Britain: Council cuts and the Corbyn campaign

Potential to resist if follow 80’s Liverpool Council example

Jeremy Corbyn launched his Labour leadership bid to be ‘the start of a movement against austerity’ and has said that councils could be an important focus of resistance. Clive Heemskerk argues that how the struggle against council cuts unfolds in the coming months will provide an early measure of the impact of the Corbyn insurgency.

Despite having won May’s general election with the backing of the lowest share of the electorate – 24.4% – of any Tory government since universal (male) suffrage was introduced in 1918, Cameron and co are determined to push ahead with their austerity agenda.

The strength of the government will ultimately be measured not by its limited electoral support, however, but by how organised the opposition to it becomes. The central vehicle for resistance should be the trade unions which, with over six million members, are still potentially the most powerful force in society. The Tories’ Trade Union Bill proposals to further attack the right to organise are recognition of that. A youth revolt is inevitable too, with young people feeling the sharpest edge of the austerity axe. The anger has already found some outlet in the support among young people for Jeremy Corbyn’s leadership challenge.

Also likely is an explosion of working-class community campaigns against particular aspects of the cuts which, as local government in many cases is the implementing agency, will put councils in the frontline. Central government funding of local council spending has been cut by 37% from 2010 to 2015, according to the National Audit Office, with the prospect of another 25% to 40% cut over the next four years to be announced in the November Public Spending Review. Even Labour ultra-right wingers like Newcastle’s council leader Nick Forbes have spoken of "the embers of unrest starting to smoulder" with this scale of cuts (The Guardian, 25 November 2014), while proposing to do nothing to resist them.

Local councils, however, could actually become a rallying focus for opposition. Jeremy Corbyn, in his Labour leadership challenge, has rightly made the call for councils to stand together and refuse to implement government cuts. In the mass meetings around his campaign there has been enthusiasm for the idea of elected representatives who will simply not vote for austerity, starting with the council budget-making meetings that will take place in February and March 2016.

A new situation

Nonetheless, the prospect of whole councils with the current Labour councillors in majority control being pushed into such a struggle is remote, even if Jeremy Corbyn wins the leadership election. The report of his call for councils to fight carried in the Liverpool Echo (9 July) drew the posted comment, "not sure that council officers on six-figure salaries and hordes of elected members queuing up to collect their allowances would have the necessary backbone to do what’s required". There has not been a challenge to central government by local councils for over twenty years, as the Labour Party was transformed into New Labour.

Previously, when the Labour Party was a ‘capitalist workers’ party’ (with pro-capitalist leaders but with democratic structures that allowed the working class to fight for its interests), it had the potential to act at least as a check on the capitalists, including from its base in local government. The dangerous consequences for the ruling class of radicalising the organised working-class core of the party as it was then composed was always a factor it had to take into account. But the Labour Party as it has been reconstituted ideologically and organisationally in the past two decades will not generate the type of defiance conducted under its banner in the past: from the Poplar councillors in the 1920s, the Clay Cross councillors in the 1970s, to the Liverpool and Lambeth struggles in the 1980s.

Councillors in particular were consciously developed under New Labour as a caste, with the promotion of directly-elected mayors, ‘executive cabinets’, and ever-more generous allowances giving even ‘backbenchers’ a material interest in keeping their position, insulated from working-class communities and trade unions. Jeremy Corbyn has the prospect of winning the leadership election – in a US-primary style contest ironically introduced to cement the transformation of Labour – because his anti-austerity candidacy has attracted forces over the heads of and outside the ossified structures of the party. If victorious he will face hostile opposition – including a split or a ‘counter-coup’ – not only from the Parliamentary Labour Party but also from the overwhelming majority of Labour councillors.

Nevertheless, over 400 Labour councillors have endorsed Jeremy Corbyn’s leadership bid. While there are more than 7,000 Labour councillors in total, and many Corbyn backers are not in Labour-controlled councils (making it easier to be verbally ‘anti-austerity’), this is still a contrast to 2010 when the heir of Blair, David Miliband, secured the backing of over a thousand councillors. The squeeze on local government has been so great that even a cossetted caste can begin to crack. "What will happen when Labour councils have to set budgets imposing 40% cuts?", the Guardian columnist and Blairite apologist Polly Toynbee fearfully asks. Is it possible that some councillors, "encouraged by Corbyn, demand illegal budgets – as in Liverpool and Clay Cross?" (The Guardian, 4 August). A new situation is opening up.

The essence of Jeremy Corbyn’s appeal is correct; councils do have the power to resist. A councillors’ revolt could stop the cuts. Even just a minority of councillors – the ‘Corbyn councillors’ – breaking from the cuts consensus could become catalysts in building a movement that turns back the government with no mandate. Councils are still an alternative power and the struggle around council budgets – and local election contests starting in 2016 – will be important battlegrounds for the anti-austerity movement that has found new life through the Corbyn campaign.

