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
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
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
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'
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
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
We showed that it's possible to weld together a
very broad mass movement behind the fighting slogans and methods of