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Poll Tax

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History

Prime Minister Margaret Thatcher introduced the Community Charge or Poll Tax in Scotland in 1989 and in Wales and England in 1990. The tax replaced domestic rates with a new way of providing funds to local authorities: levying a compulsory per capita, fixed-rate tax from all adult residents, with the exact amount set at the local level. The Poll Tax was one of the main proposals of the 1987 Conservative Manifesto.

There is historical consensus that the unpopularity of the Poll Tax contributed significantly to the end of Margaret Thatcher’s tenure, eventually leading to her resignation in 1990. As a result of the Poll Tax, Thatcher faced opposition from across the political spectrum, and riots against the Poll Tax broke out across the UK in March 1990.

The Council Tax replaced the Poll Tax in 1993 and is assessed according to the estimated market value of a property and different bands of value.

Poll Tax history

The idea of a community charge originated with the Adam Smith Institute. Thatcher adopted it as a more lucrative alternative to domestic rates.

The old domestic rates system

The Poll Tax was intended to abolish the old domestic rates system, which provided funds for local council services by taxing property rather than people, i.e., only the householder had to pay the rates.

Householder

The householder is the head of a household who either owns or rents the property in which they live.

The old tax system relied on the propertys rental value, that is, how much the landlord could charge to rent it to potential tenants.

Rebates were introduced for those who could not afford to pay the rates. Householders could be reimbursed up to 100 per cent of the fees paid until 1988 when the maximum rebate amount was capped at 80 per cent.

Problems with the domestic rates system

Thatcher believed taxing only the householder was an unfair tax system. Let us consider an example.

In a one-person household, the householder would be responsible for paying the rates. Only the householder would have to pay the tax in a household with five adults, even though the other four residents would also benefit from council services the municipality provided.

Thatcher also found fault with the generous rebate system, which resulted in eight per cent of the population paying nothing and another nine per cent paying virtually nothing in domestic rates. In her view, this meant citizens were not holding their councils accountable for the funds spent and the services provided, as fewer and fewer people were personally contributing to the rates.

Domestic rates were widely unpopular because they hit poorer families the hardest. Lower-income families paid a higher percentage of their income than higher-income families, even though higher-income families generally lived in higher-value properties taxed at a higher rate than those of lower-income families.

The Adam Smith Institute

Douglas Mason of the Neoliberal think tank Adam Smith Institute proposed the idea of a fixed-rate per-capita tax. The idea was that such a tax would raise a larger sum for local governments because more people were eligible to pay the Community Charge (38 million) instead of the 14 million who paid local taxes before the policy was adopted.

Thatcherism

The ideology of Margaret Thatcher is known as ‘Thatcherism’. The Poll Tax is a Thatcherite policy because it relies on the Thatcherite ideal of individual responsibility. According to Thatcher, individuals must take responsibility for their own lives and contribute to society to benefit from it.

Thatcher recognised that under the old rating system, many residents of the United Kingdom benefited from local government services without contributing, as the responsibility for paying domestic rates rested solely with householders.

Poll Tax facts

The motivations for the Poll Tax were as follows:

  • Raising more funds for local councils, since more adults had to pay the Poll Tax.
  • Providing a fairer approach to household charges, since everyone living in a council area would pay for the council’s services they used, such as waste collection and street cleaning.

  • Holding councils accountable: if all residents of a council area have to pay, they become ‘customers’ who can demand quality services from their councils, thus holding them accountable.

  • Voting out Labour-led councils: by making local councils accountable to their electorates, Thatcher aimed to ensure that voters dissatisfied with how taxpayers’ money was being spent voted out of office the high-spending Labour-led councils.

Description of the Poll Tax

The Community Charge was a flat-rate, per-capita tax payable by all adults over 18. All 38 million adults eligible to vote in general elections in the UK had to pay the tax, which is why it is called a ‘poll tax’; it was about taxing people and not property.

In 1987, the government had announced the average amount of council tax payable would be £180 per person per year. However, in 1990, the first year of its implementation in England, the average Community Charge tax was about £360 per person per year.

