George Osborne: being buried by his own poll tax?

Tory proposals to cut tax credits, benefits to help the poorly paid survive, are “a mistake on a par with the poll tax,” according to Gordon Brown.

Brown, Labour Prime Minister until he was defeated in the 2010 General Election, tends to limit his public interventions. So it’s a measure of how important he feels the attack on tax credits is, that he’s spoken up now. And it’s telling that he compares this Tory policy to the poll tax: it was the measure that Thatcher brought in towards the end of her tenure of office, and which ultimately broke her. Unpopular in the country, it wrought consternation among her own members of parliament who saw it could cost them their seats, so they brought her down.

Gordon Brown:
elder statesman denouncing Osborne's onslaught on the poor

There are times when, as Brown suggests, it seems the tax credit cuts may do the same for George Osborne. He’s Chancellor of the Exchequer now, but has aspirations to succeed David Cameron as Prime Minister. An adverse vote by the House of Lords, which usually refrains from reversing decisions of the Commons on financial matters, forced Osborne back to the drawing board on his cuts. But now even Conservatives are questioning whether they’re acceptable, even if introduced more gradually and reduced in scope.

The Parliamentary Select Committee on Work and Pensions, despite its Tory majority, has called on Osborne to consider postponing the cuts for at least a year to consider other options, if he can’t mitigate the effects of the cuts adequately.

And a Tory MP, Stephen McPartland, boycotted a visit by a Treasury Minister and fellow Tory to his constituency this week, because the Minister refused to discuss the cuts. McPartland had calculated that a family on £20,000 a year, well below the median income for the country but well above the lowest, is likely to lose £2000 a year under the proposals. The government maintains that it’s committed to supporting strivers rather than skivers, but this would be a striving family that would suffer a major blow from Osborne’s policies.

When opposition begins to build within the Conservative Party itself, it seems that as well as a rod for backs of the poor, the Chancellor may well be building one for his own. The next election is still years away, and the Tories may weather this storm and suffer no lasting damage from it. But at least they are, for now, being put to the rack for policies which are inflicting real suffering and which they clearly hadn’t thought through.

That’s another parallel with the poll tax. It was a flat rate tax to support local government. Because it was the same for all, it disproportionately hurt the poor, as the tax credit cuts will. And Thatcher didn’t fully think it through: she had reached the point of believing so firmly in her political instincts that she insisted on pressing ahead with the measure, against the advice of most of her entourage. Until she paid the price.

We’ll see whether Osborne is able to show a little more flexibility. Or will pay the same price.

That will depend on whether he presses on with the tax credit changes. Ironically, most of us, including no doubt Gordon Brown, would be delighted to see the payments falling away to zero. Since they are earnings-related, they would wither away as people earned more. Brown would not doubt be keen to see wages rise in that way. Meanwhile, the Tories claim they want to see us becoming a high-wage, low-benefit economy. Indeed, that’s become a slightly monotonous refrain of theirs these days.

Well, raise the wages and the benefits will, automatically and inevitably, fall.

What’s interesting is that Osborne wants to cut the benefits by direct government action. In other words, he doesn’t himself believe in the “high wage” part of his mantra – if wages were rising as he claims to wish, he wouldn’t need to reduce the benefits himself. They would fall of their own accord.

All of which rather suggests he doesn’t believe his own words. In turn, that suggests that no one else should either. And, what’s more, if his proposals turn into his version of the poll tax, and come back to bury him – well, it could hardly happen to a more deserving fellow.

Maggie, the poll tax, and the danger of firmness

A benefit of the thirty-year rule for disclosure of British government papers is that it can provide a salutary reminder of just how unsavoury certain people were, at a time – three decades on – when there’s a tendency to canonise them.

For a while now, and never more than since her funeral, there has been a growing tendency to sing the praises of Maggie Thatcher. A strong woman, we’re told, a conviction politician, firm in her beliefs, determined to see them through.

That all sounds like praise indeed. So we sometimes have to remind ourselves of the irregular verb: I am firm, you are obstinate, he is pig-headed. What looks like firmness when you feel it’s in a good cause, is simply dogmatism bordering on fanaticism in a bad one.

Firm? Resolut? Or just inflexible?

The Guardian has done us a service by publishing details of the advice Thatcher received from Oliver Letwin, now a Minister but then a 29-year old special adviser, concerning the proposed move to funding local government based on a “residence charge”, later renamed the “community charge” and ultimately known to practically everyone as the “poll tax”.

This was pretty much an unmitigated disaster. Projections in 1985 showed that 44% of the population would be made worse off. The then Chancellor, Nigel Lawson – the minister responsible for Financial matters – declared the tax would mean that “a pensioner couple in inner London could find themselves paying 22% of their net income in poll tax, whereas a better off couple in the suburbs pay only 1%.” He described the scheme as “completely unworkable and politically catastrophic.”

Letwin maintained that it was the way to go, backed by Lord Victor Rothschild, now revealed to be the man who first had the idea. Letwin even supported the approach it has long been suspected Thatcher adopted, of using the Scots as guinea pigs and only introducing the poll tax in England and Wales after running it for a year north the border.

Despite the opposition of many of her most senior ministers, Thatcher made this an issue on which to prove her “firmness”. The poll tax was imposed on the rest of Britain after Scotland, amid increasing resentment and indeed resistance, culminating in widespread rioting in 1990. Her dogmatic attachment to a bad idea had lasted five years and done huge damage – not least, to herself. It was in 1990 that Tory Party grandees decided that they’d had enough of a good thing, or that Thatcher was no longer the good thing she had been, and dumped her.

She could never forgive them. Like all people who have her brand of “firmness’, she knew she could do no wrong. The poll tax hadn’t been her calamitous error, her utter failure of political sensitivity towards the real concerns of voters, it had been a policy that others hadn’t had the courage to see through, preferring instead to bring her down in an act that could only be qualified as treason.

That’s the kind of history we need to recall each time anyone speaks with nostalgia of the Thatcher period. Remember that her departure was the end of an error as well as the end of the era.

But we should also remember that the man who advised her down this destructive route was Oliver Letwin. Thatcher’s gone, but he’s still in government. The Guardian quotes Lord Rothschild expressing some reservations: “…I am nervous lest [the poll tax] is accidentally or deliberately misinterpreted, for example: ‘Tories hit the poor again’, ‘No compassion for the have-nots’.”

How ironic. Those are precisely the charges anyone with empathy for the poor makes of the government in which Letwin, architect of the poll tax, serves today.

Which demonstrates that this kind of story not only provides useful insight on the reputation Thatcher really deserves, it also reveals how balefully her legacy still affects us today.