The confluence of ideas and interests in the process of rent destruction: the case of UK tax policy 1979-1997

A case study of UK tax policy from 1979 to 1997 is used to examine the role of ideas and interests in the destruction of political rents. Rent destruction has been typically understood as occurring when the battle for distributional advantage that normally characterises democratic politics has been temporarily superseded by policies informed by ideology pursued in the public interest. The benefits that resulted from the destruction of political rents by the Conservative governments of Thatcher and Major could have been distributed broadly across all taxpayers, but instead were targeted at specific groups of taxpayers. It is argued that this is evidence of the continued salience of distributional demands, even when rents are being destroyed. It suggests that political reforms that destroy rents require the support of a political coalition and the mobilisation of that coalition may require the promise of direct pecuniary benefits from the new arrangements.