Chapter 6 – Cut or Fight?

After its outstanding victory in May 1983 the new Labour council, with a majority of only three, was faced with a simple choice; obtain significant financial concessions from the Tory government, or abandon the program upon which it was elected. The financial position was dire and Labour was forced to operate within the budget introduced by the Liberals just before the election. This proposed expenditure of £218 million. But the limit for the city’s spending set by the government was £212 million. The Liberals therefore included in their budget so-called “unallocated cuts” of £6 million, which they intended to make in the following year.

Since 1979 the government had stolen £270 million in grants from the city. The successive cuts and deliberate underspending which had been made under Liberal-Tory administration meant that Liverpool’s level of spending had fallen way behind the average for comparable local authorities and even government guidelines. This in turn meant that the financial targets set by the government of 1983-4 were lower than for cities such as Manchester. To remain within the constraints of government spending limits and the Liberal-Tory budget, Labour would have to completely abandon its program of creating 1000 new jobs, reducing rents by £2 per week, and introducing a minimum wage and a 35-hour week for council workers. In addition the council would either have to have sacked 5000 workers or increase rates by 170 percent in order to balance the books.

There were to be many attempts, both by the government and the tops of the labor movement, to argue that “Militant was falsifying the figures” or “deliberately exaggerating” in order to bring about a confrontation with Thatcher. Local government finance with its lending and borrowing on a daily basis is a very complicated moving picture only understood fully by specialists. The contradictory and rapid alterations in local government legislation and frequent changes in the basis of the grant system has complicated it even further in the 1980s.

But no matter how “creative” or “innovative” the attempts to interpret the finances of the Liverpool City Council were at the time Labour took control, one fact stood out: there was a gap of about £25 million between what Labour intended to spend and its projected income. The council, together with all wings of the labor movement, decided that this gap could only be filled by forcing the Tory government to grant concessions. Wiseacres, of course, pontificated: if the Argentine dictator Galtieri could not humble Thatcher, then what chance would one council like Liverpool have? The same narrow and ossified outlook was also displayed towards the miners’ struggle: “They could not win”, intoned the right wing Labour and trade-union leaders.

To be sure, they only dared to state this openly after the miners’ strike had ended. But, to paraphrase Napoleon, “First engage in struggle – and then see what happens.” Regrettably the right-wing labor leadership consider that a guarantee of victory must be obtained before the working class can engage in struggle. Their arid concept of the history of the working class is that only “practical” goals can be achieved. But who decides what is practical? Historically, the proletariat, including the British working class, has advanced only by carving out from marble the steps of its advance.

Not for the first time, however, the skeptical leadership, together with the bourgeois, were to be confounded by the sheer scale, sweep and audacity of the movement in Liverpool and its repercussions throughout the country. Flushed with victory, the new Labour council began to implement its promises. The projected 1000 job losses were cancelled and the first steps were taken to create the extra 1000 jobs promised in Labour’s manifesto. These measures engendered real enthusiasm and strengthened the bedrock of Labour support.

The announcement of 600 new jobs brought queues at the job-centers. The comments of those seeking jobs reflected both the corrosive despair of long-term unemployment and the new mood of hope and optimism engendered by the council. A third of those queuing at one job Center had been unemployed for three years. Many said it was the first time in a decade that anything had been done to create jobs in Liverpool. A correspondent to Militant gave an example of how the potential talents and skills of working-class people are wasted under capitalism: “There was a Physics graduate, unemployed for three years, in the queue with his father.” In the same queue were four members of the local West Derby Labour Party Young Socialists – unemployed for a total of eight years between them.

Building Support for the Council’s Case

The campaign to win money from the Tories began immediately. The council set up a Central Support Unit to coordinate the campaign and to produce propaganda. The youth, led by the Labour Party Young Socialists, together with the council workers, became the shock troops of this campaign. Its brief was to produce propaganda and to organize the campaign locally and nationally. Labour speakers like Tony Mulhearn and Derek Hatton, in a series of meetings, particularly those which led up to the momentous November 19 demonstration, explained that the council would introduce a deficit budget for 1984-5 and raise rates by no more than 9 percent. This would pay for existing services plus Labour’s new measures. In late September more than 500 shop stewards listened to council leaders John Hamilton, Derek Hatton, Tony Mulhearn and Terry Fields MP.

This campaign, on a higher level and touching even more people than the local and general election campaigns, drove home the simple facts of the situation. Capitalism had failed the population of Liverpool. The private sector, upon which the Tories’ strategy for rebuilding the inner cities rested, had failed. For the thousands of youngsters seeking work for the first time the only hope lay in the job opportunities generated by the council.

The great majority of the council workers understood that the struggle of the council was central to the employment prospects of the city. This was later demonstrated by the unprecedented support they gave in the 1984 local elections when 72 percent of them were to vote Labour.

Meanwhile, Labour was also the target of a vicious demolition job, pursued in the council chamber by Labour’s opponents and by the media both locally and nationally. A blanket of silence was drawn over Labour’s achievements in employment and on rents. Not a work appeared about the imaginative Urban Regeneration Strategy. This inventive program proposed to obliterate some of the city’s worst slums and tower blocks and replace them with 6000 council houses. But even the figure of Mother Theresa, deep in the slums of Calcutta, was conjured up as an alleged opponent of Labour. The Echo accused the council of wanting to close down a hostel for the homeless. Labour had not made any such threat, they had merely indicated that the standard of provision in the hostel did not meet the council’s criteria and for this reason, the council refused to refer any more homeless people to them. It was made clear however, that if those who ran the hostel wished it to continue operating, they had every right to do so. The decision of the council was motivated by a concern for the homeless people, not by an indifference reminiscent of Charles Dickens’ heartless Mr. Gradgrind in Hard Times.