Councils still an alternative power

Modern local government first emerged in the 19th century, beginning with the 1835 Municipal Corporation Act, as a site of struggle between the developing and newly enfranchised industrial and commercial capitalist class and the old aristocratic ruling elite. The rise of the labour movement added a new dimension with, for example, trades councils standing candidates for the school boards established under the 1870 Education Act, Britain’s first elected independent working-class political representatives. The rise of the Labour Party in the first decades of the 20th century further consolidated the growth of the ‘local state’.

Some public services were ‘nationalised’ from local control in the post-world war two economic upswing. Electricity generation, which in the early 20th century included 370 municipal power-providers, was nationalised by the 1945-51 Labour government, until its privatisation in the 1980s. The NHS replaced variegated local health provisions with a national service (see NHS: The Real History, Socialism Today No.120, July-August 2008). But local government services still remained an important component of the ‘social wage’.

The end of the post-war upswing, however, brought a shift in the attitude of the ruling class. The Housing Finance Act introduced by Ted Heath’s 1970-74 Tory government, reducing council housing subsidy and imposing ‘fair’ rents nearer to the private sector, represented an early erosion of the housing pillar of the post-war welfare state which had undermined the private-rented housing market. The 1973 Labour Party conference vote, against the leadership, for "all penalties, financial and otherwise" to "be removed retrospectively from councillors who have courageously refused to implement the Housing Finance Act", should be a pointer for Jeremy Corbyn’s campaign today!

Margaret Thatcher continued the onslaught, abolishing the Metropolitan County Councils and the Greater London Council (GLC) and stripping councils of direct funding responsibility for many different services, with the Tories enacting over 120 items of anti-local government legislation from 1979. Thatcher famously said, "I must take more power to the centre to stop socialism" – in other words, that public services that ‘crowded out’ the private sector should be curbed or, where they continued to exist, should be opened up to private companies to make profits from public needs. New Labour continued this process throughout its thirteen years in office – the turnover of private companies running public services was, by 2008, 126% higher than 1995-96 under the previous Tory government.

Despite this, councils still retain enormous powers and responsibilities. Councils in England control budgets totalling £114 billion – spent on services from housing to schools, youth provision, adult social care, libraries, museums, crime reduction, local welfare assistance, Sure Start centres, sports centres, parks, transport, highways maintenance, recycling and refuse collection, etc – and have legal powers over many non-council provided services.

They also have a not widely acknowledged residual democratic ‘legitimacy’, with polls consistently showing – for example, the government’s own Citizenship Survey – that trust in local councils is almost twice as high as trust in parliament. A 2014 IPPR Future of England survey found that 39% of people thought councils should have more powers, compared to 14% who thought their powers should be reduced (The Guardian, 16 April 2014). A separate ICM poll found 57% saying that councils "should keep responsibilities in relation to schools", compared to 32% saying schools should "cut free of local councils".

Councils are in a powerful position to fight back. It is just not true, as the big majority of Labour councillors try to suggest, that there is ‘nothing they can do’ but implement the cuts.

Potential to resist

In her leadership hustings speeches Yvette Cooper has been telling of a constituent facing £2,000 arrears as a result of the bedroom tax, which Labour pledged to abolish in May’s general election. The pledge "has gone unmet", Cooper says, and "only Labour in government can offer real respite to that constituent and millions like her" (The Guardian, 13 August). This is the very definition of crocodile tears. Cooper’s constituency is in Labour-controlled Wakefield council. Why doesn’t Labour simply declare that councils it controls will refuse to evict tenants who fall into arrears as a result of the bedroom tax? And that once in power nationally, it will reimburse councils which take such a stand?

In 2014 the Trade Unionist and Socialist Coalition (TUSC), in which the Socialist Party plays a leading role, prepared a supplementary manifesto of policies, alongside its core no cuts platform, that councils had the legal powers to implement immediately without needing new legislation. This was proven by the fact that at least one council somewhere in Britain had implemented at least one of the policies in some form (albeit invariably while making cuts in other services).

The policies were: maintaining full council tax benefits; free school meals for every primary school pupil; local replacements for the Education Maintenance Allowance (EMA) for 16-18 year-olds staying on in education; reinstating childcare provision in Sure Start centres; blocking enforced academisation of schools by refusing to issue ‘warning notices’; compulsorily registering private landlords and establishing council-run lettings agencies; using councils’ borrowing powers for capital spending to build council homes; ending ‘15-minute maximum’ visiting slots, zero-hour contracts, and unpaid travel time for home care workers; and introducing the Living Wage for council employees and those working for council contractors.

It is not a question of legal powers – the Con-Dem’s 2011 Localism Act gave local authorities a ‘power of competence’ to do "anything apart from that which is specifically prohibited". It is a question of political will, as in the bedroom tax example, including a preparedness to go outside the council chamber to mobilise support.

