Community Charge
Encyclopedia
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 replaced by Council Tax
in 1993, two years after its abolition was announced.
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 differences in the amount charged between councils.
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 , to levy the rating system, despite some unionists calling for the province to have the same taxation system as Great Britain.
Owner-occupiers paid because they could not hide; for those in the expensive properties it cost less than rates had but for many it cost more; 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 greatly 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.
Central government imposed "collection targets".
The charge was 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.
, 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 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.
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.
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." The second year of the poll tax saw an increase in non-payment as people who had been wavering decided to join the non-payment campaign.
opposition, led by Neil Kinnock
, had benefited from it by a strong lead in the opinion polls. After the Poll Tax riots, Tory ministers contemplated abolition of the tax but knew that as a flagship Thatcherite policy its abolition would not be possible while Thatcher was still at the helm.Neil Kinnock
, Labour Party
and opposition leader at the time, had vowed to abolish the Community Charge if he won the next general election.
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. 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 early 1991 the Chancellor of the Exchequer
, Norman Lamont, announced a rise in Value Added Tax
from 15% to 17.5% to pay for a £140 reduction in the tax. The abolition of the Community Charge was announced on 21 March 1991.
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 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
, which ended in a fourth successive Tory victory, despite most opinion polls in the run-up to the election suggesting it would result in a hung parliament
or a narrow Labour majority.
Poll tax
A poll tax is a tax of a portioned, fixed amount per individual in accordance with the census . When a corvée is commuted for cash payment, in effect it becomes a poll tax...
", was a system of taxation introduced in replacement of the rates
Rates (tax)
Rates are a type of property tax system in the United Kingdom, and in places with systems deriving from the British one, the proceeds of which are used to fund local government...
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 replaced by Council Tax
Council tax
Council Tax is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country. It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge...
in 1993, two years after its abolition was announced.
Origins
The abolition of the rating systemRates (tax)
Rates are a type of property tax system in the United Kingdom, and in places with systems deriving from the British one, the proceeds of which are used to fund local government...
of taxes (based on the notional rental value of a house) to fund local government
Local government in the United Kingdom
The pattern of local government in England is complex, with the distribution of functions varying according to the local arrangements. Legislation concerning local government in England is decided by the Parliament and Government of the United Kingdom, because England does not have a devolved...
had been unveiled by Margaret Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
when she was Shadow Environment Secretary in 1974, and was included in the manifesto of the Conservative Party
Conservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
in the October 1974 general election
United Kingdom general election, October 1974
The United Kingdom general election of October 1974 took place on 10 October 1974 to elect 635 members to the British House of Commons. It was the second general election of that year and resulted in the Labour Party led by Harold Wilson, winning by a tiny majority of 3 seats.The election of...
. 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
Green paper
In the Commonwealth, the Republic of Ireland and the United States a green paper is a tentative government report of a proposal without any commitment to action; the first step in changing the law...
, 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
Greater London Council
The Greater London Council was the top-tier local government administrative body for Greater London from 1965 to 1986. It replaced the earlier London County Council which had covered a much smaller area...
and the six metropolitan county
Metropolitan county
The metropolitan counties are a type of county-level administrative division of England. There are six metropolitan counties, which each cover large urban areas, typically with populations of 1.2 to 2.8 million...
councils. The commitment to abolish the rates was replaced in the 1983 general election
United Kingdom general election, 1983
The 1983 United Kingdom general election was held on 9 June 1983. It gave the Conservative Party under Margaret Thatcher the most decisive election victory since that of Labour in 1945...
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
Rates Act 1984
The Rates Act 1984 is an Act of Parliament in the United Kingdom, which controls the tax-raising powers of local authorities.-Background:The Thatcher government had been at odds with several high spending Labour controlled councils...
.
