Thatcher’s New Poll Tax: The Beginning of Her End? : Britain: A tax, intended to target the Conservative Party’s enemies, has instead alienated constituencies on all sides.

A month short of her 11th anniversary as Britain’s prime minister--a record of unbroken power not seen for more than a century--Margaret Thatcher is on the ropes.

On March 22, her Conservative Party lost a special election in its political heartland. The swing to the opposition Labor Party was the biggest in more than 50 years. Opinion polls last weekend showed the Conservatives running from 19% to 38% behind Labor. Translated into seats at a general election--which does not have to be held until summer, 1992--those figures would give Labor the kind of overwhelming majority in the House of Commons it has had only twice before. And, incidentally, the figures mean Thatcher would lose in her own North London district.

How has she gotten into this mess? Explanations are two-a-penny. People are fed up with her and her bullying. Politicos in Britain call this the “TBW” factor, “that bloody woman”--what people say about her when asked on their doorsteps. Running close is the “SGTF” factor, “she’s gone too far”--a reference to her privatization last year of the publicly owned water and electric industries. The economy is having a rocky year. Inflation is heading for 9%. Interest rates are around 15% and, in a country where more than 60% of families own their own homes and almost all mortgages are at a floating rate, high interest rates have a direct pocketbook effect. But ask most Britons what most explains madam’s unpopularity, and they will say “the poll tax.” And thereby hangs a tale.

At one level, it is a technical tale about local government finance, the quickest way known of emptying dinner parties. Fortunately, it can be briefly told. For many years, Britain financed local government with a mixture of grants from the central government and “the rates.” The rates are property taxes, raised much as they are in this country. Property is periodically valued, and the tax then levied by the local government.

One section of the Conservative Party has always complained about the rates. It said they were a tax on responsible homeowners--i.e., themselves--so money could be spent on feckless tenants of public housing--i.e., the Great Unwashed, those who vote Labor. And indeed, since public-housing tenants did not pay rates, but consumed a disproportionate amount of local government services, the Conservatives had--as they say in Britain--half a point.

Thatcher thought so, at any rate, and long before becoming prime minister she promised that when next they came to power, Conservatives would abolish the rates. Easier said than done. Throughout most of the 1980s, successive working parties looked at the alternatives, only to reject them. A local income tax was ruled out because Thatcher does not like income tax of any kind. A local sales tax was ruled out because of its effect on inflation. Reforming the rates (the sensible option because they are easy to collect, progressive and a relatively painless proxy for a tax on wealth) was rejected because Thatcher had not promised to reform rates--she had promised to abolish them.

So she did, replacing them with what she likes to call the “community charge” but which everyone else calls the poll tax. For it will serve as one: Those who do not register for the tax will not be able to register to vote. The poll tax is levied at a flat rate for all adults, irrespective of income levels or form of housing. Thus the wealthy--say, Prince Charles--will pay no more than those struggling to make ends meet--my widowed aunts in Liverpool, for example--though there are rebates for those in poverty.

Thatcher shrieks that the poll tax is more fair than the rates, since it means everybody pays something for local services, whereas before some paid nothing. But as changing the system has created more losers than winners--the poll tax takes effect today--all she can do is stuff the mouths of the losers with silver and pray that, in a year or two, everybody will have forgotten that ability to pay is a useful principle when designing a new tax.

Yet this technical explanation of what the poll tax is and why Thatcher introduced it tells less than half the story. It fails to explain why she should have taken such a huge risk with a tax almost designed to be politically unpopular. The answer lies in some aspects of British society little understood in America.

Throughout the 1960s, young Britons and Americans played the same music, smoked the same dope, sat-in, loved-in and taught-in in the same ways. So it was easy to think the political fallout from the 1960s must have been similar in the two countries. But it wasn’t. American baby-boomers gave up listening to Jefferson Airplane and started writing scripts for Brandon Tartikoff. However much they may have rebelled in their youth, they rarely challenged the basic American dream to get ahead and be good capitalists. They supported Gary Hart in 1984 and Albert Gore Jr. in 1988, which is really, like, daring.

The same people in Britain behaved differently. They took jobs as teachers and social workers; they remained suspicious of business and kept some countercultural values. One result is that Britain is far more bohemian than America, a much larger proportion of its population does not accept the tenets of bourgeois society. And this culture is not entirely cut off from the mainstream--compare, for example the Guardian, Britain’s leading liberal paper, with the New York Times, which by comparison looks and reads dull, staid and conformist.

When this bohemian bit of Britain got interested in politics the fireworks started. In the 1980s, while the national Labor Party was as mesmerized by Thatcher as a snake by a mongoose, young socialists took over one moribund inner-city Labor Party after another. From 1981 to 1986, London was run by a council that sponsored rock concerts, built bicycle paths, created nuclear-free zones, gave grants to gay and lesbian groups and more. These Labor city governments were for some years the only effective political opposition to Thatcher.

And boy, did she hate them. They stood for a Britain alienated from everything she believes in--hard work, traditional values, a strong defense, a house in the suburbs. In one piece of legislation after another, she attempted to constrain their ability to raise the cash they needed to fund their schemes. The poll tax, her advisers said, was the ultimate weapon. By making clear to all who lived in an area--and not just property owners--how much their local government services cost, she believed she would increase accountability and reduce freedom of action among local councils.

In fact, these goals had been achieved three years ago, when local electorates got tired of the back-biting, posturing and general incompetence among the counterculturals who ran inner-city government. But by then the die was cast; the poll-tax legislation had been introduced.

It may prove to be Thatcher’s undoing, but the story is far more significant than that. It shows, once again, that after 11 years of Thatcherism, Britain remains a country where competing cultural currents run deep. That, in turn, helps explain why Britain has found it so difficult to construct the sense of unified national purpose that would take it out of its post-imperial malaise.