Rough notes by MT with later annotations in another hand. [?] indicates illegible word. [? words] indicates uncertain words. {words} indicates words not in MT's handwriting. p1

Intro. Thanks to Cranley OnslowCranley and committee To David WaddingtonChief Whip Welcome Conservative MEP's Thank you for asking me to speak to you on St. Margaret's Day {(R4 News—did not quite feel like that)} p2

Lewisham £55

Hammersmith & Fulham

North west

I. {Realise N Ridley just addressed you}

Community Charge—Paying for local govt services

1. No ideal system

Choose between alternatives Rating Revaluation—over 15 yr. period.

Inbuilt subsidy from low spending to high spending area.

Scotland—7 years {—support down to 13%;}

Opp. Capital value rating

Local income tax

Community Charge [end p1]

2. When fully in operation

WHAT YOU VOTE FOR, YOU PAY FOR.

{Every extra £1 → Comm Charge] p3

3 provisos

1. Taxpayer & business pay the lions share 25%; England 18%; in Wales 14%; in Scotland Above standard spending—every £ goes on to Community charge.

2. Rebate system—9 million Paid for wholly by taxpayer £1.5 bn. On top of Exchequer grant.

3. Transition through Safety Net. Some areas pay lot more some less p4

Some of the losses would have been intolerable—and we have quite a no. of marginal seats at stake. {Nicholas RidleyNick has modified safety net.}

Barnet—Lewisham

Fulham

and you know about North West

nearly half in first year Losers [? bear] up to £25

Fair and reasonable [end p2]

Figures you saw yesterday not final

Still go to do new assessment

{—undoubtedly some adaptations then} p5

Future years for the main safety net.

Have NOT tied our hands—learn from first years experience.

1991-92—critical year

3. a) Extra Exchequer money

Scotland 10%;–12%;.

Last year RSG England—generous grant—high spending

b) Last Budget N.I. contribution will be reduced for most people p6

Comes through in October

For most people

£3 per week

Over £150 in full year. p7

10 years

II. Policies for the long term

now can see them in perspective.

Wasn't easy to come this far—policies and legislation were [end p3] contested every bit as much as now.

Inflation down—very tough

—squeeze out restrictive practices unemployment rose

—top [? tax]—60%;

{Had to stick to them—otherwise would not be here now.} p8

{Look around now. I. booming—excellent base for the next Parliament.

When inflation is coming down, our problems will be coming right.}

Sale of council houses

T.U. legislation

Resisting strikes—steel.

Denationalisation—B. Telecom. Gas. Shipbuilding. Rover/Leyland.

Abolish GLC. ILEA Metropolitan Counties.

Northern Ireland Hunger Strikes.

Pensions Earnings/—Inflation. SERPS.

Housing Benefit—Capital £8,000 p9

Dull decline

Enterprising—full of vitality

Role of Govt. Framework for private enterprise in which to operate Capital Democracy [end p4]

Unemployment 6.4%; (9.3 EEC)

Investment

Inward investment

Profits—Health Service

DOCK LABOUR SCHEME

Inflation—Fight never won.

Interest Rates

When coming down again—& [?] for those on mortgage—standing will improve very quickly p10

III. SUMMITS

Three highly successful summits.

We were in the thick of each NATO

Xpose Labour's defence policy.—set the framework for next two years. confidence

Madrid—getting it right

{We belong to Europe Our future with Europe—but co-operate voluntarily}—advancing by co-operation achieve far better results

Economic Summits—Env.

Sound Policies p11

IV. Next Year—{90%; through}

{if we get these through the NHS will be so good, no-one will ever go private again.} [end p5]

[?] [? drugs]

ENVIRONMENT

scientific evid. & our natural instinct to conserve requires [?]

& takes [?]

Resources to do so.

—Nat Health Service

Broadcasting

Legal Reform

Control of Pollution

Warnock

Food Bill

Going steadily forward. p12

Tribute to the Cabinet {+ supporting Ministers} and their leadership.

If they take the blame {then take credit for 95%; that gone right.}

To the support of the 22 Committee

Future success—depends on us standing together always constructive always relevant to the future.

We all struggled to get here most of us want to stay here after a holiday—{(I too am taking a holiday)}

—sure we shall enjoy the coming session.

