In a new ten part series of articles, CHRIS ROBINSON traces the story behind the grassroots struggle against the poll tax – how it was organised, how it defeated this hated policy, and how the movement was instrumental in the downfall of Margaret Thatcher. ‘The lessons we learned yesterday, can be put into practice today.’

1

The Tory Flagship

“Every time I hear people squeal, I know we are right.” – Nicholas Ridley, Thatcher’s Environment Minister

Arrogance of power, and the absence of effective political opposition, launched the Tory flagship policy of 1987 – the poll tax. It was the organised working class that sunk it and rid them of the most unpopular prime minister of the 20th century, if not in British political history.
Two general election victories of 1979 and 1983, the defeat of the historic miners’ strike, and the internal muddle of a Labour Party split down the middle between the left and the Kinnockite right, gave the Tories the green light to replace the property-based rates that partially funded local authorities. It was to be a massive transference of wealth from the poor to the rich.

The poll tax was Thatcher’s next step in her permanent counter-revolutionary campaign to ‘roll back the frontiers of socialism’, all part of the Tories’ monetarist agenda to turn back the post-1945 political gains that had benefited the working class and had been largely underwritten by the prolonged post-war boom that had lasted up until the early 1970s.

1987, third election victory – the high tide of Thatcherism

The twin thorns in the Thatcherite side – Thatcher’s own pet hates – had always been the threat of the organised working class embodied in the then ten million members of the trade unions, and the urban bastions of ‘municipal socialism’, as she saw them, the (largely) Labour-led local authorities.

On the one hand, the trade unions represented a very real threat to Thatcher’s policies. After all, no Tory could ever forget or forgive the political clout of the unions that had ousted the last Tory government of Edward Heath in 1973-74. Heath had called a general election with the rallying cry: “Who runs the country, the government or the unions?” and he got his answer when mass strikes helped put Labour once more back into power.

At the forefront of that great, industrial, political battle had been the militancy of the National Union of Mineworkers (NUM), inspired very much by the rising new leadership around Arthur Scargill and Mick Magahey.

On the other hand, the Labour-run councils represented to the Tories the very essence of encroaching ‘Soviet-style communist’ strongholds. They were seen as centres of minority-favouring, political correctness gone mad, tax-soaking beasts of bureaucracy as portrayed by the rightwing national press that regularly sought to sniff out, or often invented, rabid stories of corruption and graft.

Major dispute

For the Tory ideologists of the new right, local authorities led by Labour had to be exposed for what they were – ruinous economically and politically inept in the post-boom realities that had to be brought into line with the new orthodoxy of ‘monetarism’.

The vital key to Thatcher’s campaign to roll back the state was the taming of the unions. This meant taking on the most powerful union – the NUM. If the miners could be drawn into a major dispute and roundly defeated then the rest of the trade unions would come to heel and the Thatcherites could then deal with the Labour councils. No war on two fronts for them.

Divide and rule was the name of their game. They had learned some very harsh lessons from Heath’s defeat in the 1970s.
The main lesson had been that their real enemies were not so much the heads of the Labour Party but the millions of organised workers in the heavy battalions of the trade unions. Workers had not only seen off the Heath government but had also brought down the Labour government that had gone on to betray their election promises of 1974. Labour had already begun to impose stringent monetarist policies of the International Monetary Fund (IMF) in 1976, as espoused by the likes of capitalist guru Milton Friedman, to combat the high inflation wrought by, amongst other factors, the quadrupling of oil prices. The crisis of capitalism was to be passed on to the working class. The slashing of services, public sector jobs and wages, the imposition of ‘wage freezes’ by the one-sided ‘Social Contract’ were all rejected outright by workers whose so-called ‘Winter of Discontent’ of 1978-79 brought matters to a head, forcing Labour prime minister Jim Callaghan to go to the polls. Labour voters’ mass abstentions allowed a minority Thatcher government into power.
Thatcher’s first government only had to bide its time in its early years. It gained confidence from Labour’s internecine divisions between left and right, aided by the treacherous breakaway of a group of rightwing MPs forming the Social Democratic Party (SDP). The nationalistic fervour of the ‘Falklands Factor’ of 1982 also contributed to Thatcher’s second election victory of 1983. The Thatcher government was strengthened by the Labour leadership of Neil Kinnock and Roy Hattersley who wanted to ‘reform’ the workers’ party and turn it into a safer, less militant party, an electoral machine similar to that of the American Democratic Party. Thatcher began to isolate and provoke the NUM. The Tories ensured coal reserves were well-stocked to last eighteen months, and then threatened pit closures via the appointment of naturalized American, union-busting millionaire Ian McGregor as chairman of the National Coal Board in 1983.

