Chapter 10 – The Battle Against Rate-Capping

A short interregnum followed the July 1984 settlement between Patrick Jenkin and Liverpool City Council. However, the government was soon preparing its next round of measures against local councils. “Rate-capping” was imposed on a number of councils, most of them Labour. Ostensibly to limit rate rises, the effect of setting a limit on rate rises (which if exceeded would result in councils losing government grant under a penalty system) in the context of cuts in the central government grant, was that the spending of councils was being ruthlessly slashed. Rate-capping was to force a whole number of councils into the “front-line” of opposition to the Tories.

What were the lessons of Liverpool? Did it serve as a platform for other councils who would now find themselves in the same position? Would it be possible to forge an alliance between councils and those trade unions also singled out for attack by the Tory government? Would other councils take the Liverpool road and compel the government to beat a retreat?

Any criticism of Liverpool seemed to evaporate as other councils attempted to use the city’s experience as a justification for their resistance to the government. Even the ultra-lefts who had condemned the agreement in July now switched tack. “Sold Down the Mersey!” Socialist Worker had declared but now they argued: “The other side of the Labour left’s local government upturn is Liverpool. It is a very different story from the GLC… it involved a considerable degree of trade union mobilization as a central part of its strategy. Liverpool has achieved what most people consider to be a notable victory.” (Socialist Worker Review November 1984).

Even the National Executive Committee of the Labour Party was carried along by the growing conviction that the government could be defeated. In August a meeting between the Executive’s Local Government Committee and representatives of local authorities on the government rate-capping hit-list took place. The Labour leadership proposed “a long-term strategy” which involved a series of so-called “bush wars” stretching over a period of three years. Its purpose was to avoid a battle in 1984-5. But the Local Government Committee decisively rejected this proposal, accepting a motion moved by Steve Morgan (Labour Party Young Socialist” representative on the Executive) that a series of national demonstrations be organized in the period up to March 1985. It also suggested the calling of a one-day national local authority workers’ strike on “Democracy Day” which was set for March 7, 1985. Anticipating his future role, David Blunkett opposed the idea of a one-day strike. He argued that this would play into the hands of the Tories!

Such was the pressure from below that many councils were compelled to pose the question of open “illegal defiance” of the government’s proposals. This was reflected at the Labour Party Conference at the end of September, with 32 resolutions and 14 amendments on local government, the biggest number on any one subject. Thirteen resolutions expressed total support for Liverpool City Council. A resolution moved by Derek Hatton, supporting the stand of Liverpool City Council and calling for defiance of the Tory government, was carried despite the opposition of the National Executive Committee. Neil Kinnock, in his sniping at Liverpool and other “hard-left” councils, was later to repeatedly pass over this decision of the Labour Party Conference.

The savage cuts demanded by the Tory measures were compelling even formerly “moderate” councils to take up a militant posture. In Leicester a meeting of the District Labour Party was attended by 200 people at which leaders of the council declared their intention to fight government cuts that could have meant 500 job losses. Tony Byrne, Finance Chairman of Liverpool City Council was given an enthusiastic reception by the meeting. Even Tory councils, such as the London Borough of Hillingdon which loyally prostrated itself before the government, found that its services were to be slashed to the bone because of penalties of £8 million imposed by its own government. Left-wing councils like Hackney and Southwark joined with Sheffield, the GLC, the Inner London Education Authority and more than 20 other councils in opposing the government’s measures. These councils had the choice of acting either as rate and rent collectors and hatchet men of the government, or of following the example of Liverpool.

There could not have been a greater contrast, however, between the approach of Liverpool and that of the other councils which had joined in an uneasy alliance against the government. A number had already come into head-on collision with their own workforce because of the previous attempts to implement cuts. Thus, a bitter strike of white-collar workers had developed in David Blunkett’s Sheffield. The council had decided to tear up an agreement on new technology which had been in operation for two and a half years. A “left-wing” councilor declared that NALGO members were “overpaid, underworked and should think themselves lucky to have a job”. Thirteen NALGO members were suspended after refusing to implement a new agreement which had not been agreed by their union. The dispute was bitter, with a 24-hour strike of all Sheffield NALGO members on October 24. If such a development had taken place in Liverpool, it would have received enormous publicity on a local and a national scale. In another example in Sheffield, when striking workers in a building firm called Gleesons asked the council to take the firm off their official tender list, the council – with the open support of David Blunkett – refused. As explained in Chapter 8, such a development would have been impossible in Liverpool with its policies of contract compliance and support for workers in struggle.

Despite the difficulties a united front, at some cost to the principled position of Liverpool (as explained further below), was forged in late 1984 between Liverpool and other authorities which had been rate-capped. Undoubtedly, a key element in the stand that David Blunkett, Ken Livingstone, Lambeth’s Ted Knight, etc., were taking, was the colossal pressure that had developed from below, largely as a result of the stand that Liverpool had taken earlier. An organization which brought the shop stewards together in London, the London Bridge Committee, now called for a one-day strike on November 17.

