reforms and the harm they had done to the Conservative interest in Scotland, called for the rating system to be abolished altogether in favor of a totally new system of financing local government...
...A more reflective political science is called for than that provided by their methods...
...Kinnock is in his element with this sort of thing, and not just because he is Welsh: but Mrs...
...The problem the Conservative government has to solve before the demands for local taxation are sent out in the spring of 1991 is that of making the Poll Tax tolerable to the party's natural friends...
...Various ideas were mooted in commissions set up to formulate proposals...
...No thinking voter, however, could expect the economy to do better under Labour...
...nor does it benefit much by alleviating the hardship of the very poor, who mostly vote Labour from habit...
...Thatcher looking an isolated figure nowadays at those summits where images seem to count as much as anything...
...People were encouraged to spend, to take advantage of easy credit at low interest rates: then, a few months later, interest rates were hiked substantially and inflation mounted...
...but elsewhere, Labour councils imposing a high Poll Tax did not lose as, in theory, they ought to have lost...
...Hurd, with his air of patrician and dynamic independence, is held responsible for what is liked about British diplomacy and Mrs...
...Thatcher's lap dog...
...the pound rose two cents on the foreign exchange and shares rose by nearly twenty-eight points on the stock market...
...Shrewdness has prompted him for some time now to adopt a posture of smiling incoherence, rather like that of Jimmy Carter at the time of his election to office...
...Thatcher declared that her policies had been vindicated...
...Harold Wilson once said that a week is a long time in politics, and much more than a week has to pass before the next British general election...
...His luck has been that the revolutionary changes in Eastern Europe in 1989 have diminished people's anxieties about defense, the one subject on which Kinnock's views are known and known to be unsound...
...Thatcher and past Labour failures owed something—perhaps rather less—to the personal unpopularity of Kinnock...
...its tax-cutting promises looked attractive, but its long-term effects, coupled with those of his cult of the Deutschemark, were not so good...
...Under Wilson's government the situation was much worse, particularly in the crucial matter of inflation, which was twice as bad as its worst under Mrs...
...Thatcher reached the very sensible conclusion that if local councils wanted to spend money in foolish ways they should raise it locally, and be answerable to their own electors for what they spent...
...Thatcher was able to stand beside Reagan as a formidable world leader...
...The Labour party, moreover, is still tied to the chief promoters of inflation in Britain, the trade unions...
...this is because the strongholds of the Liberal-Democrats are constituencies with leftof-center traditions, which Labour can hold when there is no credible left-ofcenter alternative, but which Conservatives can win when the opposition vote is divided by two left-of-center parties...
...This is largely because many voters, and notably those outside London, were persuaded that the central government of Mrs...
...The statistics show that among the top eight percent of households, there are mostly gainers...
...Ever since the early 1960s successive British governments have been trying to find an alternative to the traditional tax known as "rates" in financing local government...
...The idea of a local sales tax was turned down because it was thought to conflict with European Economic Community regulations governing the Value Added Tax...
...If British voters were to vote in a general election as they voted in the local elections in May, the Labour party would have a majority in Parliament of fifty seats or more...
...the result was to abolish towns and counties with long histories and loyalties and institute political communities with strange new names like Clwyd and Avon, administered by a new class of high-paid bureaucrats andruled by political enthusiasts lacking contact with ordinary voters, who often ceased to be aware of what local authority they had been attached to, and hence more apathetic than ever toward local government...
...Thatcher's time in office...
...Before the local elections in Britain in May, pollsters predicted widely that Neil Kinnock was on line to beat Margaret Thatcher in the next general parliamentary election...
...Such a study suggests at first sight that Kinnock has the support where he needs it most...
...Since sheknew more about international relations than he did, and he knew more about people than she did, each gained from their friendship, and Mrs...
...Thatcher is not a reluctant European...
...In the May elections those Conservative councils that set a very low Poll Tax increased their majorities...
...Thatcher is personally blamed for the consequences of policies forced on her by the Treasury, and notably those pursued when Nigel Lawson was Chancellor of the Exchequer...
...It will undoubtedly try hard...
...But here again Mrs...
...Nobody can quite makeout what Kinnock proposes to do about anything, but the noises he makes are reassuring...
...The experience of local government reform by that very progressive Tory Edward Heath in the 1970s was less than fortunate...
...Financial institutions breathed again...
...Before the May elections, it looked as if the center parties had written themselves out of history, and that the next election would really be a two-horse race between Conservative and Labour...
...As it stands, the system bears unduly on those who are neither rich nor poor...
...Even though it is difficult to read Kinnock's thoughts on most things, his party is committed to releasing the trade unions from the laws that now control their conduct, so that the accession of a Labour government to office would almost inevitably lead tomore industrial confrontation, more strikes, and more inflation...
...W hat clearly did put many British voters against Mrs...
...T he one factor that did most to I assure the Labour party its success in the May elections was the Poll Tax...
...Past Conservative successes evidently owed much to the personal popularity of Mrs...
...Kinnock, will win the next general election, which is bound by law to take place before the end of 1992...
...In the lowest income groups, people were found to benefit from tax exemptions...
...This, until its recent abolition, was a form of taxation imposed only on householders and owners of business premises, and was calculated on a theoretical rental value of the property...
...Why, then, did the Conservative government adopt it...
...They may easily do so again...
...How justified is their confidence...