Drift back

The year long momentous struggle saw the miners battle unaided by the Labour and Trade Union leaders but supported by ordinary workers. They were harassed by a co-ordinated government effort: strong police intervention tactics were backed up by the courts enforcing anti-trade union laws on picketing, secondary picketing, on union funds sequestration and were aided by the full blaze of an anti-working class mass media that highlighted ‘picket-line violence’ while turning a blind eye to police provocation and brutality. Other ‘tactics’ included the cutting off of social security benefits for miners’ families, the forming of an MI5-sponsored ‘breakaway’ union – Union of Democratic Mineworkers – and even harassment by TV licence detector vans!

The miners and their families were deserted by their TUC leaders – ‘lions led by donkeys’ – and were literally starved back into work. By the beginning of 1985, the miners’ drift back to the pits increased. They marched back to the sound of their colliery bands, defeated but not broken.

The timid (mis)leadership at the head of the labour movement, and the defeat of the miners, meant the Tory government was emboldened to turn its spotlight more fully on the Labour councils that had been conducting an ongoing battle against ‘rate-capping’. It had been a battle from which Thatcher’s government had had to beat a hasty tactical retreat in 1984 when a number of councils co-ordinated their campaign against rate-capping, spearheaded by the Militant-led socialist Labour council in Liverpool that won serious concessions from Thatcher, and the very public campaigns of the likes of Greater London Council (GLC) led by the media-friendly Ken Livingstone.

When Margaret Thatcher first became leader of the Opposition in 1975 she had vowed to abolish the rates, the local tax based on property values. She had initially been tasked with this by Edward Heath when she was his environment spokesperson in his shadow cabinet in 1974. Her monetarist instincts forbid her to simply do away with a system where central government would simply pick up the bill so it was a question of how to replace the rates – a question that became academic while the Tories remained in opposition.

Revolt on the backbenches

But the question was to be revived when she became Tory leader. She warned quite clearly: “There is no doubt that the present system of rates is old fashioned and increasingly unfair. During the lifetime of the next Conservative government, we shall replace them with a different system of taxes, a system that relates to what people can afford to pay.”

In 1981, Thatcher’s first Environment Minister, Michael Heseltine, examined a local sales tax but felt it would hit the poor too hard. A local income tax was anathema to the Tories. A poll tax was considered by Heseltine to be too difficult to collect and not a ‘practical proposition’. When Heseltine became Defence Minister, following the 1983 general election, he was replaced as Environment Minister by Patrick Jenkin who insisted on addressing the problem of funding local authorities again.

Jenkin delegated the task to Kenneth Baker, his local government minister, 1984-85:  “We were faced with a major Tory revolt on the backbenches, from the 1922 Committee. I remember a debate in the House of Commons in 1984 in which the junior minister William Waldegrave was savaged by the Tory right of the shires, Geoffrey Rippon, Francis Pym, and we had votes against the government of fifty or sixty Tory MPs and the demand was for change,” said Baker.

At the 1984 Tory conference, Jenkin, Baker, Waldegrave along with the then Scottish Minister, Michael Ancram, were called upon to form the team who would change council financing, to make local councils – in partyspeak – ‘accountable’.

A ‘taskforce’ of well-heeled members of the Tory elite was set up to look at alternatives, at how the next plan of attack on the working class was going to take shape.

Shadowy conspirators

The taskforce included such worthies as Lord Victor Rothschild, the wealthy banker; Alan Walters, Thatcher’s economic advisor who would go on to figure later in the downfall of Nigel Lawson, the Chancellor of the Exchequer in 1989; Lenny Hoffman QC, a friend of Rothschild; and Tom Wilson, an economics professor and ‘Fellow of All Souls’ to lend a little intellectual gravitas in how to take the working class to the cleaners.

Tories historically liked to carp about shadowy conspirators in the labour movement who met in ‘dark, smoke-filled rooms’, the image helped to mystify and demonise leaders of the working class down the ages. It helped portray labour movement leaders as manipulative of ‘gullible, ignorant workers’ who fomented revolt and forgot their rightful forelock-tugging, subservient station in life. But the Tories, and their rich backers, prefer to meet in the lap of luxury. In this case, the taskforce met on February 3, 1985, in the aptly named Capital Hotel in London, twenty of them in all, to kick around ideas about how to tighten the screw on workers and their families, while the half-starved striking miners and their families faced a winter of despair as the drift back to work increased out of desperation. Meanwhile, the taskforce was busily sweating over beef stroganoff, mixed salad, a selection of cheeses, fruit, coffee and brandy in their, no doubt, cigar smoke-filled conference room.

The earth-shattering conclusion they came to was that, presently, local services to people were provided by a tax on property, so they decided, in their collective wisdom, that the services should be paid for by a tax on people!

Presumably, once this nut was cracked, it was time once again to crack open the brandy and pass around the cigars.
There were some misgivings, Tom Wilson: “This government always espoused family values yet the principle of the poll tax posed families as individuals responsible for their own tax bills. The family was now to be reduced to a group of isolated individuals living together.”

