Anti rate capping ticket : An Anti Rate Capping Entertainment

In the 1980s changes were made to the system of government grants paid to local authorities in an attempt to reduce higher spending. Councils that were seen to be overspending would be ‘punished’ with deductions to their grant. As a result councils maintained their spending levels through increasing rates (local property tax).

The 1984 Rates Act gave the Secretary of State for the Environment the power to limit the rates set by local authorities. ‘Rent-capping’ meant it was no longer possible for local authorities to replace lost grant with increased revenue from rates. Of the 18 authorities to be rate-capped in 1985-6, 16 were under Labour control and the move was viewed by some as an attempt to silence Labour opposition to government policies.

Hackney Council joined other boroughs in outright opposition to rate-capping, with the council leader declaring they faced bankruptcy if unable to set a rate.

Shared by Ian Rathbone, local activist involved with the 'Save Hackney' campaign
"And because of the war that was going on between Thatcher and just about everybody else, she tried to restrict the amount of money that they were going to give Hackney Council with what’s called the rate support grant. And then of course the council raises extra money from residents, would have had to put the rates as it was then called (rates are what we now call council tax). So that's why we were always fighting against the cap. You were given the percentage, you can't go above that, well if you do then you become surcharged. And that means that you've set an illegal rate, they take it to court, you can be prosecuted. It's criminal action, you can be made to repay all the money that's been spent as a result of your illegal action. Which can amount hundreds of thousands of pounds for each person, and mean bankruptcy for a councillor. So it's quite a scary thing really.

We also related back to George Lansbury in the 1930s. He was the leader of Poplar Council and they set a rate above that on the basis that they needed to feed the poor. They actually were prosecuted and sent to prison. In fact in 1986 Lambeth Council famously set a rate above the rate, and they were all surcharged. So surcharge means that from the moment that you set the rate illegally, you've broken the law. Any costs after that incurred by the council could be surcharged to you personally as a councillor.

I think the counter to, you know, ‘stand up to Thatcher’ and ‘stand up to stopping the money going to the poor’ was but we need to continue to exist otherwise we wouldn't be doing anything and the government would come in and take over. So there are the two sides of it.

In Hackney in 1986 eventually there was this key meeting. And they voted, I think it was a very narrow margin, can’t remember now, too busy shouting…It was very, very noisy. The whole thing was very, very noisy. And then the ruling Labour group voted by a small margin to set a legal rate, not to go above the cap, the restriction that the government had laid on. So that kind of ended it."

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