Rates Act 1984
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The Rates Act 1984 is an
Act of Parliament Acts of Parliament, sometimes referred to as primary legislation, are texts of law passed by the Legislature, legislative body of a jurisdiction (often a parliament or council). In most countries with a parliamentary system of government, acts of ...
in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
, which controls the tax-raising powers of local authorities.


Background

The Thatcher government had been at odds with several high spending Labour controlled councils. The Local Government Finance and Planning Act 1980 and the Local Government Finance Act 1982 allowed central government to decide spending limits for individual authorities. It could remove general grants, which accounted for approximately 60% of the councils’ income, if they continued to overspend. Several councils continued with their programmes of services and had their general grant cut under the earlier legislation. For example, by 1983, the Greater London Council (GLC) had lost all its central funding. However, the GLC and other councils sought to recoup the loss by increasing the amount they levied in domestic and business rates; a tax paid by companies and homeowners.


Provisions

The Rates Act 1984 allowed the government to individually set caps for the increases to rates that each authority could levy. Those who acted ''
ultra vires ('beyond the powers') is a Latin phrase used in law to describe an act which requires legal authority but is done without it. Its opposite, an act done under proper authority, is ('within the powers'). Acts that are may equivalently be termed ...
'' (or "beyond the powers") set out in the Act could be prosecuted, banned from office for up to ten years and fined. The power to control rates came into force for the year beginning 1 April 1985.


Use of the Act

The Act was successfully used to force 31 councils (30 were Labour controlled), who had initially resisted, to comply with government taxation and spending limits. Of those, only Lambeth and
Liverpool Liverpool is a city and metropolitan borough in Merseyside, England. With a population of in 2019, it is the 10th largest English district by population and its metropolitan area is the fifth largest in the United Kingdom, with a populat ...
councillors did not back down and eventually the Act was used to prosecute and fine the leader of Lambeth Council,
Ted Knight Ted Knight (born Tadeusz Wladyslaw Konopka; December 7, 1923August 26, 1986) was an American actor well known for playing the comedic roles of Ted Baxter in ''The Mary Tyler Moore Show'', Henry Rush in ''Too Close for Comfort'', and Judge Elihu ...
, and others. He was banned from office for ten years.


Legacy

The domestic rates were replaced in 1990 by the
Community Charge The Community Charge, commonly known as the poll tax, was a system of taxation introduced by Margaret Thatcher's government in replacement of domestic rates in Scotland from 1989, prior to its introduction in England and Wales from 1990. It pr ...
(dubbed poll tax), which was paid by more people and intended to reveal inefficient councils, who would be forced to levy a higher charge in order to fund their overspending. Business rates are still levied, but at a level set by central government since 1990.Atkinson, H. & Wilks-Heeg, S., ''Local Government from Thatcher to Blair: The Politics of Creative Autonomy'', (2000)


References

{{UK legislation United Kingdom Acts of Parliament 1984