Thatcher rallies her MPs

The Prime Minister attempted to stiffen her MPs' nerves last night amid continuing turmoil within the Conservative Party over the impact of the poll tax.

Mrs Margaret Thatcher told Tory MPs during an end of term pep talk that the community charge was a fairer system than any of the alternatives on offer.

She ruled out extra Exchequer money this year to provide safety net arrangements for those facing sharp increases in local government taxes, saying it was “not the answer” .

She said an extra 10 per cent for Scotland had not resulted in councils spending less. Some Tory MPs felt she had hinted at releasing the purse strings in future, saying the Government's hands were not tied for future years and that she was determined to get things right in 1991 and 1992 when an election may be held.

MPs took that as a commitment to look at how the system was working and make adjustments in future years particularly as Mr Nicholas Ridley, the Secretary of State for the Environment, had appeared to hint at some more money becoming available in an earlier backbench meeting.

Officials said later, however, that the Prime Minister was not talking about extra money even in later years, merely about how fast the safety net arrangements were phased out. In her traditional end of term talk, Mrs Thatcher, who was cheered by her MPs on what was St Margaret's Day, told them that when the National Health Service changes went through next session “the NHS will be so good that nobody will ever want to go private again” .

She said that 90 per cent of the 1987 election manifesto had been put through already and that the Government had always acted for the long term, putting through “in the teeth of the wind” changes on which it had later been proved right.

The Tory MPs mostly welcomed Mrs Thatcher's address. One called it “not so much a pep talk, more an ‘In Command’ performance” .

She told the MPs to take a good holiday and come back invigorated. She added that she would be taking a fortnight's holiday abroad. Normally Mrs Thatcher's friends are hard-put to get her to take more than a few days.

Mrs Thatcher said that when inflation came down the worst of the Government's problems would be over and she set out to stifle fears about her approach to the Common Market by insisting “our future is in Europe where we co-operate voluntarily for the right policies” .

She could not resist adding, however, that if the British Government appeared sometimes to be out on its own “it's just that we're taking the lead” .

The vital section of Mrs Thatcher's address, however, was that on the community charge. Mr Cranley Onslow, chairman of the 1922 Committee had expressed concern on introducing the Prime Minister that the problems of the community charge were being compounded by the safety net arrangements.

In defence of the poll tax, Mrs Thatcher agreed that people did not like paying for high spenders in other areas but said it would be “intolerable” for losers to have to pay all the extra in one go.

With alarm running deep among MPs and ministers over the tax, yesterday morning's Cabinet had resolved on a new effort to sell the benefits of the community charge.

Mrs Thatcher began that process last night by telling her MPs that there was no perfect system but all the alternatives were worse. If rates had continued there would have had to be a rating revaluation after 15 years, and they had seen how unpopular that had proved in Scotland.

The Prime Minister emphasized that nine million people were eligible for rebates at a cost of £1.5 billion to the taxpayer. The embattled Mr Ridley was the only minister she mentioned by name when she praised him for listening to worries over the poll tax.

But there was a deep conviction among his colleagues last night that Mr Ridley will fall victim to the unpopularity of the tax, being moved from his post in the wake of a disastrous performance in the Commons on Wednesday.

The poll tax figured large at yesterday's Cabinet, but the discussions centred on how to improve its presentation rather than on how it might be changed to win greater backing from the electorate.

Earlier, Mr Ridley was called in for a half-hour meeting with Mrs Thatcher and Downing Street officials as she prepared to tackle the issue of the poll tax at Question Time and in her address last night to Conservative MPs.

Downing Street emphasized that the minister's future was not discussed.

Even before Wednesday, Conservative MPs had been demanding that Mr Ridley be moved to make way for a minister who would make a better fist of selling the Government's “green” policies.

Yesterday, however, Mrs Thatcher, who had surprisingly been absent during his performance on Wednesday, strongly defended both the poll tax and Mr Ridley.

Challenged in the Commons by Mr Neil Kinnock to say how she would reward Mr Ridley for his performance, she accused the Labour leader of resorting to personal criticism because he had “not the intellect nor the guts” to ask a real question about the community charge, a system that would show up high-spending local authorities for what they were.