Key differences between the Poll Tax and domestic rates

Domestic rates

Poll Tax

A tax on property.

A tax to be paid by individual adults.

A rating system based on the rental value of the householder’s property.

A flat-rate tax that did not take into account property value.

Only 14 million householders had to pay the tax.

Every adult in the United Kingdom had to pay it, which means 38 million adults would be liable to pay the Poll Tax.

Exemptions and reductions

Some demographics were exempt, such as diplomats, convicted persons, and religious communities. There were reductions of up to 80 per cent for students and benefit claimants.

Transitional relief allowances were introduced to limit the initial amount of Poll Tax a household had to pay to mitigate the amount lost in the transition from one tax system to another.

Nevertheless, every adult except those exempt from the tax still had to pay at least 20 per cent.

Problems with the Poll Tax

While the Poll Tax intended to replace the regressive domestic rates system, it became an even more regressive tax.

Many considered the Poll Tax regressive and unfair. The tax hit low-income individuals and families the hardest because all adults had to pay the same amount regardless of income. By default, the Poll Tax took a larger percentage of low-income individuals than high-income individuals.

Poll tax example

Under the old domestic rate system, owners of the properties with the highest rental value used to have to pay thousands in domestic rate tax. With the Poll Tax, the owners of luxurious homes could reduce their expenses by thousands, as they now only have to pay the same flat-rate tax as all other residents of a local area, not exceeding several hundred pounds.

Collecting the Poll Tax was also much more difficult and costly. The collection of domestic rates was easier in comparison, as houses and their owners could be easily identified. However, it was more difficult to reach all adults in the UK (especially those who lived in campervans or moved frequently) and get them to register for and pay the Poll Tax. It was estimated that collecting the Poll Tax cost two and a half times as much as collecting domestic rates.

Historiography

Political scientists Anthony King and Ivor Crewe argue in their book The Blunders of our Governments:

‘The Thatcher government’s introduction of a poll tax in the 1980s was a colossal blunder... The poll tax failed to achieve its objectives, led to rioting in the streets, wasted many millions of pounds, occasioned much human misery and ultimately cost the prime minister her job.’

Opposition to the Poll Tax

The Poll Tax faced opposition from all sides: by its own party, opposition, and widespread public disapproval throughout the UK. The exemptions and reductions the government introduced did little to appease the public’s discontent.

‘Can’t pay, won’t pay’ campaign in Scotland

When the Poll Tax was introduced in Scotland, the Scots were the first to rebel against it. The ‘Can’t pay, won’t pay’ campaign was an anti-Poll Tax campaign by the Scottish National Party (SNP), which focused on non-registration and non-payment.

The introduction of the Poll Tax in Scotland further increased the SNP’s popularity, as its arguments for the perceived ‘trial-run’ of the Poll Tax policy in Scotland strengthened the devolving government powers there.

Some 4 million Scots refused to pay the levy.

Poll Tax Can't Pay Won't Pay was the slogan of the Scottish campaign against the Poll Tax StudySmarterOpposition spreads: anti-Poll Tax stickers from Luton in 1990 use the same slogan as the Scottish anti-Poll Tax campaign, Wikimedia Commons

Poll Tax demonstrations

The initially peaceful protests against the Poll Tax quickly turned violent. While only 60,000 protesters were expected, 200,000 people turned out for the demonstration in Trafalgar Square on 31 March 1990.

Poll Tax riots

The protests saw scuffles and brawls between demonstrators and police, which escalated into a riot: cars were torched, and stores looted. Police arrested 339 protesters.

Poll Tax Protesters at the Poll Tax Riot on 31 March 1990 StudySmarterPoll Tax protesters in 1990, James Bourne on Wikimedia Commons

The Poll Tax and the fall of Margaret Thatcher

Thatcher had faced opposition in the lead-up to implement the Poll Tax but not like the one she would face after its implementation.

The strong convictions that earned Thatcher the admiration of members of her party were also what brought about her downfall. Even in the face of staunch opposition from her party (Conservative MPs such as Edward Heath and Michael Heseltine were two of the tax’s primary opponents), Thatcher refused to budge from her policies. This earned the Poll Tax a reputation as Thatcher’s hubris, as she had too much confidence in her convictions and pushed them too far.

