Leading Article: Still paying for the poll tax

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The Independent Online
How different this week might have been. Instead of facing the latest round of income tax increases, introduced yesterday, we might be enjoying a tax cut. But we have been robbed. The reason: we are still paying the price of the poll tax.

According to a recent study, "the basic rate of income tax could have been about 4p in the pound lower in 1994-95 than it actually was (or VAT some 4 percentage points lower) if the community charge had never been introduced and abandoned". Set out in Failure in British Government: The Politics of the Poll Tax by David Butler et al (OUP), these figures could easily be dismissed as propaganda, were it not for a review by Nigel Lawson in this week's Spectator magazine. The figures are "almost certainly an underestimate", concludes Lord Lawson, who was Chancellor of the Exchequer when the poll tax was being designed.

In other words, the long-term legacy of the poll tax is a large shift from raising council finance at a local level to it being subsidised by the income tax payer. That said, it may be tempting to forgive and forget. After all, the tax's chief architect, Margaret Thatcher, is out of office. Yet, if you look at today's Cabinet, you might be annoyed to discover that many of those who gave us the poll tax are thriving.

Chief culprit is William Waldegrave, now the Agriculture Minister. As an environment minister, he worked out the nuts and bolts of the poll tax. Other environment ministers involved in implementation included Michael Howard (now Home Secretary) and John Gummer, now Secretary of State for the Environment. As Secretary of State for Scotland, Malcolm Rifkind (now Defence Secretary) had the dubious honour of introducing the tax north of the border in 1989, a year before it was imposed in England and Wales.

These politicians told us that the poll tax would be fairer, would make local government more accountable and so would keep costs down for income tax payers. They were wrong. Lord Lawson now acknowledges publicly that the poll tax was a disaster. Chris Patten, who as Environment Secretary had to sell the policy politically, now admits that it was "fundamentally flawed". Yet surviving ministers seem to have absolved themselves. Why have we not heard them declare that they deserve horsewhipping for costing income tax payers so much money? None resigned in protest when the poll tax was introduced. None has resigned subsequently.

In a mature society, politicians admit their mistakes and learn from them. Otherwise, they may be doomed to repeat them.