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The Council That Took On Thatcher
TWENTY YEARS ago Liverpool city council took on Margaret Thatcher's Tory government and won a famous victory against cuts and privatisation.
The council was led by Marxists around the Militant newspaper, fore-runners of the Socialist Party and then the leading force in Liverpool Labour Party.
This year, council after council have had budget meetings which cut jobs and services or brought in huge council tax rises or both.
LAURENCE COATES, a Militant full-time organiser in Liverpool (1984-1987) explains how a mass movement in Liverpool defied Thatcher's Tories.
IN THE early 1980s, as now, local councils were carrying out cuts, privatisation or raising rates (local taxes) to compensate for Tory reductions in central government grants.
But Liverpool was different. The city council, whose policies, programme and tactics in the struggle were determined by the strength of Militant in Liverpool, refused to carry out cuts demanded by Thatcher's government.
The council Labour group in Liverpool included Labour lefts and even sections of the party right-wing. Militant supporters were always in a minority numerically but our ideas and proposals for action usually carried the day.
Marxists don't advocate deficit financing as a solution to the working class's problems. Our alternative is state ownership and democratic planning of the major companies and banks.
But we argued that Liverpool council should set a deficit budget, one where income would not cover planned expenditure, and then launch a mass campaign to force the government to provide the extra resources.
Reverse 2,000 job cuts
After Labour won the council elections in Liverpool in May 1983 against the national trend, we carried out our election promises. We said we'd reverse 2,000 job cuts pushed through by the previous Liberal-led administration and we did.
The Liberals who'd run the city for ten years had also put a complete freeze on council house-building. We launched an ambitious programme to build 5,000 new homes. This led to 12,000 new jobs in the building industry. Male unemployment in Liverpool was then 25%, with youth unemployment reaching 90% in parts!
We raised council staff's minimum wage to £100 a week (an increase for the 4,000 lowest paid) and cut the working week from 39 to 35 hours without loss of pay. The city council, with over 30,000 workers, was the region's biggest employer. The council trade unions, a decisive part of the struggle, had an unprecedented degree of control, including the right to nominate half the candidates for new jobs.
We compared Liverpool's spectacular reforms, won through struggle, to the record of the reformists leading the Labour Party who'd abandoned any commitment to reform in the working class' interests.
Escape route closed
RIGHT WINGERS claimed Militant drove Liverpool to bankruptcy but that was a lie! The Thatcher government's policies nearly bankrupted Liverpool - her cuts to the grant allocation system meant Liverpool had lost as much as £34 million since 1979.
The government wanted to force locally elected politicians to make big cuts. If Liverpool had followed government orders, our 1984 budget would have been 11% smaller than the 1980-81 budget. It would have meant sacking 6,000 council employees, at a time of sky-high unemployment, to balance the books.
The national Labour leaders opposed Thatcher in words, but told Labour councils to stay within the law. Local councils could be fined and disqualified from office if they wilfully fixed a budget where income didn't balance expenditure. Liverpool's councillors said it's better to break a bad law than to break the poor.
Many Labour councils raised the rates, massively in some cases, to avoid making cuts. We said this was no alternative; it also hits working-class families. Rate rises couldn't compensate for government cash limits; our alternative was to fight for more resources.
Supposed escape route
In 1984 Thatcher closed off this supposed escape route by introducing a new rate-capping law which fined councils if they raised the rates beyond a certain government-set limit. In Liverpool we said that a smaller rate rise, in line with inflation, was OK, as was a rise to finance genuine expansion of council services. But under no conditions should it be done just to fill the hole caused by government cuts.
The city council, particularly Militant supporters like Derek Hatton and Tony Mulhearn, the struggle's main leaders, explained that Thatcher's government had stolen millions of pounds of state grants earmarked for Liverpool and other cities.
"Give us back our £30 million" became the movement's rallying cry. An opinion poll in September 1985 showed that 60% - in a city of half a million - supported the demand for more money from central government. Only 24% disagreed. 74% told the same poll they were prepared to put up with disruption in services like schools, refuse collection etc. if council workers went on strike to support the council.
There was an hysterical scare campaign against the council. More than once Thatcher threatened to suspend local democracy and send in the army! Yet we won the hearts and minds of the city's working class.
Labour's right wing argued that Militant's programme and ideas could never get mass support as our 'extremism' would scare people away. In Liverpool we showed who the real extremists were - Thatcher and those pushing for cuts.