The government’s popularity declined rapidly during this period, primarily due to the Poll Tax. Thatcher had become so unpopular that the Conservatives began to fear losing the next general election. This prompted Michael Heseltine to question her leadership.

Poll Tax Michael Heseltine strongly opposed the Poll Tax and challenged Margaret Thatcher's leadership StudySmarterMichael Heseltine in 2013: Michael Heseltine challenged Thatcher’s leadership in 1990 and went on to be Deputy Prime Minister in the John Major ministry (199597), Chatham House on Wikimedia Commons

In November 1990, Thatcher won the first ballot of the leadership election, but Heseltine received enough votes to call a second ballot, prompting Thatcher to resign on 28 November 1990.

The end of the Poll Tax

John Major replaced Margaret Thatcher as Conservative leader after her resignation. Major, eager to separate the Poll Tax from the Tory party, promised to abolish the charge.

On 21 March 1991, the abolition of the Poll Tax was announced. In 1993, the Council Tax system replaced the Poll Tax system, taking into account property value according to different bands of value. The Council Tax system is still in effect today.

Poll Tax - Key takeaways

  • The Community Charge, also known as the Poll Tax, was introduced in Scotland in 1989 and in England and Wales in 1990. It sought to tax the 38 million adults legible to vote in general elections in the UK at a rate of £180 per person per year. Reductions and transitional allowances were introduced to mitigate the cost.
  • The domestic rates system was a tax on the property that provided funds for local councils.
  • The domestic rates were considered regressive, and rebates were introduced to mitigate costs for low-income households.
  • The Poll Tax was a crucial Thatcher Party measure that led to the fall of Margaret Thatcher.
  • Thatcher got the idea for the fixed-rate, per-capita Community Charge from the Neoliberal think-tank Adam Smith Institute. The idea fit well with the ideology of Thatcherism because it promoted individual responsibility.
  • The main motive for the Poll Tax was to make local councils accountable to the electorate, who would thus become ‘consumers’ of their services.
  • The main problem with the Poll Tax was that it was an unfair, regressive tax. Citizens and many Conservative Party members agreed on this. The aggressiveness of the Poll Tax caused the public to rebel against it, leading to ‘Can’t pay, won’t pay’ campaign and the 1990 riots against the Poll Tax.
  • Michael Heseltine, who opposed the Poll Tax, challenged Thatcher’s leadership in November 1990 and received enough votes to call a second ballot. Thatcher was driven to resign, thus bringing about 11 years of the Thatcher government.

¹Anthony King and Ivor Crewe, The Blunders of our Governments, 2013

Poll Tax

A poll tax is levied on every liable individual at a fixed sum, regardless of income. The term ‘poll’ means head, so it is also known as a ‘head tax’. The Community Charge introduced in 1989 by Margaret Thatcher came to be known as ‘the Poll Tax’ as it was by nature a poll tax: it sought to charge every individual ‘head’ the same amount.

The Poll Tax was introduced in 1989 in Scotland, and in 1990 in England and Wales. Prime Minister Margaret Thatcher introduced the Poll Tax and it was a highly unpopular policy.

Council Tax replaced the Poll Tax in 1993. The difference between the Poll Tax and the Council Tax is that Council Tax relies on the estimated value of properties according to different bands of value. On the other hand, the Poll Tax was a flat-rate, per-capita tax, meaning that every adult had to pay the same amount, irrespective of the value of the property they occupied.

The policy was abolished in 1991 and replaced by Council Tax in 1993.

Final Poll Tax Quiz

Question

What is the Poll Tax?

Show answer

Answer

  • The Poll Tax was introduced in Scotland in 1989 and in England and Wales in 1990.
  • It replaced domestic rates with a new way of providing funds for local authorities: levying a compulsory, fixed-rate, per-capita tax on all adult residents.
  • 38 million adults in the UK were liable to pay the Poll Tax.
  • Initially, the average amount of Poll Tax was meant to be £180 per person per year, but the average charge was £360 a year in 1990.