In the past, local government had been, to some extent, a refuge for workers from the demands of “private industry”. This was particularly the case during the post-war boom. But it had now been brought home to the workers in this field that, given the threat that the government had made, unless they put up a determined struggle many of them would be forced onto the dole. This led to an increasing militancy within the unions and the beginning of the transformation of the shop stewards’ organizations. The older, less energetic, more right-wing layer were being elbowed aside by young workers who were prepared to fight. The process was most marked in Liverpool, but it was mirrored in many other council workforces throughout the country.

A Deficit Budget or “No Rate”?

A debate opened up among the leaders of the rate-capped councils as to which tactic for fixing the annual rate, due to be set in March 1985, could best mobilize the undoubted opposition which existed to the government’s policies. Liverpool’s method of setting a rate that left a deficit in the budget, presenting a clear demand on the government to give more resources to the council to make up the difference, had shown in practice that it was an excellent means of mobilizing the mass of the working class for battle. The “trendy left” typified by Ken Livingstone, David Blunkett and Margaret Hodge, Leader of Islington council, counterpoised to this a so-called “no-rate” policy – a strategy which called on rate-capped authorities to refuse to set budgets until the government made concessions. As subsequent events demonstrated, this was an attempt to avoid (or, at best, postpone) giving battle to the Tory government in a clear and unambiguous fashion. An argument in favor of the “no-rate” policy was that it would bring all authorities fighting the Tories into confrontation with the government at the same time. But, as Militant supporters pointed out, some councils such as Camden and Islington who had received no rate support grant, would run out of money before others. The position of each council was different, making it virtually impossible to harmonize the precise date when all councils were to face bankruptcy. Moreover, the “no-rate” policy was a negative one, leaving the initiative in the government’s hands.

There was a further fundamental difference between Liverpool’s proposal and that of the other councils. Liverpool completely opposed the idea of off-setting government grant cuts by massively increasing rates. But the advocates of the “no-rate” policy were in favor of precisely such steps. Despite many misgivings and the frankly stated opinion of the Marxists that many of the “trendy lefts” would back away from a confrontation when the chips were down, Liverpool councilors went along with the “no-rate” policy. This was done in the interests of a common stand by the 25 councils against the government. In the 1983-4 battle Liverpool, despite having no choice, had been accused by Blunkett, Livingstone and others, of “jumping the gun”. To have stood out now on the issue of the “deficit budget” would have given them an excuse for these worthies to abandon their own stand against the government.

Confused as the tactic undoubtedly was, it evoked tremendous support and spurred local authority workers into action. Thus in November 1984 100,000 London workers came out on strike in boroughs threatened by rate-capping and the abolition of the Greater London Council. 30,000 marched in the capital. The example of Liverpool was evoked more than once that day. Greenwich council leader John Austin-Walker declared: “The time for fudging is over. We should learn the lesson from Liverpool – we can win!” Ken Livingstone, referring to the £6 billion owed by the rate-capped boroughs to the banks, roused the meeting with his statement, “I am afraid we will have to say to them, ‘sorry but you’ll have to wait until the struggle is over’.” Dennis Skinner declared: “the lesson has to be learned, stand by your class”. Unfortunately, Austin-Walker and Livingstone were not to match their fine words with deeds.

Once more, the unions and the working class rallied enthusiastically to the side of the Liverpool council in the looming battle with the government. A mass meeting of 2500 trade unionists assembled in the Philharmonic Hall on January 11, 1985 to hear Liverpool’s Labour leaders outline the stark alternatives. The council faced an invidious choice of 6000 job losses or a 220 percent rate increase, unless a struggle was mounted to force the government to give concessions. This would involve a 1.5 percent cut in education, spending on school meals being cut by 29 percent, housing services cut by 17 percent and employment cut by a minimum of seven percent. David Blunkett declared in the Post: “No local authority will be acting independently, and none will make individual agreements.”

The intention of the rate-capped authorities was to synchronize their budget meetings for March 7 and 8 which coincided with the TUC’s proposed “Democracy Day” demonstrations. The Echo gloomily declared on January 17: “It now seems we are in for another year in which Liverpool will be in the forefront of a clash with the government.” Nor was the opposition to rate-capping restricted just to Labour authorities. Bradford, a hung council but with the Tories as the largest party, had been given the target budget of £174 million. The city estimated this was £4 million short of what it required and went to court in order to get back the money “stolen from it” by its “own” government.

The rate-capped councils, unified into one body, decided to approach the government for negotiations in the middle of January 1985. David Blunkett declared:

Our authorities and the trade unions are totally united behind the stand taken of non-compliance… today we made it clear that, whatever the government says, we are not going to be divided. No authority will try and get itself off the hook by accepting deals from the government individually.

But the government had taken stock of the “trendy left” who were leading the struggle. This was an entirely different beast to that which they had confronted on Merseyside. The Times (18 January) declared:

This time is for resolution. A start should be made at once by a government announcement that it will not pay rate support grant to councils which by the end of March have not made a valid rate. That threat by striking the Labour Party where it hurts – in the pockets of the municipal unions – will at once distinguish the Town Hall postures from the genuine revolutionaries.