...This method was tried in Scotland, and the result was an electoral disaster for the Conservative party in that kingdom...
...These administrative monstrosities that Heath introduced have done more than anything else to sabotage Mrs...
...Many center party votes are likely to be switched in a general election to the Conservatives, as they were in 1987...
...In sociological jargon, people in the upper-working • class and the lower-middle class were disappointed by the outcome of Lawson's budget, and since they represent an important section of the electorate, being that most prone to swing between Labour and Conservative, Mrs...
...The Conservatives now claim that they, and not Mr...
...14 THE AMERICAN SPECTATOR JULY 1990...
...Thatcher herself has said, no tax is popular...
...Thatcher in the meantime has had the bad luck to lose certain assets that cannot be replaced...
...Thatcher as a superwoman on the international scene would not in itself put off British voters, although it might prompt some to favor a change of national leadership, to ask themselves whether someone possessed of a different style—Michael Heseltine for example, with the Tarzan image he acquired when minister of defense—might not impose the national will more effectively on the world...
...As it turned out, only the Social Democratic party of David Owen and the Greens were cut down to size, while the Liberal Democratic party made a remarkable comeback by capturing 18 percent of the vote, thus disproving the pollsters' predictions that it would capture only seven percent...
...a few Conservative councils set a very low Poll Tax, and many Conservative councils set a moderate to high tax...
...Even with the limitations that the Conservative government has put on their excesses, the unions have this year succeeded in various key industries in pushing up the cost of labor by several points over the rate of inflation, and thus set the old spiral of wages and prices in operation once more...
...Thatcher, and caused the Conservative party to lose 359 seats in the local elections, was her government's economic record: inflation bordering on double figures annually, interest rates higher than they have ever been and set to stay high, the worst trade deficit in years, more strikes, public services working badly, and wages going up without any increase in industrial productivity...
...In a genuine three-party election, Mrs...
...The Conservative party does not prosper by making the rich richer, since they are usually Conservatives already...
...So while it is undoubtedly true that Kinnock would have won a 50-seat majority in Parliament if the local elections in May had been a general election, and if the people had voted on the party lines as they did, it does not follow that the people would vote the same way today, or that they will vote the same way in the summer of 1992...
...A local income tax, of the kind familiar enough in other countries, was considered, but rejected because it was thought to give too much power to local authorities who had already proved themselves to be irresponsible...
...but one might have expected a Conservative party to be suspicious of something that is theoretically sound but has no basis in history...
...but the rest remain intact, and they are the ones charged with operating the Poll Tax...
...Continental politicians tend in times of crisis or challenge to make utterances of elaborate and high-minded rhetoric that sound good in French or Italian or Greek, but commit them to nothing very clear and do not even sound good in English...
...Thatcher's chances of success are greater than those of Kinnock...
...Ironically, the very triumph of Mrs...
...thing, the smaller center parties have much more support in local than in national politics, if only because they are capable of winning seats in councils to an extent they are incapable of winning seats in Parliament...
...It would have the further advantage of compelling the British people, who have failed in recent years to take much interest in local politics, to wake up to their duties as citizens and democrats...
...Even so, the diminished stature of Mrs...
...She would like to see a loose association of every European state, including Hungary and Poland and other 12 THE AMERICAN SPECTATOR JULY 1990 Eastern countries as well as the twelve of the EEC, but as this project seems to resemble de Gaulle's old formula of L'Europe des patries, she is easily misrepresented as an out-of-date nationalist, which is how she is almost universally depicted in the European media today...
...For one Maurice Cranston is professor of political science at the London School of Economics...
...One thing the elections proved is that the pollsters got it wrong...
...All the public opinion surveys in April reported a swing of 20-25 percent in voters' intentions from Conservative to Labour...
...What made the situation worse was the peculiar structure of the British welfare state, which, like other welfare states, appears to generate as much waste as welfare...
...It will not be easy to make this tax tolerable...
...Since this is just about what they are doing, the continental politicians get cross with Mrs...
...Thatcher has said she intends torevise it, and there is obviously going to be a struggle in her cabinet over the type of revision that is to be adopted...
...This is not good for Mrs...
...Walters always favored letting market forces prevail...
...I n theory it sounds marvelous...
...She abolished one of them: Heath's Greater London Council...
...Kinnock, will win the next general election, which is bound by law to take place before the end of 1992...
...but one might have expected a Conservative party to be suspicious of something that is theoretically sound but has no basis in history...
...Kinnock's current prestige is due partly to political shrewdness and partly to luck...
...George Bush, with his altogether more aloof and reserved approach to diplomacy, is obviously no closer to Mrs...
...Since local governments had to fund only a quarter of what they spent, there was a temptation for them to spend extravagantly...
...Without knowing exactly what advice Sir Alan gave her, we may be sure, in the light of his published opinions, that he opposed Lawson's policy of going all out to prop up the pound through high interest rates and other forms of financial intervention to keep it in line with the Deutschemark...
...Chris Patten, the minister responsible for local finance, has every reason to think up something good, since he has seen the council of his own constituency, Bath, pass out of Conservative control...
...In England as in Scotland, the success of the Conservative party depends on the support of the middling sort of people...
...THE AMERICAN SPECTATOR JULY 1990 13 ment...
...Thatcher than he is to Francgds Mitterrand or Helmut Kohl, and this leaves Mrs...
Vol. 23 • July 1990 • No. 7