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
Victor Rothschild, 3rd Baron Rothschild
Nathaniel Mayer Victor Rothschild, 3rd Baron Rothschild, GBE, GM, FRS was a biologist by training, a cricketer and a member of the prominent Rothschild family...
, William Waldegrave
William Waldegrave, Baron Waldegrave of North Hill
William Arthur Waldegrave, Baron Waldegrave of North Hill, PC , is an English Conservative politician who served in the Cabinet from 1990 until 1997 and is a Life Member of the Tory Reform Group. He is now a life peer. Lord Waldegrave is also the Chairman of the Rhodes Trust and the Chairman of...
and Kenneth Baker
Kenneth Baker
Kenneth Wilfred Baker, Baron Baker of Dorking, CH, PC , is a British politician, a former Conservative MP and a Life Member of the Tory Reform Group.-Early life:...
, 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 differences in the amount charged between councils.
Legislation
This proposal was contained in the ConservativeConservative Party (UK)
The Conservative Party, formally the Conservative and Unionist Party, is a centre-right political party in the United Kingdom that adheres to the philosophies of conservatism and British unionism. It is the largest political party in the UK, and is currently the largest single party in the House...
manifesto
Manifesto
A manifesto is a public declaration of principles and intentions, often political in nature. Manifestos relating to religious belief are generally referred to as creeds. Manifestos may also be life stance-related.-Etymology:...
for the 1987 General Election
United Kingdom general election, 1987
The United Kingdom general election of 1987 was held on 11 June 1987, to elect 650 members to the British House of Commons. The election was the third consecutive election victory for the Conservative Party under the leadership of Margaret Thatcher, who became the first Prime Minister since the 2nd...
. 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
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
, which continued, as it still does , to levy the rating system, despite some unionists calling for the province to have the same taxation system as Great Britain.
Implementation
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).Owner-occupiers paid because they could not hide; for those in the expensive properties it cost less than rates had but for many it cost more; 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 greatly 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.
Central government imposed "collection targets".
The charge was 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
Poll Tax Riots
The UK Poll Tax Riots were a series of mass disturbances, or riots, in British towns and cities during protests against the Community Charge , introduced by the Conservative government led by Prime Minister Margaret Thatcher...
. 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
Trafalgar Square
Trafalgar Square is a public space and tourist attraction in central London, England, United Kingdom. At its centre is Nelson's Column, which is guarded by four lion statues at its base. There are a number of statues and sculptures in the square, with one plinth displaying changing pieces of...
, 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 UnionsAnti-Poll Tax Unions
Anti-Poll Tax Unions were set up in local areas throughout Scotland, England and Wales to organise against the Community Charge brought in by Margaret Thatcher's Conservative government in 1989 and 1990 ....
, 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 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.
A Labour MP, and Militant Tendency supporter, Terry Fields
Terry Fields
Terence Fields was a British trades unionist and Labour Member of Parliament for Liverpool Broadgreen. He was a supporter of the Militant tendency.-Early life:...
, 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.
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." The second year of the poll tax saw an increase in non-payment as people who had been wavering decided to join the non-payment campaign.
Long-term effects
Ever since the Community Charge was announced, Tory support in the opinion polls had slumped and the LabourLabour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
opposition, led by Neil Kinnock
Neil Kinnock
Neil Gordon Kinnock, Baron Kinnock is a Welsh politician belonging to the Labour Party. He served as a Member of Parliament from 1970 until 1995 and as Labour Leader and Leader of Her Majesty's Loyal Opposition from 1983 until 1992 - his leadership of the party during nearly nine years making him...
, had benefited from it by a strong lead in the opinion polls. After the Poll Tax riots, Tory ministers contemplated abolition of the tax but knew that as a flagship Thatcherite policy its abolition would not be possible while Thatcher was still at the helm.Neil Kinnock
Neil Kinnock
Neil Gordon Kinnock, Baron Kinnock is a Welsh politician belonging to the Labour Party. He served as a Member of Parliament from 1970 until 1995 and as Labour Leader and Leader of Her Majesty's Loyal Opposition from 1983 until 1992 - his leadership of the party during nearly nine years making him...
