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By Root 3045 0

that former ratepayers (and ratepayer couples) need pay in community charges no more than £3 a week extra over and above their 1989–90 rate bills, provided that their local authority spent in line with the Government’s assumptions. Pensioners and disabled people would be entitled to the same level of help even if they had not previously paid the rates (and of course many of them were entitled to rebates as well). At the same time David Hunt announced that the taxpayer would finance the safety net in England and Wales after the first year and that all gains would therefore come through in full from 1 April 1991. In spite of this, back-bench pressure increased. There was even doubt as to whether we could win the crucial Commons votes in January 1990 to authorize payment of the 1990–91 Revenue Support Grant. We met to discuss whether concessions needed to be made. Even if we had wanted to make concessions, it would not have been easy to do so because there was really no common thread to the rebels’ concerns. In fact, I decided that we should hold our ground, and through the efforts of the whips and with the help of a superb speech from Chris Patten — always an able debater — we won the votes by a good margin. But I was under no illusion that victory in the House of Commons would be sufficient to convince public opinion, which had now turned strongly against the community charge.

THE POLITICAL CRISIS MOUNTS

By now the bad news about likely future levels of the charge was coming through thick and fast. By January 1990 the DoE had yet again raised its estimate of the average community charge to £340. We were heading for double the original estimate. That had been bad enough. Now in February, with local authorities likely to increase their spending by some 15–16 per cent, the latest indications were that it could be £20 or more higher.

Another piece of bad news was that the Retail Price Index Advisory Committee had in its wisdom decided that the community charge should be included in the RPI — treating it like the rates, but unlike other direct taxes. But the massive reliefs to individual charge payers should not be taken into account. This administrative fiction gave another expensive upward twist to the RPI and greatly increased the political damage which we were sustaining.

The political atmosphere was becoming grim. All my instincts told me that we could not continue as we were. On Thursday 22 March we sustained a very bad by-election defeat in Mid-Staffordshire, losing a seat in which we had had a majority of over 19,000. The press was full of outraged criticism of the community charge from Conservative supporters. I was deeply worried. 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. These were the people who were just above the level at which community charge benefit stopped but who were by no means well off and who had scrimped and saved to buy their homes. Our new scheme of transitional relief did not protect them against overspending councils. Something more must be done.

My thoughts were crystallized by the discussion I had with Ken Baker, Tim Bell and Gordon Reece over supper at Chequers on Saturday 24 March. Their message was clear. It was vital to achieve lower levels of community charge. If this were not done the political consequences would be grave. This matched my analysis entirely.

There was widespread support for the principle that everyone should pay something towards the cost of local government, which only the community charge could ensure. When people complained about its fairness they were not usually rehearsing the hackneyed — and spurious — point about the hypothetical duke and dustman paying the same. Unless the duke were very poor or the dustman very wealthy this could not be so, because about half of local authority expenditure was met out of general taxation which did reflect ‘ability to pay’. The problem was the levels at which the charge was now being levied and the fact that it was