A mood of grim determination successfully began to grip the working class of Liverpool in support of the council’s campaign. Michael Parkinson comments in his book Liverpool on the Brink:

Labour’s campaign successfully politicized the budget crisis, turning a complicated, financial argument into a simple choice between the government’s version of the story and their own. It tied together the interest of the council workers, the consumers of local services, and of the domestic and commercial ratepayers. And it won the propaganda battle for Labour. The campaign persuaded enough people that the Labour council was right and that the major cuts in services and jobs or large rate rises were the only options.

Unbelievably, Labour was to be indicted later on by its opponents both inside and outside the movement for being “conspiratorial” and “secretive” over the details of its finances. Yet no council in Britain had driven home with such thoroughness and in such a simple and clear fashion the economics of the council. Moreover, pressure was exerted from below on the council to implement its program.

The poorer parts of the city expected immediate results, some believed in miracles. Croxteth, with over 70 percent youth unemployment, and an infant mortality rate of 40 percent above the national average, was demanding immediate action to alleviate the quite horrendous social and housing conditions in their area. Residents demanded immediate improvements in housing, including the demolition or conversion of flats. This pressure from below directly contributed to Croxteth being one of the priority areas for the Urban Regeneration Program. The landscape and housing conditions of Croxteth were to be completely transformed within three years. Even the most bitter opponents of Labour could not deny the real change in the lives and conditions of working people that this program was to bring.

The feeble basis for Tory reaction was illustrated in a “revolt” of ratepayers in early August 1983. Three hundred and fifty “besieged” the council, at one stage locking councilors in the council chamber, in protest at plans to build council houses near their homes!

The bold measurers taken by the council set alarm bells ringing in Whitehall. This was reinforced with the election of Militant supporter Derek Hatton as Deputy leader of the Council in August. This event merely confirmed what the bourgeois knew and feared: the Marxists provided the spinal column of the Liverpool labor movement in the looming confrontation with the government.

John Hamilton remained Leader. He typified the old reformist Left within the party who not so much “led” as were dragged along by the mass movement. This was not without many sighs on their part and much wringing of hands.

Derek Hatton and Tony Mulhearn, on the other hand, personified the youthful, dynamic, working class forces who were determined to go to the end in the struggle against the government.

It was not just the fighting spirit of the working class which the Liverpool struggle so magnificently displayed but also the clear perspectives, strategy and tactics of the Marxists. Of course they did not have a monopoly of leadership, which also encompassed non-Militant supporters like Jimmy Parry, Tony Byrne, Dave Lloyd, Dominic Brady, Frank mills and others. Nevertheless the Marxists played an important and sometimes critical role in the battle with the government. Derek Hatton’s replacement of Eddie Loyden, who had resigned when he was re-elected to Parliament, was noted by the bourgeois. It signified the seriousness with which the Liverpool labor movement viewed its struggle to rescue the city from the cycle of deprivation.

As early as July, the Guardian reported: “Jenkin ready to take over Liverpool”. Seeking to mobilize opposition to the council, Patrick Jenkin had declared in a visit to Liverpool that he “could seek special powers through Parliament to bring in a Commissioner”. This was not the last time that a threat to sweep aside a democratically elected council would be made and yet it evoked not the slightest protest from the Labour Party’s front bench. Secretly many of them sympathized with Jenkin, although they would have to wait for a far more favorable moment to declare their intentions openly.

At the same time as securing Labour’s base in Liverpool the campaign was taken onto the national plane. A letter was sent from the Liverpool Labour Group to all Labour MPs throughout the country. The Labour Party Conference in Brighton in September, which had seen the Militant Editorial Board expelled earlier in the week, listened to the leaders of the Liverpool labor movement explain how they had won their remarkable victory earlier in the year.

Tony Mulhearn contrasted the performance of Labour in Liverpool to the rest of the country. He asked the conference: “Why did Labour’s national vote slump to 27 percent despite the massive unemployment under Thatcher’s government?” He pointed towards the divisions within the Party, “Fleet Street have been able to make much of the divisions in the Party due to witch-hunts and the attacks by leading comrades in the Labour Party.” Derek Hatton’s speech was warmly greeted by the delegates. He explained how Liverpool because they would be in the same boat in the following year and asked for a massive presence on the forthcoming November 19 demonstration. However, despite cutbacks which had already meant the disappearance of 100,000 local government jobs, 18,000 of them teachers, the NEC opposed a resolution, moved by West Derby, which supported the stand of Liverpool City Council.

The buoyant mood in Liverpool could not have been in greater contrast to the morbid skepticism and demoralization which existed within the Labour Party in other areas of the country. Party membership nationally declined following the defeat of June 1983 while in Liverpool the membership, due to the active campaigning approach of the party, increased dramatically. In Broadgreen it doubled with the Young Socialists branch reaching 100 members, thereby gaining entitlement to a Labour Party Conference delegate in 1984.

The campaign also turned to the workers in the private sector. The recent spate of redundancies had reinforced the support for Labour amongst workers in private industry. Labour pointed out that the loss of 2000 jobs in United Biscuits saved the company nearly £11 million. But lost taxes, national insurance and rates, plus unemployment benefit and social security would amount to a cost of about £20 million (according to a social audit by the Merseyside County Council and Liverpool City Council). The council used this to explain that if the government was successful in forcing the council to sack 5000 workers, the cost of redundancy and lost taxes would have easily exceeded the £30 million demanded by Labour to pay for their program.

Preparing for November 19

The Tory and Liberal propaganda onslaught could not cut across the mood of support for the campaign which was shown in Autumn 1983. In early November 150 trade-union activists from factories, depots and offices throughout Merseyside met to give support to the campaign. This had followed an earlier meeting of 700 local authority stewards. Thos who were opponents of Militant, and who were to express this opposition in the sharpest fashion at a later stage, were compelled at first to give support to the campaign. Peter Cresswell, leader of NALGO and secretary at that stage to the Joint Shop Stewards Committee, wrote a letter to the New Statesman (6 January 1984) in reply to an attack on Derek Hatton and Militant. He stated:

I am far from being a Militant supporter and the trade-union members whom the committee represents range from Tories to Trotskyists – we encompass teachers, binmen, clerks and electricians. Yet among all these employees of Liverpool City Council, there is a growing realization that the confrontation towards which the council is heading is unavoidable… We know that we are going to have to fight for our lives in 1984 – and, whether we have to fight the council, the government or commissioners, fight we will.

