Personal convictions of the prime minister/party leader

Case Study The Poll Tax

The Poll Tax or Community Charge was a policy disaster for the Conservative government and for Mrs Thatcher. The National Archives reveal how the policy was dominated by the personality of Mrs Thatcher. 

The poll tax was supposed to make local council finance fairer and more accountable. Instead it triggered civil disobedience and riots and a rebellion in the Conservative Party.

Cabinet papers for 1989 and 1990, released in December 2016 at the National Archives in Kew, reveal the reaction to the crisis at the heart of government. They show how involved the prime minister herself was. And they pinpoint the moment it dawned on her that her flagship policy had turned into a political disaster which was hitting, not Labour local councils, but her natural supporters.

Though simple in principle the tax proved to be immensely complex in practice. The files are full of highly technical papers - many of them annotated by Mrs Thatcher.

Instead of the tax shining a spotlight on spendthrift local councils, she said, the government was getting the blame for high charges, and the impact was falling on those in middle income groups, what she called the "conscientious middle".

Major agreed with the need for what he called a "radical review" to find a way to cap charges and give local authorities more money, but without increasing overall public expenditure.

Over the next two months the files reveal a succession of crisis meetings as ministers desperately tried to find a way out of their predicament, including the perceived unfairness of a system in which "Dukes and dustmen" both paid the same.

Not only was it seen as massively unfair against the poor, a decision was made to introduce the tax in Scotland one full year before England and Wales, causing Scotland to be referred to as Thatcher’s guinea pig. The policy became strongly associated with the PM and the archive show that it really was.

The warning signs were there. Thatcher was guest of honour at the 1988 Scottish Cup final between Celtic and Dundee Utd when the whole of Hampden Park showed her red cards and chanted against her and the forthcoming tax.

One idea was to raise more money. Should councils be allowed to use cash from the sale of council houses to subsidise the poll tax? Or should people on higher incomes pay more? That idea was floated by the prime minister herself in an unusual signed "personal minute" to Major on 9 April.

Patten and the local government minister Michael Portillo wanted to increase central government grants to local authorities. Mrs Thatcher wasn't having it. "No," she wrote firmly in the margin on one occasion.

Then she and Major, without apparently consulting Patten, came up with an idea for allowing local councils to levy a higher poll tax than stipulated by central government, provided they first put it to a local referendum (a "poll tax poll").

Patten was opposed, believing the necessary legislation would be "massive in its political significance" and difficult to get through Parliament. One of Mrs Thatcher's private secretaries, Barry Potter, suggested that Patten was feeling "bruised" at being ignored.

By the end of June Potter told the prime minister that Patten and Portillo, still arguing for more government funds, were now "isolated".

Today Michael Portillo says he and Chris Patten really wanted to find a way effectively to abolish the poll tax: "We wanted to take the guts out of it, take the bits that were hurting out of it… but we recognised for her sensitivity that it would still have to be called the poll tax."

The poll tax was a policy personally associated with Thatcher and demonstrates how the prime minister is able personally to dictate and decide policy. However, this power is a double edged sword since it cut both ways when the policy became a failure, she was personally blamed.

The poll tax policy, and especially Thatcher’s handling of it, highlighted growing concerns within her own party of her inability or unwillingness to listen to others.

Major poll tax riots broke out in London and elsewhere in March 1990, often ending in violence. There were 100 injuries and 400 arrests following the anti-poll tax rally in central London. There was also a major civil disobedience campaign of non-payment.

The internal opposition within Thatcher’s own party sparked a leadership challenge against her by former cabinet minister Michael Heseltine. Thatcher failed to win sufficient votes in the first ballot to be assured of final victory and was, somewhat reluctantly, persuaded to step down rather than face the possible ignominy of defeat in the second ballot.