Lord Home, the last but one Old Etonian Prime Minister, once cautioned his party not to "touch the rates".

 

It was wise advice; if only Margaret Thatcher had remembered it when she turned her mind to local government finance in the middle of her second term as Tory Prime Minister.

As recent disclosures under the 30-year-rule made clear, her preferred solution - which inevitably became known as the Poll Tax - was perhaps the most supremely ill-judged piece of post-war domestic policy-making.

Many of her contemporaries, most notably the then Chancellor Nigel Lawson, did their best to warn her, but it was no use. "Something had to be done" about the rates (not exactly a fair system itself) and, with typical single-mindedness, the Iron Lady was determined to see it through as the "flagship" policy of her third (and final) term.

One memo from last week's National Archives disclosures attracted much comment. Written by a young Oliver Letwin, then a member of the Downing Street Policy Unit, it referred to using "the Scots as a trail-blazer" for the Community Charge, and later to "the Scottish experiment", his point being that if the Community Charge worked north of the Border then it would "pave the way for its introduction in England and Wales".

These quotes were widely interpreted as incontrovertible proof that the Poll Tax had, contrary to repeated denials, been "tested" on Scotland, confirmation that the ancient Scottish nation had been treated like a "guinea pig". This, however, exaggerated the importance of one document while, importantly, paying no attention to subsequent events. One memo does not a guinea-pig make.

Indeed, a full reading of the declassified papers tells us little we didn't already know, chiefly that the main impetus for the early introduction of the Poll Tax in Scotland came not from Mr Letwin or Mrs Thatcher but from George Younger, the then Secretary of State for Scotland who, in response to a messy Rates revaluation in 1985, lobbied Downing Street to "trail-blaze" (rather than "test") the embryonic Community Charge in Scotland to prevent losses (as he saw it) at the 1987 General Election.

Taking Mr Letwin's memo in isolation (which one must almost never do with archive material) then it seems clear he envisaged - if rather sketchily - using Scotland as some sort of test bed but, and this is the crucial point, that is not what the Government actually did. Here it is important to distinguish Mr Letwin's informal advice from the eventual legislative decisions taken by his government employers.

So by the time the Poll Tax was introduced to Scotland in April 1989 legislation for its introduction in England and Wales was already far advanced, so its rollout in the rest of Great Britain was not contingent upon its success (or otherwise) north of the Border. Also, no significant changes were made to the English and Welsh plan as a result of the Scottish experience. Separate Scottish legislation and timescales were the norm when it came to local government. Ironically, a Tory government was actually responding to, rather than ignoring, distinctive Scottish circumstances (that is, the 1985 Rates revaluation).

Already I can sense eyeballs rolling in the heads of Scots for whom all of the above is historical pedantry, a weasely attempt to exonerate wicked Tories from dastardly anti-Scottish acts, for sadly there is a constituency even in early 21st-century Scotland that wallows in victimhood. Indeed, it's amazing how quickly post-referendum "confidence" lapses back into historical grievance.

Such a reaction necessarily refuses to take account of historical reality. One website headlined a diatribe about my previous critiques of Poll Tax history (including the guinea pig analysis) with the hyperbolic "Scotland Awaits Your Apology" as if I were some sort of Holocaust-denier. Others layered myth upon myth: the Poll Tax, they claimed, was only abolished when the English rioted, when in fact it was scrapped almost a year after that following Mrs Thatcher's resignation.

There is a wider point highlighted by these 30-year-old documents, chiefly (and as Lord Home implied) that local government finance is a political Pandora's box. Even the current Scottish Government knows this only too well, for it was elected back in 2007 with a manifesto pledge to introduce a Local Income Tax, although with a centrally set rate it wouldn't have been "local" at all.

That quickly proved such a quagmire that ministers went to court to prevent details of putative "local" tax rates becoming known to voters ahead of the 2011 Holyrood elections. Part of the problem, meanwhile, was of the SNP's own making: as soon as it froze Council Tax in 2007/08 it became politically impossible to unfreeze it, and anyone who hinted at doing so was traduced as a "Tory", an innately regressive freeze having been cleverly packaged as "progressive" in spite of all evidence to the contrary.

Labour also got its fingers burned back in 2007 when Jack McConnell floated the idea of creating additional Council Tax bands for more expensive properties. He had a point, for the last Scottish revaluation took place 24 years ago, and even after the housing bubble current "bands" bear no relation to real property values, particularly in Edinburgh. But Lord McConnell committed the cardinal sin of not having worked out the specifics.

To her credit, the present First Minister finally broke the logjam on local taxation in her recent programme for government, promising to establish an independent commission to examine "fairer alternatives" to the current Council Tax system. This way the issue is neutralised (relatively speaking) as a political issue, a cross-party approach ensuring that no single party or party leader ends up taking the rap for whatever the commission recommends.

Northern Ireland, the only part of the UK still to have "Rates" (domestic and non-domestic), adopted a similar approach ahead of its most recent property revaluation exactly 10 years ago. But then the Province, much like Scotland, is no closer to finding a sustainable replacement for "unpopular" (though in reality any tax is "unpopular") and arguably outdated systems of local taxation.

What will the commission come up with? The Greens propose a Land Value Tax (LVT), probably the most coherent proposal currently on the table and something supported by elements within the two major parties. Another option would be introducing a LVT as one of a "basket" of local taxes, an innovation that would bring Scotland much closer to the Continental norm.

But it won't be easy, and any system that creates more losers than there are at present (which seems likely) will be difficult to sell to an electorate repeatedly assured that the provision of good public services doesn't necessarily mean higher taxes. Lord Home's aphorism, in other words, still resonates, although this time there might be a dose of political consensus to sweeten the pill.