People shrugged off these smears. A letter to the local paper said: "I'm not sure who Leon Trotsky was but he must have been a bricklayer judging from how many houses Liverpool has built!"
MILITANT UNDERSTOOD that the struggle had to move from the council chamber into the streets, workplaces and housing estates. Only by mobilising the working class behind the council could we force Thatcher to give way.
So on budget day, 29 March 1984, we organised a one-day general strike where 50,000 marched on the Town Hall to support the council's stand. The council's strategy - refusing to cut or implement excessive rate rises - enjoyed mass support.
Before the strike and demo came months of campaigning: city-wide mass meetings, factory gate meetings, canvassing and leafleting. Liverpool Labour Party distributed 180,000 copies of its own newspaper before budget day.
Meanwhile Labour's national leaders urged Liverpool to put the rates up (by 60%!) instead of fighting.
Marxists don't consider it possible for one city to win on its own; we took concrete steps to build national and even international support. We had particular success forging links with council unions in other areas, especially London. Representatives from Liverpool addressed meetings around the country. Militant organised many big meetings.
In summer 1984, we won concessions from the government, due in part to the miners' strike which started that March. Thatcher knew she couldn't fight on two fronts and decided to concentrate on the miners.
Won significant concessions
Some left critics attacked us for reaching a deal but the miners themselves saw our victory as a tremendous morale boost. We'd proved Thatcher could be beaten if the working class had a determined leadership and the right tactics.
Having won significant concessions, if we'd simply rejected the offer, Liverpool's workers would have suspected the Tory propaganda was true i.e. that we wanted confrontation at any price.
We showed that it's possible to weld together a very broad mass movement behind the fighting slogans and methods of Marxism.
The Stalinist Communist Party, sniping from the sidelines, claimed that Militant was limiting the movement's scope. They wanted the broad alliance to include the Church, Labour leaders and even sections of the Tory Party! In the end they got their alliance with the Tories and the Labour leaders - against the council, the mass struggle and the gains of 1983-87.
THATCHER COULD not defeat us democratically. We won every election in that period. So the Liverpool 47 - the 47 Labour councillors who took the fight to the very end - had to be removed by a judicial coup in that relic of feudalism, the House of Lords! Over £500,000 in fines and legal costs was imposed on the 47, money raised through collections in the working class movement.
But this coup was only made possible by an alliance between Thatcher and Labour's leaders. While we were fighting the Tories, Labour leader Neil Kinnock launched a second front against us.
Liverpool Labour Party was closed down, then restarted under a police regime. Militant supporters were expelled, barred from standing as candidates and subjected to an unprecedented campaign of slander.
The moves against Militant in Liverpool began a political counter-revolution inside the Labour Party which eventually, under Blair, turned it into an out-and-out capitalist party. When Kinnock and the establishment turned their fire on us, the careerists and Stalinists who opposed us found their courage.
The Stalinists, while numerically tiny in Liverpool, had some important union positions. Instead of mobilising their organisations behind the anti-cuts struggle, they used their positions to attack the council. They played a particularly destructive role in the teachers' union leadership, narrowly getting the teachers to vote against strike action in support of the council in 1985.
This was a crucial juncture in the struggle. By 1985, the miners had been defeated due to the right-wing TUC leaders' scandalous refusal to organise effective solidarity action. Now Thatcher wanted revenge on Liverpool - to extinguish the idea that militancy pays.
In the interests of a united front with 25 other councils against rate-capping we accepted - despite huge reservations - the 'no rate' tactic where councils all agreed not to set a rate as a protest. Liverpool had argued for setting a deficit budget instead, a tactic which could far more easily be explained to the public.
We bent over backwards to reach an agreement for common action with these councils. The united front however fell apart almost immediately, as council after council abandoned the 'no rate' tactic. Liverpool was left to fight alone.
We knew the position wasn't as favourable as it had been a year earlier. At the same time there was no alternative but to fight - apart from cuts!
When our call for an all-out strike of the council workforce was narrowly lost in September 1985, after sabotage by sections of the union hierarchy, we were in a difficult position. Even so, tactics such as dragging things out in the courts kept the 47 in power until March 1987.
This in turn insured that the housing programme, for example, wasn't overturned by the return of the Liberals and Tories. In some ways opponents of our struggle were more taken aback by our tactics in this period of retreat than they were during the movement's ascendancy. Tory minister Michael Heseltine said Militant was the organisation which never sleeps.
