Liverpool city council: The Council That Took On Thatcher

Liverpool 1983-87:

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

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

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!"

Mobilising workers

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

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.

Electoral successes

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

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.

Crucial juncture

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!

Difficult position

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

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

“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.

Mass campaign

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.

District Auditor

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 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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