Unfortunately, this resolve was not shown by Cresswell when the going got rough in 1985. In the same issue of the New Statesman Paul Thompson, a leader of the miniscule Labour Coordinating Committee group on Merseyside declared:

Whatever the other political divisions in the party, we are all united behind the current strategy of confronting the government. This is not a position of “principled bankruptcy”, but a product of our condition after a decade of disastrous Liberal-Tory rule in the city.

The only section of the Liverpool labor movement to express opposition at this stage was the rapidly declining Communist Party. Although claiming to be “Communist” and “Marxist” it had effectively abandoned Marxism. The “Euro-Communists” led by Gordon McLennan and given theoretical expression by Professor Eric Hobsbawm were to the right of the Labour leadership on many issues. They have, for instance, come out in favor of an electoral alliance with the SDP traitors! The adherents to the Morning Star on the other hand, are a dwindling band of aged, unreconstructed Stalinists. Both wings of the CP had increasingly lost their base in the factories and workplaces. Its support within the unions was more and more located within the trade union officialdom, invariably acting as a “left” cover for the most conservative stratum. Over the decades they had become accustomed to wielding the conductor’s baton whenever action was called for the labor movement. But their support had declined in Liverpool as it had done nationally. They were being supplanted by Militant supporters in one union after another and they were virtually without influence in the District Labour Party, the main focus of working-class activity in the city. Incapable of expressing open political disagreement they were compelled to niggle over the details and the character of this or that demonstration.

Back in June the Morning Star had carried a headline “Chaos Hits Mersey Dole Demo Plans”. At the end of September they wrote:

We have already stated that whilst we support the demonstration in November and the campaigns against unemployment, we feel that the attitude of some Militant elements in the council tends to limit the scope of the campaign. It could be the same with this fight on the city’s finances and services… Militants must also learn that they do not have a monopoly of answers and should stop acting like some pied piper expecting everyone to follow them. (Morning Star 9 September).

But pied pipers can only attract followers if they happen to be playing the right tune, i.e. if the program, policy, and perspectives correspond to the mood of working people at a certain stage. The Communist Party were being pushed to the sideling and they did not like it one little bit. Their opposition to Militant’s influence in the struggle pushed them into becoming at a later stage the political attorneys of the most right-wing trade-union and labor leaders.

The leadership of the Labour Party meanwhile were taking fright at the scenario unfolding in Liverpool. They could comfortably coexist with Labour councils that were carrying out Tory cuts. No Labour leader condemned the Newcastle City Council, which announced in November 1983 that 1300 jobs were to be cut from the workforce of 18,000. Jeremy Beecham, leader of that council, declared:

There will be painful damaging reductions and the loss of many jobs among professional, administrative, clerical, manual staff and teachers. The quality of life in the city is bound to suffer although we shall make every effort to preserve services for the most vulnerable.

In contrast to “extreme” Liverpool, even Sheffield and its Labour leader, David Blunkett, was praised by none other than The Economist for its “social experiment”. The bourgeois, as subsequent events would demonstrate, could live with David Blunkett or Ken Livingstone and the trendy policies of the Greater London Council. They recognized that Livingstone and Blunkett would not go all the way, but in Liverpool they understood that something entirely different was taking shape.

If there were any doubts about the mood that was developing in Liverpool these were soon dispelled by the turn-out on November 19. In bitterly cold weather, in a carnival-like atmosphere, more than 20,000 workers marched through the city’s streets. It was a solid working-class demonstration. The council had circulated 210,000 bulletins and the District Labour Party had distributed 180,000 copies of their paper, Not the Liverpool Echo. There had been a colossal exertion of energy at factory gate meetings, street meetings and in the canvassing and work carried out by local Labour Parties and trade union branches. Labour Party workers – particularly the youth who flocked to Liverpool from all over the country – were rewarded with a magnificent demonstration.

Not just council workers but delegations from Fords, Cammell Lairds and all the major Transport and General Workers’ Union branches participated in the demonstration. A big section of the march was composed of working-class women, particularly those who were affected by cuts in the National Health Service. Students joined in alongside a massive contingent of council workers and ordinary working people who had been drawn into the campaign and turned up on the day. A local housewife on a radio phone-in prior to the demonstration said:

I am glad to have got a leaflet through the door about the march. I wouldn’t have known any more about it otherwise. I am not in any political party. But I will be there. I’ll just turn up myself and make my own demonstration. It’s important you know to help your council.

Another worker declared:

I started last week for the council, I’d been on the dole for a year. I’m a fan of the council. I couldn’t repeat what I’d think. I’d be effing and blinding all over your tape.

Another stated:

I was with my mates last night in the pub and one of them said, and he’s a priest, “It was the best thing that could happen because Liverpool has got to show the way in defeating Mrs. Thatcher”.

The speeches from the platform were all greeted enthusiastically. Eric Heffer’s demand for extra-parliamentary action was backed up by Derek Hatton’s call for a city-wide general strike in the event of Tory Minister Jenkin moving to put commissioners into the city. President of the District Labour Party, Tony Mulhearn, declared that the demonstration was the biggest local demonstration since the struggle against Ted Heath’s Industrial Relations Act – probably the biggest since the war. He declared:

This is a clear indication to the Tory government, to the establishment and to the ruling class that it would be a mistake to take Liverpool on… Make no mistake about it, the Tories can be beaten. The miners forced them back in 1981. Even within her own ranks, there is opposition to this seemingly impregnable iron government. They will not be defeated through rational argument. We have to believe we can win this struggle.