, Labour Party
Labour Party (UK)
The Labour Party is a centre-left democratic socialist party in the United Kingdom. It surpassed the Liberal Party in general elections during the early 1920s, forming minority governments under Ramsay MacDonald in 1924 and 1929-1931. The party was in a wartime coalition from 1940 to 1945, after...
and opposition leader at the time, had vowed to abolish the Community Charge if he won the next general election.
For this among other reasons, Thatcher was challenged by Michael Heseltine
Michael Heseltine
Michael Ray Dibdin Heseltine, Baron Heseltine, CH, PC is a British businessman, Conservative politician and patron of the Tory Reform Group. He was a Member of Parliament from 1966 to 2001 and was a prominent figure in the governments of Margaret Thatcher and John Major...
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. All three of the contenders to succeed her pledged to abandon the tax.
The successful candidate, John Major
John Major
Sir John Major, is a British Conservative politician, who served as Prime Minister of the United Kingdom and Leader of the Conservative Party from 1990–1997...
, appointed his defeated rival Michael Heseltine to the post of Environment Secretary, responsible for replacing the Community Charge. In early 1991 the Chancellor of the Exchequer
Chancellor of the Exchequer
The Chancellor of the Exchequer is the title held by the British Cabinet minister who is responsible for all economic and financial matters. Often simply called the Chancellor, the office-holder controls HM Treasury and plays a role akin to the posts of Minister of Finance or Secretary of the...
, Norman Lamont, announced a rise in Value Added Tax
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
from 15% to 17.5% to pay for a £140 reduction in the tax. The abolition of the Community Charge was announced on 21 March 1991.
By the time of the 1992 general election, legislation had been passed replacing Community Charge with the Council Tax
Council tax
Council Tax is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country. It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge...
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
Council tax
Council Tax is the system of local taxation used in England, Scotland and Wales to part fund the services provided by local government in each country. It was introduced in 1993 by the Local Government Finance Act 1992, as a successor to the unpopular Community Charge...
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 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
United Kingdom general election, 1992
The United Kingdom general election of 1992 was held on 9 April 1992, and was the fourth consecutive victory for the Conservative Party. This election result was one of the biggest surprises in 20th Century politics, as polling leading up to the day of the election showed Labour under leader Neil...
, which ended in a fourth successive Tory victory, despite most opinion polls in the run-up to the election suggesting it would result in a hung parliament
Hung parliament
In a two-party parliamentary system of government, a hung parliament occurs when neither major political party has an absolute majority of seats in the parliament . It is also less commonly known as a balanced parliament or a legislature under no overall control...
or a narrow Labour majority.
See also
- Poll Tax RiotsPoll Tax RiotsThe UK Poll Tax Riots were a series of mass disturbances, or riots, in British towns and cities during protests against the Community Charge , introduced by the Conservative government led by Prime Minister Margaret Thatcher...
- Peasants' RevoltPeasants' RevoltThe Peasants' Revolt, Wat Tyler's Rebellion, or the Great Rising of 1381 was one of a number of popular revolts in late medieval Europe and is a major event in the history of England. Tyler's Rebellion was not only the most extreme and widespread insurrection in English history but also the...
- 14th-century rebellion against serfdomSerfdomSerfdom is the status of peasants under feudalism, specifically relating to Manorialism. It was a condition of bondage or modified slavery which developed primarily during the High Middle Ages in Europe and lasted to the mid-19th century...
and the imposition of a poll tax. - Tommy SheridanTommy SheridanTommy Sheridan is a Scottish socialist politician. He has had various prominent roles within the socialist movement in Scotland and is currently one of two co-convenors of the left-wing Scottish political party Solidarity....
, Scottish socialist who originally came to prominence protesting the Community Charge.