Today is the twentieth anniversary of a piece of legislation the Conservatives would rather forget about: the Local Government Finance Act 1988.
The Act introduced the ill-fated community charge (more commonly known as the poll tax) - a fixed rate local government tax payable by every adult in the UK regardless of income. Whilst exceptions were made for students and the unemployed, the charge was seen as shifting the tax burden from the rich to the poor and led to widespread civil disorder, including a riot in Trafalgar Square.
Following Margaret Thatcher’s downfall, John Major’s government abolished the charge and introduced the council tax, still in effect today and calculated on the basis of a property’s value.
Today, the three main parties have differing policies on how to reform council tax. The Conservatives, mindful of what the poll tax did for Thatcher, have pledged to democratise council tax by forcing councils who want to increase the tax over a certain, as yet unspecified, limit to put their proposals to a local referendum. The Liberal Democrats will replace the council tax with a local income tax based on people’s ability to pay rather than the value of their property. And the Labour Government? It “has no plans to change the system”.
Hat-tip for the anniversary: The Aberavon & Neath Liberal Democrats blog.