Neil Kinnock was invited to the rally but sent a message instead, in which he stressed, “the Party is committed to a full-scale fight against the government’s proposals to restrict local government”. The classical role of the Labour leadership towards any decisive struggle is like a man who is found following a crowd. When a by-stander asks him who he is, he replies, “Oh, I’m their leader.” In the Liverpool struggle, however, the Labour leadership would shift from following to hurling rocks at the crowd! 1983 ended against a backdrop of growing radicalization and combativity in the city but also with consternation on the part of the ruling class and the leadership of the labor movement about how to deal with the situation.

Towards a Deficit Budget

The demonstration of November 19 was seen merely as a springboard for an even wider and greater mobilization of the working-class population of Liverpool behind their council. In early January 1984 a special Liverpool City Council campaign working party was set up to promote public, trade-union and political support for the policies of the council. More than 70 local leaders of trade unions in the private sector, tenants’ associations, local authority workers and other local councils attended the inaugural meeting. In a unique development chief officers of each council department were also instructed to attend in order to ensure that the resources of their department were put behind the campaign.

The campaign working party agreed to organize 18 public meetings throughout the city in February, a series of factory gate meetings, and the production of regular briefing notes for circulation throughout the city. A “democracy week” in defense of local authorities was planned by the TUC for late March. This subsequently proved to be a very tame affair in most of the country. But in Liverpool the call was made for a 24-hour stoppage and a mass demonstration on March 29, which had been designated as the crucial council “budget day”.

The choices facing not just the council but the working class of the city were explained in that tumultuous three-month period leading up to March 29. The council was carrying out its program and the working class understood this. The only promise with which Labour had found some difficulty was the implementation of a rent reduction of £2 per week. It was discovered on coming to power that to implement this measure would have meant that, since more than 50 percent of rent payers were on social security, the £2 would be deducted from the DHSS: £1.5 million would therefore go straight back into the coffers of the government. To avoid this the council implemented a £40 decoration grant for every council tenant.

Labour did not contemplate illegality lightly. Derek Hatton explained the situation in early February:

Obviously we do worry about the prospect of surcharge and bankruptcy. If we all stick together though, especially if we have a national campaign, the Tories will be powerless too act. This is not just a fight conducted by and on behalf of 51 councilors – it is a fight for a whole movement and must be conducted by the movement… Our program to begin to tackle some of Liverpool’s problems has been described as the work of “mad Marxist loonies”. Our answer to that is – look at the disaster inflicted by the bosses, Tories and Liberals in Liverpool – who are the real loonies?

A rash of small strikes broke out throughout the Merseyside area. The most exploited and downtrodden sections of the working class were raised from their knees by the example of the militant stance of the city council. A bitter dispute broke out over the question of redundancies at Scotts Bakeries. John Wests faced their first strike for 100 years. There the management were forced to retreat, reinstating shop stewards sacked because they had refused to work hours imposed by the management. Crucial to victory was the decisive action of the city council which was about to boycott John West products.

Not a crumb of comfort however was for Liverpool at the Labour Party’s local government conference at Nottingham in February. GLC Leader Ken Livingstone received a rapturous reception from the 1000 councilors when, striking a defiant tone, he said: “If it puts us outside the law, it is the laws which are wrong. We have the right and duty to defend out people.” But he was not able to live up to these fine words when put to the decisive test 12 months later.

Eric Heffer demanded that “a future Labour government would indemnify Labour councilors defending their authorities”. The Daily Telegraph commented that this was a call for, “an effective pledge that councilors who broke the law could not be put in the same position by a Labour government as the Clay Cross Councilors”. Bur Neil Kinnock, haunted by the coming confrontation in Liverpool, urged Labour councils to obey the law and remain in office to “minimize the effects of any cuts”.

John Cunningham, Labour’s local government spokesman, also showed his own preoccupation with Liverpool when urging the conference not to be “obsessed with Liverpool”. He stated that, “confrontation is not the way forward. We will not give Liverpool a blank check for what they want to do without telling all their financial details first.” But when they did receive “all the financial details”, this did not affect their approach to Liverpool one iota. They demanded that the council should carry out the dictates of the Tory government and in effect combine a massive rate increase with sackings.

Even David Blunkett, at this stage the darling of the left, declared “We are not going to stab them [Liverpool] in the back… but we’ll have to tell them that if they can stick with us then they should.” The suggestion that Liverpool should “stick with us” was tantamount to urging Liverpool to carry out cuts in the forthcoming budget. Blunkett’s statement was an anticipation of precisely how he, along with Livingstone and other alleged left-wing council leaders, would be prepared to act when put to the test in 1985.

The supine position of the Labour and trade-union leadership had encouraged the Tories in their attacks on local government. Their rate-capping legislation had centralized control over local authority spending in the hands of Patrick Jenkin, the Environment Minister. As many commentators, even those in the Tory Party, had hinted, this legislation effectively reduced local government to a sham.

Since the Tories had been in power the expenditure on building and housing repairs had been cut by more than 40 percent and 83,000 council jobs had disappeared since 1979. Rate Support Grant (money given by government to local authorities) accounted for 66.5 percent of local authority spending in 1975. But the Tory axe cut it to just over 50 percent in 1984. Rates, as a whole, had increased by 94.8 percent since 1979, compared to a 57 percent increase in prices generally. Thus a massive £10,000 million had been added to the rates bill in the four years in which the Tories had been in power. The burden of this had naturally been carried by working-class families.

The scale of the Tories’ attack had produced a mood amongst councilors and council workers that “enough was enough”. The opportunity for a united fight-back had never been greater and there were splits within the government on this issue. The “wet” wing of the Tory Party were alarmed that the proposed cuts would result in a social explosion. The centralization of power by the government contradicted the previous policy of the ruling class and was an indication of the desperate straits of British capitalism. In the period of the boom local government was relatively “non-partisan”. In general it did not represent an arena of great conflict. The majority of councils were dominated by right-wing reformists who were quite happy to play a game of “Ins and Outs” with the Tories and Liberals. It was also the time when a section of the right wing did not hesitate to fill their own pockets, resulting in the corruption and scandals typified by T Dan Smith in the North-East who was jailed for is involvement in the extensive corruption surrounding corrupt architect, John Poulson. After conviction Smith was expelled from the Labour Party, but following his release from prison was re-admitted back into party membership in 1987. This took place soon after Militant supporter Bill Hopwood had been expelled from the Labour Party.