The attitude of the government towards Liverpool had always been different. One Whitehall mandarin confided to Tony Mulhearn that “London was pure theater, Liverpool is serious.”

The potential for a unified struggle against the government had never been greater. Splits had opened up with Tory MPs voting against the government’s regulations to curb council spending on housing in February 1985. However the timidity of the “official” leaders of the struggle was indicated by the visit of Hodge and Blunkett to the Bank of England. They attempted to “allay concern in the city about loans to local authorities on the government’s hit list”. Even while ostensibly leading an all-out struggle against the government they hinted to The Times that: “The visit to the city was intended to counter the image of fiscal responsibility raised by Mr. Ted Knight, Leader of Lambeth.” Patrick Jenkin was quite happy to meet such “irreconcilables”, making no concessions but playing them along, confident in the knowledge that they would run for cover when faced with “illegality”.

“Let Them Stew”

In Liverpool, the whole tone and mood of the government and its local satraps was entirely different. To begin with, Jenkin even refused to negotiate with a delegation which included Derek Hatton. Nevertheless, the government was extremely sensitive to the social situation in Liverpool. Thus The Times reported: “The background is the threat of civil disturbance in the city, which was torn by riots in 1981. Special Branch and Home Office reports continually monitor events in Toxteth and specifically, the activity of extremist politicians in fomenting discontent.” The “extremist politicians” were those such as Derek Hatton, Tony Mulhearn as well as non-“Militants” who had been democratically voted into office by the population of Liverpool.

Sensing the impending battle, the opposition in Liverpool launched increasingly hysterical attacks on the council. The Tories, a pathetic and dwindling force in Liverpool, attempted to launch a petition against “massive rate rises”. They of course failed to mention, as did the local press, that Liverpool was pledged not to increase rates to compensate for cute. Liberal MP David Alton, from the safety of Parliament, described the methods of the “Militant Labour leaders” in the city as the “tactics of the jackboot”. This was the prelude to the vicious campaign of personal slander which Alton was to launch and which was eagerly seized upon by the Echo and the Post. Backed by all the local media, the counter-campaign of the Liberals moved into overdrive. Trevor Jones demanded “an inquiry into the running of Liverpool City Council”.

On the same day that Jones launched this attack, Jenkin sent a sharp rebuff to the city council. He declared, “I can see no basis for a meeting with you on the terms you propose… you appear determined on a rerun of the disruptive and damaging campaign you mounted last year”. Jenkin was further quoted in the Post (28 January): “We let them stew in their own juice. We are prepared to sit it out.” Three days later, Jenkin conceded the necessity of a meeting which involved Derek Hatton. By hints and “lobby briefings”, Jenkin indicated: “Ministers believe nearly all rebel councils will cave in when the crunch comes. But they admit that a handful of hard-line Labour leaders – probably in Liverpool, Manchester and a couple of London boroughs – could take their authorities to the brink.”

In the meantime, the workers in Liverpool prepared once more for a stoppage, on March 7. When Neil Kinnock met a delegation at the House of Commons he advised them to make a gesture of defiance on that day and then “accept reality”. Tribune, the journal of the soft left, reported: “Labour local government leaders and trade unionists emerged from meeting Neil Kinnock on Monday cautiously optimistic that the party leadership will back their campaign against rate-capping” (25 January). Yet, a few lines later, the dame journal commented: “There was a clash between Mr. Kinnock and Lambeth’s Ted Knight and Liverpool’s Deputy Leader Derek Hatton, when Mr. Kinnock warned that it would be impossible to turn back Tory allegations of illegality if councilors call for defiance of the law for its own sake. There will be no pledge of indemnity for surcharged councilors.”

Defeat in Vauxhall Ward

Desperate to seek a point of support within the labor movement the slightest opposition, no matter how tiny, was magnified in the capitalist press. The Post and Echo were supplemented by Maxwell’s Daily Mirror which became the main tabloid to attack Liverpool in the two years which followed. On December 3rd,  it screamed about “The saving of Liverpool”, highlighting the opposition which had developed in just one ward, Vauxhall, led by renegade councilor Paul Orr. The Daily Mail in its advocacy of “co-ops” proclaimed: “Tenants rout left in fight for their own homes.” The Echo went further – a giant Militant logo led into a headline which said, “How they got the boot”.

Perhaps this indicated the defeat of Militant in the Liverpool labor movement? If one read the article by Peter Phelps, who was soon to join the Daily Mail, it certainly seemed that way: “Now is the time for all good men – and women – to come to the aid of the party. That is the heart of the message coming like a clarion call out of Vauxhall in Liverpool’s dockland, where traditional socialists are spearheading a fight-back against Militant Tendency’s iron grip on the city Labour Party” (Echo 21 January). One of Orr’s lieutenants, reported to Phelps: “If anyone disagrees, there is the kind of intimidatory behavior which happened in the beer cellars of Germany during the 1930s.” The same individual who made this statement physically attacked Liverpool city councilors two years later when acting as a very ineffective praetorian guard for Larry Whitty outside a Labour group meeting. Yet this deluge of support for Militant’s opponents was provoked by their victory in just one ward out of the 33 in the city. At just one particular meeting the left, including supporters of Militant, were temporarily defeated. But when proposals from Vauxhall ward for the expulsion of Militant were put to the Riverside constituency party, it was defeated by 45 votes to five! Tony Hood, Chair of the constituency, characterized the “moderates” as “an unrepresentative clique… there is no way we are going to expel people because of alleged membership of the Militant Tendency or because they distribute certain newspapers.”

