LONDON — LONDON -- A desperate search is under way for a new way of financing local government after a dramatic voter revolt last week against the unpopular poll, or head, tax.
The tax, introduced by Prime Minister Margaret Thatcher last year, levies a flat per capita payment on all voters -- with a few exemptions -- whatever their financial status.
Technically, the pauper and the millionaire living in the same jurisdiction pay identical amounts, as set by their local council.
The tax last week brought the Conservative Party government ** one of its most humiliating election defeats in 11 years in power. A 19,500 Conservative majority at the 1987 general election was turned into a 4,500 Liberal Democratic victory margin in a by-election in the northern rural constituency of Ribble Valley, previously the Conservatives' 10th safest seat in the country.
The result was universally seen as the voters' verdict on the poll tax, putting the government on notice that unless it abandons the levy it is staring defeat in the face at the next general election, which has to be held within 15 months.
"When the poll tax is finally put to rest in the grave, its epitaph will read 'Here lies the poll tax, killed in Ribble Valley,' " said Michael Carr, the Liberal Democrat who won last Thursday's by-election.
Aware of the tax's unpopularity, Prime Minister John Major ordered its review as soon as he replaced Mrs. Thatcher in November. Last week's vote added new urgency to the search for an alternative.
Michael Heseltine, the minister charged with producing a new format, promised "a more carefully worked alternative than those of many people who are trying for change."
Previously, local government was financed through a property tax, but the system was deemed flawed be cause many householders who were tenants did not contribute anything to the services they used. It was also warped by out-of-date property valuations.
The Conservatives decided that it would be easier to replace the system than reform it. They turned to the poll tax, arguing that universal payment would make local councils more accountable to their residents and therefore more thrifty.
Under it, voters were faced with such anomalies as a lord paying the same head tax as his servant. Families with working children over 18 living at home suddenly faced multiple per-head tax demands that far outstripped the property taxes they had previously paid.
Even the rich, who benefited from the new system, judged it patently unfair.
The government is expected to announce its new approach before the May local elections, which could influence the timing of the next election. Officials say the government has ruled nothing in and nothing out of its review.
The opposition parties also have had to grapple with the problem. Having criticized the government approach, they have had to produce their own alternatives.
The Labor Party has come up with a new type of property tax based on both property value and ability to pay. The Liberal Democrats favor U.S.-style local income tax.