One of those convicted in the Poulson scandal was Andy Cunningham, whose son John was the right-wing spokesman on the environment. Marxists do not believe that the “sins of the father are visited on the son”. But John Cunningham’s gaining of the parliamentary nomination in Whitehaven was undoubtedly assisted by Andy Cunningham’s strong influence in what was then the General and Municipal Workers’ Union (now GMBATU), which was a powerful force in the local Labour Party. Moreover John Cunningham subsequently became a fervent advocate of nuclear power, and was thereby christened “Plutonium Jack”. Opponents of nuclear power cruelly claimed that “he glowed in the dark.” However it is no laughing matter for those who, as it has subsequently been shown, have contracted cancer from the nuclear waste emitted from the Windscale plant located in his constituency. Notwithstanding this, John Cunningham did not hesitate to associate himself with the dirty, unfounded allegations made by Roy Hattersley of “corruption, literal corruption” against Liverpool councilors in 1985.

But the measures of the Tories, while centralizing power in the hands of the government, also ran the risk of centralizing the opposition. A unique opportunity for a national campaign embracing councils and their entire labor force in the major metropolitan areas, was presented by the measures of the government. However, once more, the Labour leadership bent all their efforts to keeping any “opposition” within safe parliamentary bounds. John Cunningham even went so far as moving an amendment in the House of Commons to the Rates Bill which limited its measures to “a particular number of authorities in any one year” thereby endorsing the overall provisions of the bill.

Incapable of appealing to the mass of the working class, the so-called “left” as well as the “right” substituted gimmicks for class action. The Greater London Council, for instance, planned to bombard Patrick Jenkin with Valentine cards, bearing the inscription, “We Love London”. Livingstone’s philosophy was “Never mind the weather, all pals together.” George Tremlett, dissident Tory councilor and Ann Sofer, who deserted Labour for the SDP were happily recruited by Ken Livingstone to “fight the government” over the abolition of the GLC! Without any real faith in the mass of working people the GLC later on Centered all its hopes on the exhumed House of Lords! Giant banners extolling the “opposition of the House of Lords” festooned County Hall.

In February, Kinnock had sent one of his acolytes, Jack Straw, to Liverpool to discover “the real situation”. An inveterate witch-hunter, Straw was one of the worst candidates for such a rule. The open hostility and contempt with which he was viewed by all strata of opinion on the left in Liverpool did not seem to daunt him. Like the Greek king Agesilaus, his motto seemed to be “I seem to thee an ant, but one day I shall be a lion” but for his, ignominious role in Liverpool Jack Straw will forever remain an ant! Yet even Straw was to be taken aback initially at the scale of the problem confronting Liverpool. He was shown the books and given a detailed explanation of the financial position. He then declared to the press:

The problems facing the city council are not of their own making but have been inherited from the irresponsible penny-pinching former Liberal-Tory administration. They need more money, not government penalties… The picture that I was given of the Tory inheritance left to Labour last May by the previous Liberal-Tory administration was worse than I had anticipated… it appears that the Liberals had under-budgeted by some millions, so that the city council was already well into government penalty areas regardless of any policies on which it was elected last May. This is compounded by central government penalties which mean that for a modest increase in expenditure ratepayers could face rate rises of more than 100 percent. (Guardian, February 21.)
But while the Labour leadership, in the words of Neil Kinnock, were prepared to give “sympathy by the trainload”, they were not prepared to come behind Liverpool in facing up to the Tory government. Kinnock even refused to visit the city. Only when the relationship of forces had moved in favor of the right, did he deign pay a visit.

Meeting With Jenkin

On the day following Jack Straw’s visit to Liverpool, the labor group traveled to London to meet Jenkin. In the days leading up to the meeting, through carefully leaked statements in the bourgeois press in what the Guardian called a “political poker game”, Jenkin had threatened to suspend the council and impose commissioners. When the Labour group came face to face with him, they were met with a blank wall of opposition which bordered on indifference.

Cocooned in his ministerial chair and in Parliament, he was ignorant of the scale of the problems which faced the city and the grinding poverty left him cold. As the council spokespersons outlined their case, they met with stony-faced opposition from Jenkin and his advisers. Unaccustomed to the language of the street, they were shaken by an interjection from Derek Hatton who said, “Everyone is being too polite. I want to tell you mate, that you are for it if you don’t give us our £30 million.” Derek Hatton also pointed out that demonstrations outside Mr. Jenkin’s house in London could not be ruled out. Labour councilors were facing the threat of surcharge, fines and the possible confiscation of their houses, for the “crime” of defending the working class of their city.

Jenkin chose to interpret this as a threat of “violence” and “riots”. Yet Derek Hatton had stated no more than the obvious; the measures of the Tory government were preparing the soil upon which violence could take root. Others, like John Hamilton, had expressed the same views many times before. Even Alfred Stocks, the generally moderate Chief Executive “was concerned that revolt was in the air in the city”. Jenkin’s advice to the councilors was to increase rates by 70 percent and to make drastic cuts in services and jobs.

The next day the press gave a relatively low key account of the talks. However a few days later Derek Hatton’s alleged remarks were blown up by the right-wing tabloids. The Sunday Express (26 February) in a banner headline declared: “Militant’s Threat to Tory Minister”. It claimed to reveal “one of the most chilling insights ever into the violent nature of left-wing extremism”. Patrick Jenkin was quoted as describing the Liverpool councilors as “a very nasty lot”. Tony Byrne, who Jenkin incorrectly described as a “hard Trot”, countered by describing Jenkin as “a very bad man”.

The reaction of Patrick Jenkin and Fleet Street had little to do with what actually happened at the meeting, but everything to do with the fact that the Chesterfield by-election in which Tony Benn was the Labour candidate was taking place. The miners’ confrontations were taking place on the picket line. The press tried to create an amalgam of students pelting Cecil Parkinson with eggs and tomatoes at Essex University, a picket organized against Mrs. Thatcher in Warwickshire, the rather theatrical knocking over of the Coal Board boss MacGregor by demonstrating miners and of course the threats of “riots” in Liverpool.