Occasionally would appear in the Echo which would reflect the real views of the rank and file of the party:

Firstly he [Peter Phelps] described this group of opponents of the Militant Tendency as “good men and women and traditional socialists”. This may well be correct. However, I would contend that members and supporters of Militant are as well.

It was also mentioned that last month the Vauxhall ward tried to have certain Militant supporters expelled for “bringing the party into disrepute”. As a non-Militant delegate to the Riverside constituency that rejected that proposal, I object to the claims that the vote was rigged… Vauxhall’s carping now is based purely on the fact that democracy prevailed and their silly divisive proposals were hugely rejected by the party… in three years’ active membership of the Labour Party, I have yet to see any of their alleged intimidation.

When the right-wing dominated National Executive Committee of the Labour Party was to conduct its infamous inquiry into the Liverpool District Labour Party (DLP) and the activities of Militant supporters on Merseyside, it was the baseless allegations of Vauxhall ward and not the genuine voice of the rank and file that they listened to. The Echo a few days later boasted: “Militant loses out in bid for key post.” Militant supporter Phil Rowe had been defeated when he stood for the Chair of West Derby Labour Party, but this was not an uncommon occurrence in that constituency up to that stage.

Meanwhile, plans were made for mobilizing the workforce for the battle to come. Five hundred local authority stewards representing the 30,000 strong workforce were called to a special meeting to launch the campaign. Leaders of the council addressed the meeting with many stewards supporting them from the floor. At the outset of the meeting one prominent Communist Party member argued for “trade-union independence”, saying that the shop stewards should not discuss the campaign until every trade union had discussed it separately. Ian Lowes replied on behalf of the majority of the workforce: “If we went into battle this year with two separate campaigns, one by the council and one by the local authority unions, we would be doomed to failure. If we don’t stand together we will have to face up to the fact that 6000 redundancies will occur.” Out of 500 stewards, only two voted against supporting the council’s campaign, including Communist Party member Jack Kaye.

The Communist Party’s opposition was matched by that of Neil Kinnock at a national level. Opening the Labour Party Local Government Conference in Birmingham early in 1985, he once more appealed for councils to remain “within the law”. Derek Hatton responded: “What we did not hear was an absolutely unequivocal commitment on the part of the parliamentary leadership to say ‘Yes, we support those groups fight for no loss of jobs and no cuts in services’.” Even David Blunkett, forced at this stage to take up a “left” position declared that he expected the leader’s support for the council’s line of defiance, “right or wring”.

As was to be expected, the government and the capitalist press took great heart from Kinnock’s statement. Jenkin turned down the pleas of the 25 Labour council leaders who met him in early February. Moreover, the Post, which had consistently argued that a more conciliatory negotiating posture would get better results than the “confrontational approach” of the city council supported Jenkin to the hilt: “Quite rightly, this year he is firm, resolute and yesterday’s delegation was told its proposals were absurd.”

The Asda Affair and Other Smears

Fearing the impending struggle, the Echo and the Post launched a smear campaign, unequaled in the recent history of the city. This was particularly aimed against Derek Hatton. Every insubstantial smear and dirty innuendo of the Liberals and Tories was blown up into huge feature articles. One of the biggest smears was on the issue of whether or not to grant planning permission for the superstore Asda to build a complex in the Speke enterprise zone. Leading Labour councilors like Derek Hatton and a majority of the District Labour Party leaned towards granting Asda’s application because of the jobs which would be provided. Shopworkers’ union chief Bill Snell, well-known right winger, used this issue to attack the left-dominated DLP. The Echo (6 February) declared in a deliberately slanted headline: “I’m in the clear, says Hatton.” The implication was that Derek Hatton stood to receive some “financial gain” from granting the application, but had cleverly covered his tracks. David Alton, in a typical example of his cowardly approach, used parliamentary privilege to make the most vicious character assassination on Derek Hatton. Alton complained about Labour’s “jobs for the boys” policy. While the Tory MP for Wirral South, Barry Porter, in the same debate (in an aside) declared: “Some of them are crooks.” Alton would not take up the challenge of Merseyside Labour MPs to repeat his allegations in Liverpool.

A similar broadside was launched against councilor Jimmy Hackett implying that he had used his personal position to get his ex-wife a council house. The complete rejection of this charge by Tony Byrne received only minimal coverage. The same criteria applied to the attacks on the Asda affair by the District Labour Party who condemned

the campaign being conducted against the council and the party and particularly the McCarthyite campaign of character assassination against Derek Hatton, instigated by Alton and other Liberals and Tories, aided and abetted by the Liverpool Daily Post and Echo and the national press… the real objectives of which are to discredit the party and undermine support in the forthcoming campaign to defend jobs and services from the attacks of the Tories.