There was the ‘Accrington Problem’, people in some areas would pay different poll tax than others across the street. There was the so-called ‘Mrs Khashaggi Problem’, in favour of the poll tax – the proverbial ‘little old lady’ living on her own paying massive rates while down the road a family of four adults shared lower rates of a council house.
It was all a question of presentation, the taskforce agreed.

What probably decided the question for them was the early 1985 re-evaluation of the rates in Scotland which spread panic through the Scottish Conservative Party. Business rates were being slashed which led to an increase on residential rates.
Nigel Lawson (Chancellor, 1983-89): “It was a case of the Scottish tail wagging the English dog.”

Lord Younger (Scottish Secretary, 1979-86): “The Scottish rates re-evaluation lit up the whole issue and brought it to the forefront of the political agenda quickly.”  The Scottish Conservatives were putting on the pressure.

On Sunday, March 31, Jenkin was on his way to Chequers, the prime minister’s country residence, for the presentation. He had to convince Thatcher herself before taking the idea of the poll tax to cabinet. Her dominance of the government would then ensure the new tax would be implemented. Back in the 90s, there were a growing number of contractors that owned limited companies, which contracted themselves out as full-time workers and used this to reduce taxes. To combat this, the government partnered with HMRC to determine when somebody was legitimately employed. And as a result, ir35 umbrella was introduced.

Jenkin, Baker and Waldegrave had rehearsed the presentation before a group of junior ministers and senior civil servants to make sure they got it right, even down to Jenkin’s priming for Waldegrave to end with – “and so, Prime Minister, you will be able to honour your pledge to abolish domestic rates.”  Waldegrave need not have poured on the slick charm, Thatcher was already sold.

Lawson, who wasn’t at the presentation, was not convinced: “It was self-evidently a disastrous course.”  Lawson added on a memorandum: “(A poll tax) was completely unworkable and politically catastrophic.”  Nobody remembers Lawson resigning over the issue or telling people not to pay the poll tax.

A more cautious line

With the hindsight of 1992, Tom Wilson claimed that: “A lot of intellectual effort had been put into it (!) but what came out of it was a farce.”
By September, 1985, Jenkin’s failure to curb the socialist council of Liverpool meant he was replaced by Kenneth Baker. At the 1985 Tory conference, Baker urged a more cautious line of a ten year phasing in of a poll tax, which would overlap with the rates.

Thatcher preferred to introduce it wholesale when the time was right. Baker was only too glad to go along with her wishes – though later, again with the benefit of hindsight, Baker insisted it would have been better to phase it in. Nevertheless, he wasn’t the one to argue with Thatcher, especially as he was so grateful to her promoting him to a cabinet post. And, after all, he believed presentation was everything. For instance, although it was referred to in documents and discussions as the ‘poll tax’, more ‘user-friendly’ names were bandied about – ‘council charge’ sounded too bureaucratic, ‘residents charge’ sounded too personal. They decided on ‘community charge’. Nevertheless, the poll tax name was to stick.

As Tory Party treasurer, Lord McAlpine commented: “The Labour Party was always attacking the poll tax and we were defending the community charge.”  By January 6, 1986, Baker’s ‘Green Paper’ was ready to present to cabinet. Alas for Baker, as fate would have it, this was the cabinet meeting where the ‘Westland Affair’ exploded with Defence Minister Michael Heseltine walking out of government and the ensuing crisis meant that, momentarily, the poll tax got buried in the melee.

By summer, Baker was moved to Education while Nicholas Ridley – notorious architect of the ‘Ridley Report’ that laid down the tactics that helped destroy the miners’ strike – now took Environment. He was, at first, unenthusiastic. But, following the third general election victory of 1987, when half of the Scottish Tories lost their seats, a hundred backbenchers urged caution on Ridley to phase in the poll tax.

‘You SHALL pay the poll tax!’

The hard-nosed Ridley disagreed: “The dual taxes business meant two different sets of bills. I just felt we had to cut this out.”  Though Lawson was still in favour of phasing it in, call after call for its immediate introduction at the Tory conference in October was organised beforehand by Ridley himself.
“Get on with it and save millions of pounds by bringing it in at one stroke,”  said one enthusiast.

“It will appeal to the electorate,” said another.

“Can we have it introduced in one go and not over three or four years?”

Defeat of the miners and the subsequent cowing of the labour movement leadership, and the emboldening third election victory of 1987 was the clincher for the rightwing of the party to go ahead with introducing the poll tax in one go. It was to prove to be Thatcher’s nemesis, and the long beginning of the end for Tory dominance (if not quite of ‘Thatcherism’ itself!). But they didn’t know it. They were on top of the world.

After all, it was just a case of presentation.

NEXT: Part Two – ‘A Paler Shade of Red’