This approach may go down well in the Tory shires but had little or no effect on the working class of Liverpool. Derek Hatton described Jenkin’s account of the meeting as “blatant lies.” He declared:

The only violence we know about is the violence being shown by Patrick Jenkin and the rest of the Tory government against the people of Liverpool. It is the violence against those on the dole, those without houses and hopes for the future. None of us spoke to him in threatening terms. What we said was that if the government continued along the lines they are going now, there will obviously come a time when young people will react.

Preparing for Budget Day

A head of steam began to build up in the city in preparation for a city-wide strike on the council budget day, March 29. Enormous enthusiasm was displayed at the series of public meetings organized by the council and the council received unprecedented support from most of the unions. NALGO ran courses for 180 shop stewards on the theme of “Our City, Our Fight”. The 5800 members of NALGO were expected to some out solidly in favor of the strike alongside the 8000 GMBATU members and other manual workers. The only opposition to the strike came from the teachers’ union, the NUT, and the National Union of Public Employees (NUPE), which had only 2000 members. At a mass meeting the NUT had turned down the strike by the narrow majority of 100. There was much bitterness in the labor movement at the ambivalent role played by the NUT leaders. While officially supporting the strike call, in practice their lukewarm attitude led to the majority voting against strike action. Incredibly, particularly in view of their on later strike action, Jim Ferguson, the NUT Branch Secretary and member of the Communist Party, declared: “If we were seen to withdraw their services in March which means the loss of the full day’s education, that would not be the best way to gain support from the parents”!

NUPE’s attitude towards the strike was conditioned by the political opposition to Militant of NUPE leader Jane Kennedy. In most local authorities, there is one union which tends to act as a refuge for those workers who are not prepared to engage in struggle. In other areas this role had been sometimes fulfilled by GMBATU. In Liverpool the roles were reversed. Nevertheless, had Labour leaders been allowed to address the rank and file of NUPE, they would undoubtedly have convinced them of the need to take strike action. However, the great “democrat” Jane Kennedy was not prepared to sanction such a move nor was she or the other leaders prepared to give the members the right to vote on the issue of strike action. But the decisions of these two unions failed to cut across the expectant mood that began to develop within the ranks of the working class on Merseyside.

Layers of the population and organizations not traditionally associated with the struggles of the labor movement were drawn behind the council’s campaign. The church, with 2000 years of experience behind it, has learned to bend with the prevailing social mood. It accommodated itself successfully to feudalism and then adapted to the variegated types of capitalist regime over the last 300 years. Latterly it has even established a modus vivendi with Stalinism, the Catholic Church helping to dampen down the movement of the Polish workers in the last few years. As was discussed in Chapter 1 religion also played an important role in the development of Liverpool and in the shaping of its politics. However, with a loosening of their grip on the working class, both Catholic and Protestant churches have leaned on one another to shore up their narrowing base in the city. At the same time the good shepherds of the church were bound to reflect the pressures on their flock.

In 1983, and to some extent in 1984, the Catholic Archbishop Derek Worlock and Anglican Bishop David Sheppard took a generally sympathetic approach towards Labour, although Sheppard was less “sheepish” than Worlock, who was anything but “warlike” in his support for the council! At all times they attempted to persuade the council to abandon any idea of breaking the “rule of law”. Nevertheless David Sheppard in particular did not hesitate to attack the government: “We are wasting the God-given resources of the nation by leaving three million people on the dole and we are breeding a dangerously bitter spirit.”

At the same time secret communications and negotiated with the government were conducted by the church leaders. In reality they were as terrified of the movement that was developing in Liverpool as the ruling class itself. But they also had to wait for a more propitious movement, before they could openly form a common front with the government.

Shopkeepers began to display Labour stickers in support of the March 29 Day of Action. Even some policemen were reported by Labour workers to have indicated support for the stand of the council. Reformists have argued that Labour must take a “middle-of-the-road position” in order to win the middle layers of society but, as Aneurin Bevan once said: “If you stand in the middle of the road, you’re likely to get knocked over.” Militant pointed out that if the labor movement acts decisively the ranks of the working class would fuse together in one unified movement, and this in turn would draw to its side the middle layers of society. Liverpool bore out what the Marxists have always argued. The outline of such a process began to develop in Liverpool in the early months of 1984. A similar phenomenon was witnessed when small shopkeepers, professional and managerial groups were drawn behind the miners: they clearly saw the closure of the mines as representing the death knell in their communities. Not just the miners would suffer if the government won, but whole communities including sections of the middle class.

The Labour council, as the 1984 May elections were to brilliantly underline, was the real champion of the needs of the city. Every corner of Liverpool life was affected by the struggle that was looming. The Milk Cup Football Final on March 25 was between Everton and Liverpool. Labour produced red and blue stickers for the different supporters with the slogan “Liverpool/Everton supporters back our Labour council”. On the morning of the match, Labour workers who stood outside Lime Street Station and bus depots to hand out leaflets and collect money for the battle were warmly received. The mood of “us against the world” was heightened by the Cup Final. One observer noted that on the tube from Baker Street in London to Wembley groups of Liverpool and Everton supporters traveling together were chanting “Liverpool, Everton, Maggie Maggie Maggie, Out Out Out!”

The strategists of capital and their press began again to express their worry at the situation. The Times (21 February) gnashing its teeth, demanded that the Liverpool “rebels” be shown no mercy: “If martyrdom is unavoidable, the martyr could be given an ignominious and obscure end.” But at the same time it expressed the growing consternation at the repercussions on the money markets of an “illegal deficit budget” in Liverpool: “Noises from Liverpool politicians have, without doubt, sent unpleasant shivers through the market for local government loans.”

