Lessons from the British Poll Tax Disaster**

persuaded the central government to imAs a means of financing British local plement reforms. Nevertheless, the local property tax government, the attempt to replace the rescontinued to be a source of discontent idential property tax with a community within the Conservative Party. A combicharge, or poll tax, has proved disastrous. nation of events in 1985 gave added imYet underlying the reform was the intelpetus to the search for an alternative. A lectually appealing notion of seeking to revaluation of the tax base in Scotland enhance accountability in local governgave rise to large increases in local propment affairs. This paper traces the origins erty taxes for many natural Conservative of the poll tax, describes how it was insupporters. In addition, the Thatcher govtended to operate, documents the impleernment was becoming increasingly exmentation difficulties, and analyzes the asperated at its failure to control local reasons for its failure. It concludes that the government. It had sought to use the sysnotion of accountability underlying the poll tem of grants-in-aid to local government tax is flawed, and that mistakes were made to secure expenditure control, but this in implementation. Many of the lessons policy failed, and led to many unanticilearned are of general applicability. pated problems which were criticized in a series of official reports (Audit CommisU NTIL 1989, British local government sion, 1984, National Audit Office, 1985). had available only one source of local Moreover, Mrs. Thatcher's 1974 pledge to taxation: the local property tax, known as "do something" about the rates made her the rates. This tax was levied on both ressympathetic to reform. idential and non-residential (business) As a result, in 1986 the national govproperty, the tax base being the notional emment produced a consultation docurental of the property at some point in ment entitled Paying for Local Govemtime.' The property tax had withstood the ment (Department of the Environment, test of time-indeed it is possible to trace 1986). This proposed three major reforms its origins to the Poor Law Relief Act of to local government finance: a revision of 1601 (Topham, 1983). However, there althe system of central government grantsways existed a tension between its role as in-aid; the replacement of the local nonan onerous tax (related to ability to pay) residential property tax by a national and a beneficial tax (related to benefits business property tax, unrelated to local received). In addition, the large variagovernment expenditure; and the replacetions in tax bases between different parts ment of the residential property tax by a of the country gave rise to apparent *in" flat rate community charge-or poll taxequities. It was these considerations that to be levied on all adults living in a ju encouraged Margaret Thatcher' to pledge risdiction. These policies were included in in the election campaign of October, 1974 the 1978 Conservative national election that a future Conservative government . festo, and, after the election was won, would abolish the rates within the lifeman' time of a Parliament. However, that elecMrs. Thatcher claimed it was to be the tion was won by the Labour Party, and "flagship" of her new administration. The the commitment to abolition was dropped proposals were enacted virtually intact by the Conservative Party. There were (UK Government, 1988), and were implesubsequent reviews of the rates, the latmented first in Scotland in 1989, and then est of which was in 1981 (United Kingin England and Wales in 1990. dom Government, 1981). None of these In the event, the poll tax proved to be one of the most disastrous domestic poli*University of York, York, United Kingdom. cies enacted by a British government since