ALGERIA / BRITAIN Thatcher's flagship hits the rocks THE FIGURES speak for themselves. A parliamentary by-election in Mid-Staffordshire on March 22 saw a Conservative majority of 14,600 converted into a Labour majority of 9,400 — a swing to Labour of 21%, the biggest in a by-election since 1935, and sufficient to guarantee a Labour majority in Parliament of over 200 seats if repeated at a general election. To underline the point, an opinion poll in the Observerof March 25 reported a Labour lead over the Conservatives across the country of 28%, the highest figure recorded since polling began. Whilst a number of factors account for the current unpopularity of the Thatcher government, one issue in particular has come to the fore as a focus for popular anger at its policies — the introduction of the "Poll Tax" as a new basis for the financing of local government. In recent weeks, over 100,000 people in Britain have participated in public protests as local councils met to set the rates at which the Poll Tax would have to be paid. As anger spilled over into violence, politicians united with the media in denouncing the "Trotskyist agitators" alleged to be inciting the protests. BERNARD GIBBONS
HE MORE thoughtful sectors of the bourgeoisie, however, are more aware of the fragility of Thatcher's "miracle" and the depth of popular resentment at the Poll Tax — as the pro-Conservative Sunday Telegraph put it, "in a society where violence lurks so near the surface....governments ought to take great care to avoid giving provocation on this unprecedented scale".
How is it, British political commentators ask, that such a seasoned demagogue as Thatcher should have misread the popular mood so wildly? Usually, the expla nations revolve around Thatcher's personal psychology, her legendary stubbornness, arrogance and so on. In fact, the strategy behind the Poll Tax is a logical continuation of the one pursued by Thatcher since she came to power in 1979. Something more fundamental has gone wrong for the Tories - the basic structural weaknesses of the British economy are becoming increasingly apparent, and economics is no longer on Thatcherism's side.
Thatcher has characterized the Poll Tax as the "ideological flagship" of her current administration. It crystallizes two of her chief obsessions; firstly, her crusade to defeat Labour in the big urban local authorities, which she sees as the last bastions of Socialism in Britain, and secondly, her need to maintain the support of the skilled working class and lower middle class layers who have been kept in the Tory camp through a consumer boom based on tax cuts, easy credit and a string of populist innovations.
For many years, local government finance in Britain has been based on the payment of local "rates" levied on each houschold. Although far from being equitable, the old system had some progressive content in that the amount paid was dependent on the size and quality of each individual dwelling. The system also allowed considerable autonomy to local authorities to determine their own levels of expenditure, and in particular it allowed Labour controlled authorities to reflect to some extent the needs of those who had elecied them. This system has been increasingly eroded since the Tories came to power, and the Poll Tax is intended to seal this process. Now, every individual over 18 will have to pay the same amount although the exact sum will vary from area to arca) regardless of income or size of dwelling — an unemployed youth will be expected to pay the same as a millionaire.
Whilst clearly the less well off will suffer under such a scheme, concer for such people has never particularly entered into Thatcher's scheme of things. But the plan 21 was that upper working class and lower April 9, 1990 • #182 International Viewpoint
BRITAIN middle class voters, many of whom resented the old system, would benefit from the redistribution of the burden. Conservative controlled councils would set reasonable and sensible rates for the Poll Tax, whilst Labour councils in the big cities, already struggling to provide even the most basic services for those hit hardest by Thatcherism, would be forced cither to slash spending even more brutally or to set impossibly high rates for the Poll Tax. This scenario, combined with a continued onslaught in the slavishly proThatcher media against Labour's "loony left" local THANK YOU F councils (allegedly lavish- I THINK FUL BE AB THE 9% RAISE OH ing money on lesbians and 8 MILLION MAR TO MANAGE ON gays and various troublesome ethnic minorities) would provide the background to another Tory election triumph.
It has all gone horribly wrong for Thatcher. As planned, the poorest will indeed suffer, and the richest will gain - rescarchers at the London School of Economics have shown that the poorest 20% of the population will pay 5% more per year under the new syslem, with the richest 20% being 5% better off. But it is now clear that the middle layers in the more comfortable areas, the Thatcherite bedrock, are also going to suffer. Surveys have shown that the average houschold will be paying 33% more under the current system than the old, and in some areas 50% more - and Thatcher accepts that these figures are accurate. 36 out of 39 county councils, including many loyal Conservative administrations in relatively well-off areas, have set rates for the Poll Tax far higher than government targets. Batches of Conservative councillors have resigned from the party, and some of the most militant and violent confrontations have taken place in the quictest Tory backwaters. For these "middle layers", already under pressure from high interest rates, high poll tax demands mark are a further twist of the financial screw.