The Guardian declared hysterically, “The air is thick with talk of rebellion, even revolution.” Of course, ever mindful of the need for “correct revolutionary tactics”, the same journal proffered the advice:

If Liverpool goes bankrupt, however, the ensuing chaos will discredit not the government but the Labour council. It will also occur a year before local authorities join battle properly with the government over rate-capping, thus risking spoiling that possible tactic with the memory of “revolutionary defeatism”. Illegal rebellion on rate-capping would be difficult and dubious enough; for Liverpool to pull out the plugs now, while it still enjoys the doomed luxury of accountability, seems pure folly. (Guardian, 21 February).

Shades of Kinnock and Blunkett in these lines! Despite this, one year later when many authorities were in Liverpool’s position, the Guardian advised them precisely “not to join battle” but to accept the will of Parliament!

But the leadership of the council remained implacable in its determination to defend all the jobs and services. In reply those who urged the council not to defy the law, Derek Hatton declared, “If out predecessors in the movement hadn’t broken the law, 12-year-olds would still work down the mines and 14-year-olds up the chimney. If we don’t fight in 1984 we would either have to sack one in six of our workforce or to treble the rates. We are not prepared to do either of these, we will fight for jobs and services.”

The five Liverpool Labour MPs were no less intransigent. Terry Fields declared, “All I can say, and I speak for the other MPs, is that we will be there on the picket lines and occupying the yards if it comes to that.” Eddie Loyden, Labour MP for Garston, was still a city councilor and if he was to be surcharged, it would probably mean his removal as an MP. He declared that there was “no acceptable alternative to the course which the council is following. The course is ser.” He fully accepted the danger to his personal position, but Liverpool was in “a desperate position” with the possibility, according to the Sunday Times (February 19), “that it will lead to civil disorder”.

This determination at the top was more than matched by the resolve from below. At a mass meeting of NALGO in early March, 3500 turned up to the Liverpool Boxing Stadium, although 1000 were locked out when the management of the stadium cited fire regulations. Those present at the meeting supported the strike call with not one contribution against.

The high degree of involvement and the politicization that had taken place among the manual workers was best reflected in the mass meeting of the GMBATU City Council Cleansing Department. Out of an attendance of 1000 at the meeting, only one worker abstained! Deputy Convener Bernie Hogan in attacking the previous Liberal-Tory council pointed out that when they were in control so many trees were planted in Liverpool in place of houses that “If we are not careful Liverpool will end up like Sherwood Forest with us poor robbing the rich barons.”

The Liberals’ Budget Proposals

The Tories were now of such little significance, and had lost so much of their base among workers in Liverpool, that they supported swinging cuts rather than rate increases. The Liberals on the other hand, sensing the mood were unwilling to be cast any longer as the party of cuts. They therefore demagogically produced an “alternative budget” with a “cast iron guarantee” of no redundancies. Their figures were plucked out of the air with no real basis in fact. Tony Byrne declared:

A Liberal budget of £220 million could only be achieved by compulsory redundancies. It also proposed that permanent council jobs be replaced with 5000 temporary MSC jobs. No mention was made of how these MSC jobs are to be funded by the council. The council’s contribution would be nearer £8 million to top up wages and pay for other costs… nothing is said about the £6 million of cuts agreed in the previous Liberal budget which the Labour Party refused to implement… It would mean cutting around £50 million of jobs and services. A single figure rate increase for 1984-5 would mean a total spending of around £220 million. Even the Tory Party has admitted that the council would need to spend at least £245 million next year – equivalent to a 70 percent rate increase for the city services.

Council workers who think it offers a “lifeline” should think again. Members of the public who think there is a painless way out of the city’s financial crisis should think again. The Liberal figures are an illusion. There are no easy options – if there were, we would have taken them.

The sheer lack of credibility of the Liberals’ “alternative budget” served to divide them from the Tories and was a factor in the split between both parties in the crucial March 29 budget debate.

Meanwhile, Liverpool’s campaign had found a big echo nationally. A Militant public meeting held in Bermondsey, London, in early March was addressed by Liverpool councilor Paul Astbury. After the meeting and enthusiastic worker approached him to declare “If they take your home you can come and live in mine. If they take your car, you can have mine.” This was typical of the reaction of workers in the city and throughout the country.

Despite the hysterical press campaign and the personal vilification of the leaders the bourgeois were incapable of breaking the will of the working class on Merseyside. The Liverpool drama was unfolding against a background of heightened class struggle. The miners’ strike had begun and the democratic right to belong to a union had just been denied to the workers at the GCHQ communications headquarters by government dictat.

Merseyside was the area of greatest solidarity with the GCHQ workers when a total of 100,000 workers responded on February 28 to the call for action by the TUC. All the major workplaces Shell, Cammell Laird, Vauxhall, British Aerospace, Pilkingtons came out on a one-day strike. In Liverpool itself the council workforce was solid and the only large-scale industry which failed to respond, by a very narrow majority, was Fords. The strike of the bus crews had kept attendance at a demonstration through the city to 5000, but the combativeness of the Merseyside workers was unmistakable.

This mood was fueled by the callous indifference of the area government towards the avalanche of redundancies in the area. Thatcher’s response was to request to intervene to prevent the redundancies of British-American Tobacco was to reply: “The government does not wish to intervene in matters concerning a company’s commercial judgment.” While refusing to act to prevent job losses, the Tories were quick enough to back up bosses like Eddie Shah. Millions of pounds were spent mobilizing the police to defend his strikebound Warrington printworks.

Right-Wing Split in Labour Group

By now, Thatcher, Jenkin and the strategists of capital were grimly looking for points of support within Liverpool upon which they could base their opposition. Given the composition of the Labour group, with only a minority of Militant supporters and with the presence of a number of open right wingers, it had remained remarkably cohesive. But the capitalists, together with the leadership of the labor movement, were exerting enormous pressure on the small right-wing rump to publicly break with the left and thereby sabotage any possibility of an “illegal budget”.