Show question

Question

What was the old domestic rates system?

Show answer

Answer

  • The domestic rates system provided funds for local council services by taxing property (the householder), rather than people.
  • The old taxation system was based on the rental value of a property
  • Rebates were introduced for those who could not afford to pay the rates. Householders could get up to 100 per cent of the rate fees paid back to them until 1988 when the maximum rebate amount was capped at 80 per cent.

Show question

Question

What is the origin of the Poll Tax and how is it a Thatcherite policy?

Show answer

Answer

  • The Poll Tax idea originated from the Neoliberal think-tank Adam Smith Institute put forward the idea of a fixed-rate, per-capita tax.
  • The Poll Tax was a Thatcherite policy because its per-capita approach placed responsibility on individuals. A key feature of Thatcherism is a belief in individual responsibility.

Show question

Question

Summarise the motivations behind the Poll Tax.

Show answer

Answer

  • Raising more funds for local councils, since more adults had to pay the Poll Tax.
  • Providing a fairer approach to household charges, since everyone living in a council area would pay for the council’s services they used, such as waste collection and street cleaning.
  • Holding councils accountable: if all residents of a council area have to pay, they become ‘customers’ who can demand quality services from their councils, thus holding them accountable.
  • Voting out Labour-led councils: by making local councils accountable to their electorates, Thatcher aimed to ensure that voters dissatisfied with how taxpayers’ money was being spent voted out of office the high-spending Labour-led councils.

Show question

Question

Outline the exemptions and reductions to the Poll Tax.

Show answer

Answer

  • Diplomats, convicted persons, and religious communities were exempt.
  • There were reductions of up to 50 to 80 per cent for students and benefit claimants.
  • Every liable adult was still required to pay at least 20 per cent.
  • Transitional relief allowances were put in place.

Show question

Question

What were the main problems with the Poll Tax?

Show answer

Answer

  • It was unfair and regressive.
  • The tax hit low-income individuals and families the hardest, as all adults had to pay the same amount, regardless of income.
  • The Poll Tax was also much more difficult and costly to collect. It was estimated that collecting the Poll Tax cost two and a half times more than collecting domestic rates.

Show question

Question

How did political scientists Anthony King and Ivor Crewe describe the Poll Tax?

Show answer

Answer

‘The Thatcher government’s introduction of a poll tax in the 1980s was a colossal blunder...The poll tax failed to achieve its objectives, led to rioting in the streets, wasted many millions of pounds, occasioned much human misery and ultimately cost the prime minister her job.’

- King and Crew, The Blunders of our Government, 2013.

Show question

Question

What is the ‘Can’t pay, won’t pay’ campaign?

Show answer

Answer

  • It was an anti-Poll Tax campaign of non-registration and non-payment held by the Scottish National Party (SNP).
  • Some 4 million Scots refused to pay the levy.

Show question

Question

What were the 1990 Anti-Poll Tax Riots?

Show answer

Answer

  • The initially peaceful protests against the Poll Tax quickly turned violent. While only 60,000 protesters were expected, 200,000 people turned out for the demonstration in Trafalgar Square on 31 March 1990.
  • The protests saw scuffles and brawls between demonstrators and police, which escalated into a riot: cars were torched, and stores looted. Police arrested 339 protesters.
  • The police arrested 339 protesters.

Show question

Question

How did the Poll Tax contribute to Thatcher’s downfall?

Show answer

Answer

  • Thatcher’s refusal to back down on the policy lost her a lot of popularity with the public and with members of her own party. Conservative MPs were so opposed to the Poll Tax that in November 1990, Michael Heseltine challenged her leadership and ran in the leadership elections.
  • He got enough votes to call a second ballot, at which point Thatcher resigned.

Show question

Question

When was the Poll Tax abolished?

Show answer

Answer

On 21 March 1991, Prime Minister John Major announced the abolition of the Poll Tax. In 1993, the Council Tax system replaced the Poll Tax.

Show question

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