The Liberals demanded a “police investigation” into implied “corruption”. Inquiries that were conducted found no evidence to sustain the smear campaign and the same was true of inquiries into the misuse of council expenses by Labour councilors. Nevertheless all this would serve to undermine and weaken, as the capitalists calculated, the resolve of Liverpool workers to take on the Tory government. Ironically, two years later the Asda project was approved by Patrick Jenkin himself as a means of bringing jobs to the city! (The real facts of the Asda affair were set out fully in Militant 15 February 1985 and 17 January 1986).

Such was the indignation in Labour’s ranks, however, that a special delegation was organized to see the editors of the Echo about their conduct in relation to the council. Tony Mulhearn declared after this meeting:

The power of the press is an extra obstacle to overcome, but I believe our campaign will succeed. Workers are conscious of what is taking place. The press campaign has hardened their resolve. It is in the wider population that the job of concentrating these press lies has to be done… The local press has always been anti-Labour, castigating the so-called extreme leadership of the labor Party in the city. But in the last three months there has been a far more concerted and escalating attack on Labour.

Seizing on what he undoubtedly considered was the disarray that existed in Labour’s ranks over the Asda affair, Jenkin was threatening special legal measures against the council. At a press conference in the city, he gave a two-week deadline after which he threatened to take control of the council’s capital spending. He declared:

Such a direction would oblige the city council to seek my consent for new contracts or work undertaken by direct labor above a given value and to the making of any capital payments above the legal ceiling. I very much regret having to carry out this step but, given the facts we know, I would be failing in my duty if I didn’t act and I would be open to challenge in the courts by any ratepayer.

Jenkin was clearly threatening to cripple the house building program. There was an angry reaction from Labour councilors, with Tony Byrne saying: “He is trying to stop us spending the resources we have every right to spend. As far as we are concerned, the right thing is dealing with people’s housing conditions which should have disappeared 100 years ago.”

The ruling class undoubtedly felt as though they had Liverpool in a vice between Jenkin on the one side, and the local Liberals and Tories, together with their mouthpieces, the Echo and the Post, on the other. However, the press campaign was proving, to some extent, counter-productive. Even businessmen such as Alec Langsham BA, Director of Britannia Hotels Ltd, write to the Echo (12 February) complaining of the effects of the campaign:

depicting caring and hard working city leaders like Derek Hatton as irresponsible crooked playboys, is not only incorrect but it causes permanent irreversible damage to Merseydside’s image… it is far more important that the media sensationalized the good things which are happening to Merseyside than carry out a character assassination of an industrious political leader whose virtues should perhaps be extolled.

Having successfully answered the Liberal smears in relation to Asda, Labour was compelled a few days later to answer the Echo‘s charge of an “Overtime Bonanza”. This journal even attempted to make political capital out of the use of council cars by councilors on council business. The fact that Labour had abolished the Rolls Royces and all the trappings of the Mayor etc was conveniently forgotten by the capitalist press. With the miners’ strike coming to an end, the government displayed a much greater resolve than in the previous year to confront the local authorities. As the issues became more sharply posed and a class polarization began to take place, all those who had earlier supported the council in a lukewarm fashion one by one began to peel away. The Church leaders began to separate themselves from the council’s stance. The Anglican Bishop of Liverpool, David Sheppard proposed to confront government by organizing “a civic mass against abolition” of the Merseyside County Council and in support of Liverpool’s claims. But in the age old spirit of the Church, render unto Caesar what is Caesar’s, Derek Warlock, the Catholic Archbishop, “last night appealed to the city’s Labour leaders not to defy the law and to hold emergency budget talks with the government Ministers.”

Preparing for Battle

Labour concentrated its energies between July 1984 and March 1985 on a series of mass meetings to explain the choice facing Liverpool. At the same time, changes took place within the Joint Shop Stewards Committee (JSSC) to bring it more into line with the demands of the council workforce in the looming battle with the government. Extensive participation of stewards took place at the JSSC, although the representatives did not always reflect the balance of forces within the workforce. NALGO, with its 5000 members, hade more representatives on the JSSC than the GMBATU with its 9000 members. A new system was introduced weighting representation according to union membership, which was obviously more democratic. Ian Lowes, a well-known Militant supporter, was elected Chair of the JSSC, but Peter Cresswell of NALGO, a committed opponent of Militant, was re-elected unopposed as secretary of the committee.

Incredibly the Morning Star reported (18 February 1985): “Militant splits council shop stewards’ body.” Yet as Peter Lennard, Education GMBATU representative, said “Some people are only happy with democracy when it’s them doing the ‘democking’.” Shamefully, the same individual two years later was to display precisely the same tendencies when challenged in his own section of the GMBATU. He was to move into the camp of those he had criticized in February 1985 when the Communist Party and its supporters were instrumental in splitting the JSSC. Their policy was one of “rule or ruin”; either they were to control the joint body or it was to be shattered. The need for a common front with the government was secondary to their purpose of maintaining what they considered to be their “traditional” position amongst the unions and the workforce of Liverpool.