The long-predicted split was delayed until early March. Without ever once expressing their opposition either within the council or in the Labour Party, seven councilors declared in the press that they were not prepared to support an “illegal budget”. They were led by longstanding right wingers, Eddie Roderick (who had in the past supplanted John Hamilton as Labour group leader in a short-lived tight-wing coup in 1978), Bill Snell an USDAW official and Paul Orr from Vauxhall ward. Roderick had already deserted his ward for the forthcoming election in May, and therefore calculated that he had nothing to lose. Gilmoss Labour Party, which embraced the ward represented by councilors Roderick, Murphy and Snell, three of the seven, immediately dissociated the Party from their actions. It called upon them to make an immediate retraction. Tony Mulhearn declared that any councilors that broke the mandate upon which they were elected in the May 1983 elections and voted for cuts in jobs and services would be seen as “political lepers” by the mass of the working class on Merseyside.

One of the councilors who declared her intention to vote against the budget was Margaret Delaney who said: “We should put the city through what the government is telling us to do and let the wounds bleed. It is not until the people of the city have been put through mass redundancies and forced to pay high rates that they will realize what the government is doing.”

It is the Marxists in the past who have been accused, quite falsely, of propounding this “theory” of “increasing misery” but in fact, Marxism teaches that it is not necessarily a big drop in the conditions of the working class which radicalizes them. It is more often change from one epoch to another. This can come from an upswing following on from a period of stagnation as much as from a decline in production after a period of prosperity.

The views of Delaney, who soon after resigned from the council, with her contempt towards the working class and a cynical disregard for the suffering of working people, were the same as the rest of the “scabby seven”. At a lobby of the Labour group on February 23, Roderick, one of the seven, passed lobbying stewards and spat out at them, “There’s no way I’m going to vote for an illegal budget. Do you think that I want to end up on the dole like you lot? I’m not bloody stupid.” The rebels were hailed as the “sensible seven” by John Cunningham and the rest of the Labour leadership.

A delegation of councilors and labor movement representatives from Liverpool met Neil Kinnock in the House of Commons on March 19. The full details of Liverpool’s position were once more outlined by the council’s main spokespersons. Tony Mulhearn said that the press had played up the meeting as an attempt at a compromise: “It was nothing of the sort. Liverpool had come to ask the national leadership for full unequivocal support. They were prepared to listen to anyone who could show an alternative that did not include massive rate or rent increases or job losses.”

Kinnock agreed that it was not a meeting to call for compromises. He inquired, however, what Liverpool could achieve with the powers that it had: “Whatever course of action, you will be deprived of achieving your aim.” He then propounded his theory of the “dented shield”: “It would be better to stay in office to mitigate representations to the government to secure additional finances if the situation makes it possible” (i.e. if Liverpool kept “within the law”). John Hamilton replied to Kinnock saying that the consequences of big cuts would be catastrophic in Liverpool. He pointed out that the breakdown of social order was just below the surface.

Kinnock was asking the Liverpool councilors to remain within the framework of the law, although the Labour leadership had backed the trade unions in calling for the defiance of Tory laws on the issue of GCHQ. He was saying that Liverpool could not win. After the 1981 riots the government had coughed up £20 million – why, therefore, could not the government be persuaded to find the money in this case, asked John Hamilton. They also questioned why the Parliamentary Labour Party had not had a much fuller debate in Parliament on the issue. Why was it left to David Alton to initiate a debate on Liverpool in Parliament?

Kinnock’s silence was eloquent testimony to the fact that the Labour leadership did not want the issue to be aired in Parliament at all for fear of revealing what their real program for Liverpool was. Peter Lennard, then Chairman of the Liverpool GMBATU local authority conveners, pointed out how his members had actively supported the election of a Labour council. They would, he said, totally oppose all cuts. If Labour betrayed its policies it would not be returned in the 1984 elections.

Tony Mulhearn further pointed out that the stand of the Upper Clyde Shipbuilding workers in 1971 had forced the Tory government into a U-turn, eventually paying out £25 million “to avert social disorder”. A mass movement in Liverpool, particularly if it was backed by the full might of the labor and trade-union movement nationally, was a parallel situation. Kinnock for his part denied that there were any parallels with Upper Clyde, Clay Cross or the struggle of the Poplar councilors in the early 1920s.

When pressed by Terry Harrison as to whether the Labour leadership were telling Liverpool to make cuts, Neil Kinnock replied that he was not saying that workers should be sacked, nor was he washing his hands of Liverpool. But then he was asked if he would come to Liverpool to examine the problems he declined, saying that this would be “pointless”. The attitude of the national Labour leadership was quite clear: like the government, they were hoping for a split in the council which would avert the acceptance of an “illegal deficit budget”. Kinnock was just not telling the whole truth when he said that he was not in favor of cuts. Following Jack Straw’s visit to the city in February, his office had produced an alternative budget which suggested a 60 percent rise in rates. Later Kinnock was to deny that such a proposal was ever made, but local government spokesmen, John Cunningham and Jack Straw, had mentioned this figure from a number of platforms.

Quite apart from the effect on homeowners, the majority of whom are working class in Liverpool, the effect of a 60 percent increase would have been devastating for local businesses. Replying to speculation about such an increase, one of the biggest stores in Liverpool, Lewis’s, issued a statement: “Inevitably we would be forced to do the very thing the council is trying to avoid and shed labor.”

The net result of a 60 percent increase, even when moderated by the county council structure of a 50 percent rate rise for householders and a 45 percent rate increase for local businesses, would have wiped out the jobs of shopworkers employed in the private sector. Ironically, one of the “sensible seven” was Bill Snell, a full-time official of the shopworkers’ union!

The national Labour leadership were being ground between the millstones of an intransigent government and an implacable working class in Liverpool. Success in the class war is not guaranteed by a correct program or perspectives, although this of course is decisive. But without the will to see the program through, success will never be achieved. The perspectives of the Marxists have been vindicated on many occasions. In Liverpool their will was also being tested as they led a mass movement, seeking to compel the government with its panoply of powers to retreat. What is more, they were without the support of the leaders of the Labour Party.

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