general taxation. By the mid-1990s the NHS was treating more patients, more efficiently than in the 1980s, and the creaking old service was enabled to stagger on for another decade.
The final verdict on Social Thatcherism is a mixed one. Nicholas Timmins, the ‘biographer’ of the welfare state, concludes that despite her instincts Mrs Thatcher actually strengthened the welfare state – at least the NHS, education and those parts of the social services used by the middle class, making them more efficient in order to keep her key constituency happy. She might have wished that ‘her’ voters did not look to the state for their health and education – and mortgage tax relief – but the fact was that they did: opinion surveys consistently showed that the public remained as firmly wedded to the basic principles of the welfare state as ever.18 As a result services were trimmed at the edges by charging for things like dentals checks and eye tests which had previously been free, and greatly increasing the cost of prescriptions, but the central pillars remained untouched.The main exceptions were those services principally relied on by the poor: public sector housing and the basic state pension, whose value was allowed to wither away, and other forms of income support. Poverty visibly increased as a substantial ‘underclass’ was cut off from the rising prosperity of the majority. But in the big picture the scale of social provision was undiminished over the Thatcher years: it still took around 25 per cent of GDP at the end as it had at the beginning. ‘The welfare state remained remarkably un-rolled back thirteen years after Margaret Thatcher took power… The stark change… was the growth in economic inequality.’19
The poll tax
Meanwhile, the poll tax, launched as the ‘flagship’ of the Government’s programme for the third term, was facing an increasingly difficult passage through Parliament and was building into a major political disaster. Back in 1985 Mrs Thatcher had been slow to be convinced that it was practicable. Once sold on it, however, she set her face against the swelling chorus of opposition and determined to stake her own position and the electoral prospects of the Tory party on forcing it through. She elevated support of it into a test of loyalty to herself, with ultimately fatal results. In particular she insisted – almost alone – on calling it the ‘community charge’. Already within weeks of the election the first whispers of revolt were stirring within the party. Sir George Young emerged as a leading dissenter on grounds of equity, pointing out that his personal liability would fall from ?2,000 to around ?300 a year while others, much poorer, would pay more. In the Commons Mrs Thatcher agreed that some people would gain under the new system, but insisted that the losers would be those unlucky or foolish enough to live in high-spending boroughs. It was up to the electors in those authorities to vote for lower spending. Moreover, she claimed, the principle that every local resident should pay the same community charge, regardless of income, was
At this stage, however, she still envisaged phasing the charge in over several years. But then for the second time on this issue the Government let itself be bounced by the unrepresentative enthusiasm of the party faithful. Ridley and Mrs Thatcher were impressed by speaker after speaker at the Blackpool conference in October 1987 calling for the hated rates to be scrapped without delay. ‘We shall have to look at this again, Nick,’ she whispered to him on the platform.21 A few weeks later Ridley announced that ‘dual running’ would be abandoned and the community charge introduced all at once in April 1990. In her memoirs Lady Thatcher confessed that this ‘may have been a mistake’.22
In fact, the poll tax was not really a flat-rate charge: it did allow means-testing at the bottom of the scale. The Government was never given credit for the fact that around seven million poorer people – later increased to nine million, or one in four of the total number of charge payers – were eligible for rebates of up to 80 per cent of their liability; while those on Income Support had even the remaining 20 per cent taken into account in calculating their benefit. So the very poorest were not greatly affected, though households on low wages certainly were. But these substantial rebates compromised the initial simplicity of the idea, while increasing the burden on those who were liable for the full whack, who still numbered twenty-five million compared with just nineteen million who paid rates. ‘What you vote for, you pay for,’ Mrs Thatcher told her restless backbenchers the following year.23 ‘The community charge is a way of asking people to pay for what they vote for, and when they do they will vote against Labour authorities.’24 The problem was how they were to pay the bill in the meantime.
The Bill finally received the Royal Assent in July 1988. The average charge was then expected to be about ?200 per head. A year later that estimate had risen to ?278; by January 1990 it was ?340, with many councils anticipating even higher levels. In her memoirs Lady Thatcher blamed ‘the perversity, incompetence and often straightforward malice of many local councils’ for seizing the chance to push up spending and let the Government take the blame. But this was precisely what Lawson and Heseltine had predicted they would do. Lawson argues that they should have capped spending first; and in retrospect she agreed.25
Instead, opposition continued to build right across the political spectrum. In April 1989 the charge came into force in Scotland, a year ahead of England and Wales, amid widespread refusal to pay, orchestrated by the Scottish National Party and supported by some left-wing Labour MPs. The Labour leadership, while opposing the tax, was careful to avoid the illegality of being seen to advocate non-payment. But by September between 15 and 20 per cent of those registered had not paid; while a significant number simply did not register. This Scottish resistance fuelled alarm among Tory MPs in England, prompting a series of ever more desperate efforts to cushion the impact by offering transitional relief over the first few years – in effect a return to dual running.
In July 1989, realising that Ridley was a public-relations liability in this area, Mrs Thatcher replaced him with the much more voter-friendly Chris Patten, who warned her that the flagship was threatening to sink the whole fleet but nevertheless took on the job of trying to save a policy he did not believe in. At first she was ‘quite adamant that she was not going to have the Treasury dish out all this money’ to ease the transition.26 But in October Patten did squeeze substantial additional funding out of Lawson to head off the latest revolt. In theory, Patten now claimed, no one should be more than ?3 a week worse off. But that calculation was based on an average bill of ?278, which was already out of date. When Labour members pointed out that even Mrs Thatcher’s own Barnet council was preparing to set a charge well above the Government’s guideline, she was reduced to retorting that the charge in neighbouring Labour boroughs was even higher.27
In February 1990 Tory councillors in Oxfordshire and Yorkshire resigned from the party rather than be responsible for introducing the tax. In March there were disturbances in Manchester, Bristol, Birmingham, Hackney, Lambeth, Swindon and even true-blue Maidenhead.The Government’s popularity, which had held up well for two years, went into free fall. The climax came with a huge demonstration in Trafalgar Square which turned into the worst riot seen in the capital for decades. Cars were burned, shops looted and some 450 people injured – mainly police.
Mrs Thatcher was horrified by such ‘wickedness’. By focusing on the violent minority, however, she missed the point: though the far left as usual hijacked a peaceful demonstration to their own pseudo-revolutionary ends, the poll-tax disturbances up and down the country were predominantly a middle-class revolt. ‘I was deeply worried’, she wrote. ‘What hurt me was that the very people who had always looked to me for protection from exploitation by the socialist state were those who were suffering most.’28 Alan Clark nailed the essential flaw in his diary for 25 March:
As usual the burden will fall on the thrifty, the prudent, the responsible, those of ‘fixed address’ who patiently support society and the follies of the chattering class.29
In other words the charge missed those it was intended to hit and punished those it was designed to protect: in Chris Patten’s words, it was ‘targeted like an Exocet missile’ on the middle class in marginal constituencies.30 It was not surprising that Tory MPs began to fear for their seats.
The community charge was finally introduced in England and Wales on 1 April 1990 at an average of ?363 per head. Some councils were soon reporting levels of non-payment as high as 50 per cent. Mrs Thatcher set up a