Their splitting tactics did not, however, prevent the mobilization of the workers in Liverpool, or nationally, in the period up to March 7. What was at stake was not the “prestige” of a few trade-union officials, but all the past gains in terms of jobs, services and conditions. Nationally, at least 75,000 jobs would be lost. House building programs and services would be decimated and the old, sick and disabled would be severely hit if the Tories’ attacks were allowed to go ahead unchallenged.

The consciousness of local government workers in the course of the battles up to February-March 1985 was quite remarkable. Their determination was in sharp contrast to the prevarication of the largely middle-class Labour council leaders. This was the case even in those boroughs which were not faces with immediate cuts, and where the local council leadership was able to argue that they were going to have a “growth budget” for the following year. The best of the leading stewards understood that it was better to have a combined national struggle immediately and to fight together rather than to go down separately in the following years. Moreover, the battles in local government in 1985 were seen to be a prelude to the ferocious struggles that would undoubtedly take place over “privatization”.

The movement among local government workers outside Liverpool was a harbinger of the coming transformation of the unions and the Labour Party. In Southward an outline of what will take place in the future in all of the London Labour Parties, and many other parties presently dominated by the middle-class trendy left, was evident. The unions moved into the Labour Party and began to transform the wards and constituency Labour Parties in a way which Marxists had always anticipated would happen. This process of renewal is a beginning of the movement of the working class, taking the labor movement back to its roots.

In Liverpool on February 23 an historic conference of local authority workers took place. Shop stewards from rate-capped and threatened authorities met in Liverpool to plan coordinated action and to organize a national conference of local authority trade unions. The conference was the initiative of the London Bridge stewards’ organization and subsequent events came, for the first time amongst local authority workers, the formation of a national shop stewards’ organization. This development was undoubtedly one of the factors which increased the hostility of national trade-union officials towards the struggle of Liverpool and the struggles of many other local authorities. The initiative for battle was being taken out of the hands of officials by shop stewards who were closer to the workers. Had the rate-capped councils remained firm, as had Liverpool, then this body would have been the vehicle for calling supportive national industrial action.

As the March 7 budget day approached, the war of nerves between Liverpool City Council and the government continued. Junior Environment Minister William Waldegrave declared that Liverpool was “famous for municipal irresponsibility… a city delighting in the prospect of conflict.” Jenkin was using every opportunity to paint a lurid and dismal picture of Liverpool’s prospects in the event of a failure to set a rate! He said that is would be “the poor and the dick” who would suffer; not of course adding that the responsibility for any suffering would lie at the door of himself and his government.

A Deal With French Banks

Liverpool council were to have a further surprise in store for the Secretary of State. On February 22, Finance Committee Chair, Tony Byrne announced that Liverpool City Council had, earlier that month, finalized a deal which would evade Jenkin’s attempt to control capital spending and allow the house building program to continue. The city had arranged a deal with a banking syndicate headed by Banque Paribas, one of the largest French banks which had been nationalized by the French Socialist government of Mitterand. Under Tory directives, Liverpool had sold 7000 council houses and was receiving monthly mortgage payments from them on a long-term mortgage basis. The city’s interest in those mortgages was sold to the lump sum of £30 million immediately. The Echo commented: “It is a nice irony that the Conservative government’s encouragement of council house sales created this pool of mortgages which the council has realized to raise instant cash” (22 February).

Gnashing his teeth, and after much hesitation, Jenkin announces at the end of March that the deal was legal. Other council eagerly sought to go through the breach which Liverpool had created by attempting to fix up deals of a similar character. But in July Jenkin stepped in with a new law that prevented any similar deals from taking place. The Liberals, who had seen Labour once more evade the noose which had been tightened around its neck, furiously denounced both Labour and the banks: “We did not run and put the city in hock to the bandits of Lombard Street who you now embrace”, complained Trevor Jones. The deal effectively allowed Liverpool to continue with its house building program and made some contribution to narrowing Liverpool’s budget deficit. But the basic problems still remained and would only be overcome by compelling the government to give concessions to Liverpool and the other rate-capped authorities.

The District Labour Party, at its annual conference, met to approve the strategy and tactics for impending battle. Tony Mulhearn declared after the meeting:

They [the delegates] recognize that this year we are faced with the position of either making 6000 workers redundant or increasing rates by 220 percent. Both those options were unanimously rejected. The Party recognized they have a big battle to get extra resources from the government to make ends meet, but we have decided we are not going to increase rates to compensate for Tory cuts. If, in the fullness of time we do increase rates, it will be on the basis of inflation and extra spending.

Other authorities and local government leaders appeared to be in a similarly determined mood. Ken Livingstone declared on March 3 that the London Labour Party Annual Conference’s decision to refuse to operate the government’s rate-capping proposals ranked second only to the miners’ decision to go on strike. He confidently predicted to the Greater London Labour Party members “that the struggle would involve not only Labour councilors and the unions, but the whole communities”.

