What we think
Forty years ago, a left Labour council was elected in Liverpool. Militant supporters (now the Socialist Party) played a key role. The lessons of the epic struggle that took place over the following four years are more relevant today than ever before.
The Liverpool councillors were faced with a Tory government led by the ‘Iron Lady’: Maggie Thatcher. The councillors adopted the slogan of the famous jailed Poplar councillors from over sixty years earlier – ‘better to break the law than break the poor’- and led a mass campaign for the return to Liverpool of the £30 million of central government funding that had been slashed over the previous five years.
Just over a year later, in July 1984, the Tory government was forced to hand over the £30 million. The right-wing press foamed at the mouth. The Daily Mail attacked Tory Environment Secretary Patrick Jenkin, declaring: “The Trotskyites and others of the hard left who run Liverpool have had the best of the fight with him in their threat to defy the law on that city’s overspending.” The Express joined in: “Patrick Jenkin seems to have bought himself some peace from the Militant-led Liverpool City council. This is a shoddy and cowardly deal… Mr Jenkin has shown that defiance pays.”
Mass struggle
While the capitalist press gnashed their teeth, there was jubilation in Liverpool when the councillors reported back to a 600-strong meeting of the District Labour Party. However, it was not the councillors’ skill at negotiating with Tory ministers which was key to the victory, but rather the mass struggle that they led. In March 1984 a one-day strike took place, supported by 30,000 local authority workers. More than 50,000 people marched through the city that day in support of the council’s proposed ‘deficit budget’.
The money won from the government enabled the council to carry out its electoral programme, including the building of 5,000 council houses, the opening of six new sports centres, and the creation of 2,000 jobs on trade union rates of pay. As a result of those achievements the Labour vote surged to record highs in the city.
The Tories and the capitalist class were eventually able to defeat the fighting Liverpool councillors as a result of the rotten role played by right-wing Labour leader Neil Kinnock, combined with the retreat of other left Labour councils which left Liverpool isolated. Nonetheless, the achievements of the council remain in bricks and mortar, and the lessons of the struggle are more relevant than ever today, when Birmingham has become the seventh council since 2020 to issue a Section 114 notice, effectively declaring itself ‘bankrupt’.
Bankruptcy?
A council cannot go bankrupt in the way that a private business can. Only an act of parliament can dissolve a local authority. Nonetheless, issuing a 114 notice means stopping all new expenditure. Other councils that have issued 114 notices have gone on to make savage cuts to services, huge job losses, and to carry out major council tax hikes. A 114 notice can also open the road to the government appointing commissioners, after a parliamentary vote, to take over aspects of the council if the councillors do not agree to sufficiently savage cuts. Birmingham is not going to be the last to take route 114. At least 26 more councils are reported to be near to doing so.
Throughout the last thirteen years, local authorities have been cynically used by Tory-led governments to deliver austerity policies. Between 2010 and 2017, grant funding to local authorities was halved, with the poorest – and predominantly Labour – areas hit hardest. Although the squeeze then lessened, grant funding was still almost a third less in 2021 than it was in 2009. Throughout those thirteen years, the Socialist Party has urged councillors to take the Liverpool road and stand up and fight for the working-class communities they represent by refusing to implement Tory austerity. We have pointed to the potential power of Labour local authorities. For example, their combined budgets are larger than the state budgets of 16 EU countries! Again and again, Labour councillors have responded by arguing that, whereas Poplar and Liverpool could fight the cuts in the 1920s and the 1980s, today councils do not have the power to do so.
This is nonsense! Actually, from a purely formal legal point of view, things are easier. There is no prospect now of imprisonment, as the Poplar councillors faced in 1921. Similarly, the power of surcharge, which was inflicted on the Liverpool and Lambeth councillors in the 1980s, has been abolished, except for cases of personal gain. But what enabled Poplar and Liverpool to win improvements was not primarily a legal question. They won because of the power of the movement of working-class people that they mobilised.
Any council today that took the Liverpool road would get an equally enthusiastic response from its electorate. But can anyone imagine 50,000 people marching through the streets of Birmingham in support of the current crop of councillors? Of course not, because instead of fighting for Brummies, the Labour councillors have carried out the bidding of the Tory government and implemented austerity.
Labour councils have consistently taken the approach recommended by Kinnock, the so-called ‘dented shield strategy’ of Labour councils obeying Tory governments in the hope of protecting their populations from the worst of the Tory cuts. It never worked, and over the last thirteen years, as the Tories cut spending on an unprecedented scale, it has taken Labour councils down the road of slashing their workforces’ pay and conditions, and cutting public services until they barely exist. Now it is leading to 114 notices – ironically one of the things they were claiming to be trying to avoid when they obeyed the Tory government and cut workers’ jobs and services.
Not too late
Even now, however, it is not too late for councils to take a stand. The specific reason that Birmingham council has given for issuing the section 114 notice is the cost of a failed IT system and the ongoing cost of paying historic equal pay claims. But both can be legally categorised as capital expenditure, meaning the council is able to borrow in order to fund them. Birmingham, and other councils facing the same problem, should – as Unite the Union calls for – use their reserves and statutory borrowing powers to meet equal pay claims by levelling wages up, not making pay cuts, and to prevent any further cuts to jobs and services.
The general election is going to take place within the next fourteen months, and the Tories are clearly heading for defeat. Sir Keir Starmer has made no promises on how his government will come to the aid of cash-strapped councils. Labour councils should immediately demand that Angela Rayner, the newly appointed shadow levelling-up minister – hailed by the Guardian as the last “left-winger” in the shadow cabinet! – pledges that any that money councils borrow to protect jobs and services will be repaid by an incoming Labour government.
However, if Labour councillors continue to bow down and implement Tory austerity, even as the government enters its dying days, the workers’ movement will need to make sure they are challenged at the ballot box by candidates who are prepared to take the fighting stance adopted in Liverpool four decades ago. Given that Starmer’s New Labour is clearly intending to represent the interests of the capitalist elite, rather than the working-class majority, fighting councillors – in the tradition of Liverpool and Poplar – will be essential under the next government, just as they are desperately needed today.
