Rates Act 1984

Last updated

Rates Act 1984
Act of Parliament
Royal Coat of Arms of the United Kingdom (variant 1, 1952-2022).svg
Long title An Act to enable the Secretary of State to limit the rates made and precepts issued by local authorities; to require local authorities to consult representatives of industrial and commercial ratepayers before reaching decisions on expenditure and the means of financing it; to make provision for requiring additional information to be given to ratepayers; to require notice of the rates payable in respect of a dwelling-house to be given to any occupier not in receipt of a demand note; and to make other amendments relating to rates.
Citation 1984 c. 33
Dates
Royal assent 26 June 1984
Other legislation
Repealed by Statute Law (Repeals) Act 2008
Status: Repealed
Text of statute as originally enacted

The Rates Act 1984 is an Act of Parliament in the United Kingdom, which controls the tax-raising powers of local authorities.

Contents

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. [1]

Provisions

The Rates Act 1984 allowed the government to individually set caps for the increases to rates that each authority could levy. [2] Those who acted ultra vires (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. [3]

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 councillors did not back down and eventually the Act was used to prosecute and fine the leader of Lambeth Council, Ted Knight, and others. He was banned from office for ten years.[ citation needed ]

Legacy

The domestic rates were replaced in 1990 by the Community Charge (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. [4]

Related Research Articles

<span class="mw-page-title-main">Greater London Authority</span> English devolved regional authority

The Greater London Authority (GLA), colloquially known by the metonym City Hall, is the devolved regional governance body of Greater London, England. It consists of two political branches: the executive Mayoralty and the 25-member London Assembly, which serves as a means of checks and balances on the former. Since May 2016, both branches have been under the control of the London Labour Party. The authority was established in 2000, following a local referendum, and derives most of its powers from the Greater London Authority Act 1999 and the Greater London Authority Act 2007.

<span class="mw-page-title-main">London boroughs</span> Administrative subdivisions of Greater London

The London boroughs are the 32 local authority districts that together with the City of London make up the administrative area of Greater London, England; each is governed by a London borough council. The present London boroughs were all created at the same time as Greater London on 1 April 1965 by the London Government Act 1963 and are a type of local government district. Twelve were designated as Inner London boroughs and twenty as Outer London boroughs. The City of London, the historic centre, is a separate ceremonial county and sui generis local government district that functions quite differently from a London borough. However, the two counties together comprise the administrative area of Greater London as well as the London Region, all of which is also governed by the Greater London Authority, under the Mayor of London.

<span class="mw-page-title-main">Greater London Council</span> English local administrative body (1965–1986)

The Greater London Council (GLC) was the top-tier local government administrative body for Greater London from 1965 to 1986. It replaced the earlier London County Council (LCC) which had covered a much smaller area. The GLC was dissolved in 1986 by the Local Government Act 1985 and its powers were devolved to the London boroughs and other entities. A new administrative body, known as the Greater London Authority (GLA), was established in 2000.

<span class="mw-page-title-main">Metropolitan county</span> Type of county-level administrative division of England

Metropolitan counties are a subdivision of England which were originally used for local government. There are six metropolitan counties: Greater Manchester, Merseyside, South Yorkshire, Tyne and Wear, West Midlands and West Yorkshire.

<span class="mw-page-title-main">Council Tax</span> Local taxation system

Council Tax is a local taxation system used in England, Scotland and Wales. It is a tax on domestic property, which was introduced in 1993 by the Local Government Finance Act 1992, replacing the short-lived Community Charge, which in turn replaced the domestic rates. Each property is assigned one of eight bands in England and Scotland, or nine bands in Wales, based on property value, and the tax is set as a fixed amount for each band. The higher the band, the higher the tax. Some property is exempt from the tax, and some people are exempt from the tax, while some get a discount.

<span class="mw-page-title-main">Inner London Education Authority</span> Former education authority in London

The Inner London Education Authority (ILEA) was the local education authority for the City of London and the 12 Inner London boroughs from 1965 until its abolition in 1990. From 1965 to 1986 it was an ad hoc committee of the Greater London Council; on 1 April 1986 it was reconstituted as a directly elected body corporate.

<span class="mw-page-title-main">Poll tax (Great Britain)</span> Controversial system of taxation in the UK from 1989 to 1993

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 provided for a single flat-rate, per-capita tax on every adult, at a rate set by the local authority. The charge was replaced by Council Tax in 1993, two years after its abolition was announced.

<span class="mw-page-title-main">Taxation in the United Kingdom</span> United Kingdom tax codes

In the United Kingdom, taxation may involve payments to at least three different levels of government: central government, devolved governments and local government. Central government revenues come primarily from income tax, National Insurance contributions, value added tax, corporation tax and fuel duty. Local government revenues come primarily from grants from central government funds, business rates in England, Council Tax and increasingly from fees and charges such as those for on-street parking. In the fiscal year 2014–15, total government revenue was forecast to be £648 billion, or 37.7 per cent of GDP, with net taxes and National Insurance contributions standing at £606 billion.