At a mass meeting in the Philharmonic Hall, David Blunkett spoke as a guest speaker of the Liverpool Labour Party. He said: “Unity is the strength that will see us through… We will lift and sustain each other. We must motivate, educate and organize.” According to the Echo (15 March), “he paid tribute to the battle fought alone for the last 12 months by Liverpool City Council and said that this year other Run-run authorities were joining in that war, saying enough is enough.” Unfortunately, Blunkett was subsequently to eat his words. Liverpool remained true to Blunkett’s declaration, only to be rewarded later on by his support for the expulsion from the Labour Party of the leaders of the struggle.

The ruling class had already taken the full measure of Livingstone, Blunkett etc. On the eve of the crucial budget meeting, Jenkin declared: “Labour’s budget revolt is crumbling.” The Times declared on March 7: “Final act for fun revolutionaries.” They commented: “Labour’s left-wing councilors value power more than a place of glory in the Socialist Pantheon… they will cling to office and make the shifts required, shifts which in most cases are perfectly manageable.”

Jenkin’s approach towards Liverpool was entirely different to that adopted towards other councils. Once more on March 5 he declared that “the government could face a decision on putting in Commissioners to run Liverpool in weeks rather than months if the city council refuses to make a legal budget for 1986”. The Echo on the same day carried the headline: “I’ll go to law, warns Lenkin.” The Echo interpreted his warning as meaning: “The government today threatened to take legal action to force Liverpool City Council to fix a rate. Attorney General Sir Michael Havers could intervene in the budget crisis by seeking a High Court writ for mandamus. If the council refuse to obey the court order, it would then be in contempt of court.” Unbelievably, the Daily Star invoked the Liverpool example as an indication of what can be achieved by remaining within the law: “As Liverpool showed last summer, councils with special problems and public support can win major concessions by their arguments. Breaking the law makes everyone a loser.”

Budget Day

As budget day dawned, the local press reflected the mood which had developed in the city. The Post proclaimed: “Thousands get ready to fight Jenkin’s law.” The Post was not to be disappointed. The demonstration which marched to the Town Hall, according to Tony Mulhearn, was “one of the biggest in 100 years in Liverpool”. More than 50,000 were on the march and the response was even more solid than in the previous year. Every section of the council workforce was represented under their different banners. Even NUPE had sections of their membership participating in the demonstration despite the open opposition of the NUPE leadership to the council campaign. Big numbers of uniformed firefighters marched alongside busworkers although the busworkers were not technically on strike because they had made an agreement with the campaign organizers to provide transport for the demonstration.

After all the calumnies directed against the council in the previous six months, the demonstration and the meeting was a huge triumph for Labour. So taken aback was the Echo that it spent to issues disputing the organizers’ estimate of 50,000 participating in the demonstration. The Echo reckoned that a mere 8000 took part and it went to the lengths of carrying a photograph, especially lined to indicate, so it claimed, the numbers attending. Yet the photograph it printed shows people crowding from the Town Hall right through Castle Street and down into Lord Street. One thing is sure; there have been few demonstrations to the Town Hall which required such massive numbers to gather in Castle Street. Derek Hatton captured the mood of the workers in declaring: “This city is going to go to the end of the road in defense of the working class of Merseyside.”

The determination of the demonstration was carried into the council chamber where Labour councilors refused to set a rate. Unfortunately this resolution was not to be matched by other councils.

GLC and ILEA Abandon the Field

Local authority workers responded in a series of demonstrations throughout the country in defense of the “no-rate” tactic and against cuts in jobs and services. But all their hopes were to be cruelly dashed. At the Inner London Education Authority (ILEA) meeting some Labour members joined with the Tories and the SDP to force through “a legal rate” after eight hours of debate. Then the Greater London Council, headed by Ken Livingstone, led the retreat of other councils. Despite all his heroic words and gestures, he led the majority of London Labour councilors into a position of remaining “within the law” and setting a rate and budget which would mean cuts. This represented a turning point in the struggle of Labour authorities against the government.

Livingstone sought to justify his retreat on the spurious basis that a number of councilors had only agreed to support the “no-rate” policy because they were banking on enough right wingers voting with the Tories to enable a rate to be set! In other words, the GLC’s opposition was merely verbal, and was a repetition of its climb-down in 1982 when the Law Lords ruled against its “Fares Fair” cheap transport policy. Livingstone also took refuge in the fact that, unlike London boroughs, the GLC had to legally set a rate by March 10. He said that is was unreasonable to expect GLC members to break the law alone and to refuse to fix a rate while borough councilors were not yet in a similar position. This of course ignored the fact that Liverpool had consciously taken an “illegal” step in the previous year and that Hackney Council had also “gone illegal” by refusing to set a rate in defiance of a court order to do so.

Livingstone typified the “fun revolutionaries” who, when the chips are down, prefer their parliamentary careers to going down the road of “illegality” in defense of workers’ rights and conditions. In effect he wanted a guarantee of complete support before taking a step outside the limits of bourgeois legality. Ipso facto he adopted the arguments of Neil Kinnock – the policy of the “dented shield”.

