A move to exempt homeless rough sleepers from paying the poll tax was opposed by one of Margaret Thatcher’s cabinet ministers on the grounds that it would “encourage them to sleep on the streets”, according to newly released Downing Street files.
Peter Walker, the then Welsh secretary, argued that creating an exemption for those who sleep rough “would put an enormous loophole into the system and would be abused”.
He added: “Moreover, it would act as an incentive to people to sleep rough simply to make sure that they escaped having to pay at least 20% of the charge. While I appreciate that in practice it is highly unlikely that local authorities would be able either to track down people who sleep rough or to get any payment of the charge from them, a specific exemption could be seen as encouraging them to sleep on the street rather than in a hostel.”
He voiced his objection in June 1988 when Nicholas Ridley, then environment secretary, was trying to get the final stages of the poll tax legislation, with its principle that everyone should pay for local government services, through the House of Lords.
Ridley had told Thatcher: “We have always had a presentational difficulty in seeking to make people who sleep rough liable for the personal community charge ... We have had to admit that, whatever the position in theory, it would be very difficult to ensure that these people were registered for and paid the community charge [poll tax].”
Walker reluctantly dropped his objection after Downing Street backed Ridley in not wanting to collect the poll tax from rough sleepers if only because of the “unwelcome publicity” it would attract.
The Downing Street files released on Friday show that earlier in its history Ridley himself voiced strong doubts to Thatcher about the impact of the poll tax and called for a major rethink.
On 29 July 1987 a confidential note on the poll tax file records that Ridley saw Thatcher to express his “growing concern about opposition to the community charge. This would be increased by the decision to have a transition rather than to abolish rates immediately. He showed some inclination to want to rethink quite major aspects of the community charge,” reported a No 10 official.
“The prime minister discouraged this firmly,” it went on. “But she agreed that it would be sensible for Mr Ridley to begin to think about minor changes which backbenchers might propose and which could then be accepted by the government.” Her decision to press on regardless came despite her own Downing Street policy unit telling her earlier that month that it was vital to mount a campaign to sell the policy because it was “receiving virtually no support in parliament, in the press or even from Conservative-controlled councils”.
Thatcher also ignored renewed warnings from her own chancellor, Nigel Lawson, who two years before had warned the poll tax would be “completely unworkable and politically catastrophic”. He objected to the decision to scrap a transitional system of dual running of the rates topped up by the poll tax, saying it “would leave us exposed to unacceptable political risks”. He warned that a couple with an elderly parent living in Cambridge would face a 50% increase – £250 – in their local tax bill and that the “outcry from the losers” would lead to a severe political fallout.
The papers reveal unpublished exemplifications from 1987 showing that there were expected to be 8 million losers from the poll tax even with average bills of £100 a head. In the event when the tax was introduced in 1990 the average bill was closer to £400 a head, triggering not only the Trafalgar Square poll tax riot but also a revolt in the Conservative party that was to oust Thatcher from Downing Street.
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