<span class="mw-page-title-main">Greater Manchester County Council</span> Local government administrative body for Greater Manchester from 1974 to 1986

The Greater Manchester County Council (GMCC) was the top-tier local government administrative body for Greater Manchester from 1974 to 1986. A strategic authority, with responsibilities for roads, public transport, planning, emergency services and waste disposal, it was composed of 106 directly elected members drawn from the ten metropolitan boroughs of Greater Manchester. The Greater Manchester County Council shared power with ten lower-tier district councils, each of which directed local matters. It was also known as the Greater Manchester Council (GMC) and the Greater Manchester Metropolitan County Council (GMMCC).

<span class="mw-page-title-main">Business rates in England</span> English tax

Business rates in England, or non-domestic rates, are a tax on the occupation of non-domestic property. Rates are a property tax with ancient roots that was formerly used to fund local services that was formalised with the Vagabonds Act 1572 and superseded by the Poor Relief Act 1601. The Local Government Finance Act 1988 introduced business rates in England and Wales from 1990, repealing its immediate predecessor, the General Rate Act 1967. The act also introduced business rates in Scotland but as an amendment to the existing system, which had evolved separately to that in the rest of Great Britain. Since the establishment in 1997 of a Welsh Assembly able to pass legislation, the English and Welsh systems have been able to diverge. In 2015, business rates for Wales were devolved.

The Lyons Inquiry was an independent inquiry into the form, function and funding of local government in England. Appointed jointly by the Chancellor of the Exchequer and the Deputy Prime Minister in the summer of 2004, Sir Michael Lyons produced several reports over the next 3 years, culminating in a final report on the future of local government published alongside the Chancellor's Budget in March 2007.

<span class="mw-page-title-main">Lambeth London Borough Council</span> Local authority in Greater London, England

Lambeth London Borough Council is the local authority for the London Borough of Lambeth in Greater London, England. It is a London borough council, and one of the 32 in the United Kingdom capital of London. The council meets at Lambeth Town Hall in Brixton. Lambeth is divided into 25 wards: thirteen are represented by 3 councillors and twelve are represented by 2. The council was first elected in 1964.

<span class="mw-page-title-main">Rate-capping rebellion</span> 1985 English local council political campaign

The rate-capping rebellion was a campaign within English local councils in 1985 which aimed to force the Conservative government of Margaret Thatcher to withdraw powers to restrict the spending of councils. The affected councils were almost all run by left-wing Labour Party leaderships. The campaign's tactic was that councils whose budgets were restricted would refuse to set any budget at all for the financial year 1985–86, requiring the government to intervene directly in providing local services, or to concede. However, all fifteen councils which initially refused to set a rate eventually did so, and the campaign failed to change government policy. Powers to restrict council budgets have remained in place ever since.

Taxation in Norway is levied by the central government, the county municipality and the municipality. In 2012 the total tax revenue was 42.2% of the gross domestic product (GDP). Many direct and indirect taxes exist. The most important taxes – in terms of revenue – are VAT, income tax in the petroleum sector, employers' social security contributions and tax on "ordinary income" for persons. Most direct taxes are collected by the Norwegian Tax Administration and most indirect taxes are collected by the Norwegian Customs and Excise Authorities.

<span class="mw-page-title-main">Localism Act 2011</span> Legislation concerning English local government

The Localism Act 2011 is an Act of Parliament that changes the powers of local government in England. The aim of the act is to facilitate the devolution of decision-making powers from central government control to individuals and communities. The measures affected by the Act include an increase in the number of elected mayors, referendums and the "Local authority’s general power of competence" which states "A local authority has power to do anything that individuals generally may do".

<span class="mw-page-title-main">Merton London Borough Council</span> Local authority in England

Merton London Borough Council is the local authority for the London Borough of Merton in Greater London, England. It is one of the 32 councils that form Greater London.

<span class="mw-page-title-main">Wandsworth London Borough Council</span> Local authority for the London Borough of Wandsworth in Greater London, England

Wandsworth London Borough Council is the local authority for the London Borough of Wandsworth in Greater London, England. It is a London borough council, one of 32 in the United Kingdom capital of London. Wandsworth is divided into 20 wards, each electing three councillors. After the May 2022 election, 35 of these councillors were Labour and 22 were Conservatives, with 1 independent. The Conservatives had an overall majority on the council since 1978, until Labour won control in the 2022 election.

<span class="mw-page-title-main">Croydon London Borough Council</span> Municipal body governing London Borough

Croydon London Borough Council is the local authority for the London Borough of Croydon in Greater London, England. It is a London borough council, one of 32 in the United Kingdom capital of London. Croydon is divided into 28 wards, electing 70 councillors.

<span class="mw-page-title-main">Fares Fair</span> Policy of the Greater London Council

Fares Fair was a public policy advocated by the Labour Party administration of the Greater London Council (GLC), then led by Ken Livingstone. The policy of low public transport fares was implemented in 1981, but was later ruled to be illegal in the courts and rescinded the following year.

Rates are a tax on property in the United Kingdom used to fund local government. Business rates are collected throughout the United Kingdom. Domestic rates are collected in Northern Ireland and were collected in England and Wales before 1990 and in Scotland before 1989.

References

  1. Elcock, H., Local Government: Policy and Management in Local Authorities, (1994)
  2. Loughlin, M., Legality and Locality: The Role of Law in Central-Local Government Relations, (1996)
  3. Rates Act 1984, Ch. 33, s. 18
  4. Atkinson, H. & Wilks-Heeg, S., Local Government from Thatcher to Blair: The Politics of Creative Autonomy, (2000)