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UK Local Government Reform
Until the late 1980s, local government in the United Kingdom was financed from three sources. First, households paid domestic rates that are a property tax assessed on hypothetical house prices. Second, local firms paid business rates on their property. The Third, the largest source was from central government
The Thatcher government believed this system resulted in overspending by local governments. Many poor households did not pay rates but still had a vote (право голоса) and voted for high-spending programs. Firms paid rates but had no vote at all. Only about 20% of local government revenue came from households paying rates. Most firms were against raising property assessment, the basis of the property tax, as market prices were rising
The reform of local government in 1990 made three changes. First, education in state schools was moved from local to central government. Second, instead of local business rates a national business rate was imposed. Business property re
assessment corresponding to market prices led to great increases in the taxed property. Whereas before the reform each local government collected all this revenue and distributed it to local governments in proportion to the local population. Money from the rich south, where property prices were high, moved to the poorer north. Third, domestic rates gave way to poll tax, that is, a tax per head with some relief (налоговая льгота) for the poorest households
IX. Ответьте на следующие вопросы к тексту
1. What were the three sources of financing British local governments before 1990
2. What did this system result in
3. Why was there a protest against raising assessment
4. Was all taxed property re-assessed during the reform
5. How did financial position of different regions of the UK change?