Livingstone argued that the GLC was following the “deficit budget” strategy of Liverpool. But as subsequent events demonstrated, having sold the pass on March 7, the GLC were not prepared to follow through in defying the government as Liverpool had done in the previous year. The £55 million gap in their budget resulted in cuts in services.

In the wake of the GLC’s collapse, Kenneth Baker jeered: “The united front of the Militant left has crumbled before our eyes. Instead of opening a second front with the miners some of their troops have fled the battlefield!” Neil Kinnock joined the fray describing the councilors who continued to defy the government as “the fingernail of the labor movement.” Derek Hatton replied for the Liverpool councilors:

Is he therefore saying that Labour councilors should but their hands up for cuts and redundancies, because that would be the position if Liverpool and other councils obeyed the Tory law over local government cuts. Neil Kinnock should remember that it is official national Labour Party policy for the leadership to give a lead and to defend those local authorities who break the law in order to protect jobs and services. What he has said will have no effect at all on Labour councilors in Liverpool.

Despite the united front of Baker and Kinnock, there were still rate-capped councils who were holding out against the government. On March 12 the representatives of 25 local authorities met and decided to step up the fight against the government. Derek Hatton declared: “We all regret the way the GLC leadership behaved in the last few days.”

In the midst of this battle, a significant incident, largely unreported in the national press, developed around Kieran Devaney, anchor man for Liverpool Radio City’s controversial chat show Devaney. The Independent Broadcasting authority demanded that the program be closed on the grounds that it was “guilty of contravening the Broadcasting Charter by its political content and comment”. The program was unceremoniously scrapped within 24 hours of receiving a warning letter from the IBA. Unbelievably, Devaney had been accused of “showing political bias towards city council leader Derek Hatton who has appeared on the show more than anyone else” (Echo 13 March). The pressure from the IBA had come from the intervention of Rosemary Cooper, Liberal city councilor, who had been described by Devaney as “a boring old gossip”. This program, perhaps slightly inadequately, compensated for the anti-Labour, anti-Hatton, anti-Mulhearn and anti-Militant propaganda which had poured down like a deluge from the pages of the Echo, the Post and the local radio in general. The axing of the Devaney show was a conscious and blatant example of political censorship. Subsequently, Devaney displayed antagonism and hostility to the city council. He had learned that it was not wise to offend his IBA masters!

Meanwhile, despite the threats of Jenkin, and the hostility of the national trade-union leadership, the labor movement in the city swung even further to the left. Months before, the Echo and the Post had confidently looked for a groundswell of opposition to Militant in the District Labour Party. Now the Echo was compelled to report (15 March): “Militant tighten grip”. It went on: “In last night’s DLP Executive elections, Militant supporters boosted their seats in the 33 member Executive Committee from 10 to around 17.” It also had an interview with Tony Mulhearn in the came issue. In a comment which said as much about the Echo and capitalist politicians as it did about Tony Mulhearn, it said: “Unswerving loyalty to the hard left ideals of Militant Tendency have produced a low key politician who appears to believe what he says”! Tony Mulhearn declared:

I do not believe there has been any other Labour council in the history of this city which has received such a lambasting from its political opponents and from the press both nationally and locally… the party has withstood all that and has emerged in the phase of the campaign in fine fettle. It is a party filled with vitality.

Towards a National Combine Committee

During this period the unions in other local authorities were gearing up for industrial action in support of their councils” refusal to carry through the dictates of the government. On March 19, 500 London council shop stewards met, with representatives of the Liverpool JSSC present. Liverpool stewards were arguing for national industrial action, a call which evoked the comment of the Echo about an alleged “master plan on strikes”. A decision was taken to organize a national local authorities’ combine committee (NLACC) on March 30. This underlined Militant’s contention that a firm stand by those councils which remained “in the frame” would result in enormous support from workers on a national scale. Naturally, Labour’s opponents and their press mouthpieces, attempted to play up any opposition they could find within the workforce. Early on, the press had lighted on the teachers, led by Communist Party members, who had opposed strike action on March 7. However, the attempt to present the teachers as one reactionary bloc was contradicted by a letter in the Echo:

Teachers of whatever political persuasion should acknowledge that the Liverpool City Council with all its faults, has always shown great sympathy for the teachers’ case. Again they are being put under unbearable financial pressure by Mr. Jenkin and his monetarist cabinet ideology. It is their [the government’s] policy which is worsening the “social and economic climate”.

The end of March and the beginning of April saw the conclusion of a period in which a number of local authorities were united against the government. One by one, they would crumble and leave Liverpool alone. This in turn would allow the ruling class and the labor and trade-union leaders to marshal all the forces of their command in an attempt to crush the example of Liverpool. Liverpool was the one council which was to remain defiant until the end. They presented as much a danger to the national labor and trade-union leadership as to the Tory government. If they were to succeed again in their struggle against the government, this would vindicate “Militant methods”. All efforts were therefore bent on isolating Liverpool City Council and particularly Militant supporters.

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