Liverpool shows that the working class can defeat a seemingly unstoppable neo-liberal offensive. In decisive battles a clear fighting programme is needed, together with a leadership with roots in the working class, that strives to seriously measure up to the enemy, anticipate its attacks and respond with tactical flexibility.
This means a Marxist party, which is what Militant's successors, the Socialist Party, and our international, the CWI, are building today.
"We Translated Socialism Into The Language Of Jobs, Housing And Services"
TONY MULHEARN, one of the '47' Liverpool councillors from 1983 to 1987, told this year's Socialist Party congress how they defied Thatcher 20 years ago.
"LIVERPOOL SHOWED how Marxists can link directly with working-class people on a clear set of socialist principles. Militant supporters linked up to the aspirations of the working class - a decent job, a decent wage, a decent house, a decent pension - basically what's required to lead a civilised life.
Then we campaigned to meet these aspirations. We translated socialism into the language of jobs, housing, and social services. We were elected in 1983, increased our majority in 1984 on these policies and implemented them.
We started more apprentices in our four years than had been started in the previous 40 years. We built more houses than all other councils in our time in office.
Liverpool council made a gigantic leap in meeting the needs of the working class. So we could mobilise massive support - firstly amongst local authority workers, then the whole working class. We had demonstrations of up to 60,000 people in defence of Liverpool council - this enormous movement solidified the Labour party and the Labour council.
At the time many doubted whether councillors would pass a deficit budget but we were amazed how many, even honest right-wing Labour, councillors stood firm and voted for an illegal budget.
This resulted from the pressure of Liverpool's working class, reflected inside Liverpool District Labour Party, the policy-making body that imposed policy on the Labour group.
We conducted a mass campaign. When Patrick Jenkin, the local government minister, came to Liverpool to see what was going on, we showed him all the city's dreadful housing conditions. This patrician Tory said he hadn't seen housing like that in his life.
He was compelled on that basis to negotiate a deal with us in 1984. We were the only council to get extra funding, £60 million, which allowed us to balance our budget and continue our policies.
Thatcher then came to Liverpool. The Daily Express quoted her as saying: "These people have no respect for my authority" and had to be put down. From then on, the 47 councillors faced calumny in the press.
The District Auditor came to Liverpool. He found no financial irregularities but claimed that, by deferring the setting of the budget for three months, we lost government income which if we'd put it in the bank would have earned interest. He said our actions had lost Liverpool £106,000 - the Tories had taken many millions from the city since 1979!
If the unelected District Auditor, with the powers of a feudal baron, believes you're out of order as a councillor, he can remove you from office. So at a stroke, he removed 47 democratically elected Labour councillors from office.
Our campaign amongst the working class for funds to appeal raised £650,000. We fought all the way to the unelected Law Lords, who declared we were unfit for office and unceremoniously kicked us out. Many of the 47 surcharged and dismissed ex-councillors faced being victimised and losing their jobs.
Who was the liability?
Labour leader Kinnock called Militant an electoral liability. In Liverpool we never lost an election when we were in control and got the highest Labour vote since 1945 despite the city's population having slumped from 700,000 to 450,000. We won with turnouts never seen before - 50%, 55%, even 62% for local elections. Some 'electoral liability'!
After Kinnock's treacherous speech at Bournemouth in 1985, Denis Healey told Kinnock his speech had won Labour the next general election. In the 1987 election Kinnock got the second lowest vote for Labour since 1931.
Labour's right wing used the rule book to change the party. Even right wing Labour councillors claimed in 1988 to be standing on the policies of the 47 and got elected.
But then they embraced neo-liberalism and wrecked the Labour Party. Constituencies were closed down. Labour councillors now total just 20 - the Lib Dems dominate the city. Not one new house has been built for years.
New Labour hardly exists and the years of reaction are only now coming to an end. But if we were in the same position today, we'd do the same and fight for our class. It's what we were elected to do."
Liverpool: A City That Dared To Fight
by Peter Taaffe and Tony Mulhearn
Read online at http://www.socialistparty.org.uk/ liverpool/
The fullest story and lessons of how the Liverpool working class, through their organisations and the council, fought the Tories, judges, right-wing Labour and trade union bureaucrats, to create jobs, maintain services and build houses, nurseries and sports centres.
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In The Socialist 27 March 2004:
Marxist analysis: history
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