Thatcher's miscalculation is a product of the cconomic problems her govemment is facing. For example, the government's target rate for the average Poll Tax levy was calculated on the basis of an inflation rate of 4% - in fact inflation in Britain is running at 7.5%, and expected 1o rise through to the summer. A tightening labour market has given new confidence to workers, and wage selllements are now running at an annual rate of 9.25%, again expected to rise (needless 10 say, in the face of this, monetarist dogma and culogies to the "free market" have gone out the window, and Britain's economic problems are again being attributed to "greedy workers" who are unfairly • using their industrial muscle to make International Viewpoint #182 • April 9, 1990 excessive demands). More fundamentally, it is becoming clear that 11 years of Thatcherism have done little to remedy the real weaknesses of the British economy in the sphere of production - the Thatcherite "miracle" is beginning to look as hollow as those allegedly worked by the late "Genius of the Carpathians"
At the centre of Thatcher's problems is a vast and historically unprecedented balance of payments deficit — the current account deficit was £20.9 billion last year, and for the first time in history earnings OR JONDERFUL, OUR MAJESTY
NOW I WE COULD LE ONLY FIND A BRITISH
FOX.. I from invisible trade (banking, insurance, travel, overscas investment proceeds) fell into deficit in the last three months of
1989.
The government's response has been to repcatedly raise interest rates, again to historically unprecedented levels - but, to its horror, the effect has been to slow down the domestic economy rather than to curb consumer spending. The markets waited for a stern budget on March 20 to deal with the problem - but the Chancellor of the Exchequer, John Major, did not dare to deepen the unpopularity of the government still further through income tax rises. The result was a further slide in sterling, which has fallen by 10% in the past three months.
### Thatcher encouraged frenzied consumerism
The contradiction between Thatcherite populism and the current dire state of the
British economy is then central to the govemment's current unpopularity. The frenzied consumerism which Thatcher encouraged in her heyday has to be restrained. High mortgage rates were supposed to dampen consumer spending, although they wore a bitter pill to swallow for a government which poses as the champion of the homebuyer. For all the unpopularity they have brought the govemment amongst its natural supporters, it is clear that they have not been sufficient; now the Tories are haunted by the specter of an increase in income tax, anathema to a party which rode to power pledging to get government off the backs of the taxpayers. But of course the problem is fundamentally political and not ideological — how can the government both follow the recessionary policies the markets are demanding and regain the support it needs to win the next general election?
The Tories might be more worried still if Neil Kinnock's Labour Party presented a more credible alternative. Rather than channelling the current popular anger into a coherent radical alternative to Thatcherism, Labour's policy might be summarized as "after Thatcher, us". Their massive lead in the opinion polls is a function of Thatcher's unpopularity rather than any TAX AFVOLT. genuine enthusiasm for their extremely vague policies. Labour's economic spokesperson, John Smith, has pledged that Labour will "maintain a responsible fiscal policy with prudent con5 trol over public finances, spending only as resources allow and as the economy can afford". Faced with the poll tax protests, Kinnock's response has been express his full agreement with Thatcher that "demonThe benous Soleo Moso strations organized by the militant left.... are a negation of democracy". Kinnock and the Labour leadership have consistently opposed the demands of the left that the party should support those who are refusing to pay the tax, and Labour have relused to organize a national demonstration in opposition to the tax.
The attitude of the Labour Party leadership stands in sharp contrast to the growing confidence and militancy of the anti-Poll Tax movement. The All Britain Anti-Poll Tax Federation, representing several thousand local groups committed to the non-payment, non-implementation non-paletion of the lay is orgazing
1s OrganIZing national demonstrations in London and Glasgow on March 31 expected to be sevcral hundred thousand strong. Federation activists estimate that as many as 10 million people will refuse to pay the tax. This figure does not seem unreasonable on the basis of the experience in Scotland, where the Poll Tax has alrcady been introduced
- in parts of Glasgow it is reported that one in three residents have not paid and 700,000 Scots are three months or more in arrears. Efforts to collect from or punish non-payers are likely to raise the level of resistance still further. Already the strength of the campaign has forced concessions and humiliating climbdowns from the government on a number of fronts. The myth of Thatcher's invincibility has been visibly dented - the task now is to remain on the offensive and build a mass movement which can sink not just the Poll Tax, but Thatcherism itself, the "ideological flagship" of the capitalist austerity drive of the 1980s. *