Councils also have more financial powers, and room for manoeuvre, than is claimed by apologists for Labour councils implementing cuts. Councillors who are prepared to resist austerity can use councils’ reserves and ‘prudential borrowing’ powers to avoid passing on government cuts, as a first step in organising a mass campaign of opposition. Such a policy is completely within a council’s legal powers. Council finance officers can challenge a budget they believe to be ‘knowingly unbalanced’, in other words, a planned deficit. But the use of reserves to meet projected deficits, finance debt repayments, etc, is legally a ‘matter of judgement’ for councillors to make.

Between 2010-11 and 2013-14, according to the National Audit Office, councils increased their ‘unallocated reserves’ by 16% in real terms. Rebel councillors advised by TUSC have presented legally compliant no cuts budgets based on the use of these powers in Southampton, Hull and Leicester, but on each occasion they were rejected by the majority Labour groups. The ‘Corbyn councillors’, however they have voted in the past, should immediately declare that they will no longer vote for cuts on the grounds that ‘they have no choice’.

It is true that councils using their reserves and borrowing powers to avoid making cuts would only be buying time before they faced an inevitable showdown with the government for extra resources. There is, ultimately, no ‘clever tactic’ that can avoid the need to build a mass campaign against the cuts.

That is why the best way that councillors can contribute to mobilising the mass campaign necessary to defeat the cuts is to argue for budgets that meet the needs of their local communities, without massive council tax hikes, and to call for councils to combine together to demand that the government makes up the funding shortfall. That is the ‘Liverpool model’ which in 1984 enabled the city’s Labour council, led by Militant supporters, the predecessor of the Socialist Party, to compel Thatcher’s government to concede extra resources to the city worth up to £60 million (£98 million today).

The campaign in support of a Liverpool ‘needs budget’ began even before Labour won a majority on the council in 1983. Then, a 25,000-strong demonstration was organised in November 1983 and the budget meeting itself, in March 1984, took place against the backdrop of a city-wide one-day strike and a 50,000-strong march to the town hall. The anti-austerity movement is in a new situation, both finding expression in the Corbyn insurgency and given confidence by it, but the momentum of his campaign must be used to prepare the ground now, as the Liverpool councillors prepared for their battle in 1984.

Won’t the government always prevail?

There is, of course, no guarantee in any struggle. The overwhelming majority of Labour councillors are still creatures of the Blairite transformation of the Labour Party, indistinguishable from the Tories in their pro-market policies and outlook. But even those who sincerely want to oppose the cuts still hesitate before the Liverpool road. Eventually, having defied the government for four years and won lasting gains for the city, the Liverpool councillors were surcharged and dismissed from office in March 1987.

The law has changed since the 1980s. The 2000 Local Government Act abolished the power of surcharge except for cases of personal gain, for example. The Audit Commission previously appointed district auditors. It has now been abolished – in a purge of ‘quangos’ – so councils will be in a similar ‘self-appointing’ position to NHS Foundation Trusts, where very few ‘public interest reports’ are published by accountancy companies seeking to retain their audit contract. Meanwhile, the restrictions on councils’ ability to dismiss obstructive senior officers ‘for political reasons’, introduced after the 1980s struggles, have been repealed.

In general, after the 1990s transformation of the Labour Party, the ruling class was quite prepared to restore powers to local councils effectively stripped of working-class political representation. Their national political representatives, both the New Labour and Con-Dem governments, saw the advantages of ‘devolving the axe’ to councils, under the slogan of ‘localism’. Now, if the Corbyn insurgency can be developed, such complacency could rebound against them.

The government’s reserve powers to appoint commissioners to take over particular council functions remain, although only after a legal process, and have been deployed, for example against Doncaster council’s children’s social services in 2013 and this year against Rotherham council. But moving against a council ‘not fit to handle child sexual exploitation’, as in Rotherham, is one thing. Deploying commissioners to take over a council mobilising popular support against the cuts – which had the backing of the new Leader of the Opposition! – would be far more problematic.

Also important in this discussion is the need to rescue the actual course of events in Liverpool from right-wing myth-making, which has been revived during the Labour leadership campaign. It was not the setting of a deficit needs budget, Polly Toynbee’s "illegal budget" claim, which the councillors were surcharged for. On the contrary, it was the decision to delay setting a rate at all (rates were the local tax levy then), that was used as the legal pretext to charge the councillors with ‘wilfully incurring financial loss’ to the city.

The ‘no rate’ strategy was decided on by the leaders of twenty Labour councils, including Ken Livingstone, then head of the GLC and now a prominent Corbyn supporter. It was not supported by the Liverpool councillors, who argued that it would not be widely understood – and open to the charge of ‘gesture politics’ – compared to a deficit ‘needs budget’ which showed clearly how much the council required to fund services. Nevertheless, to keep a united front, Liverpool went along with the tactic. Ironically, the other councils – except for Lambeth – soon backed down to leave Liverpool to fight alone. Nobody today, however, is advocating that councils do not set a council tax rate; Ken Livingstone, unfortunately, does not even recommend that councils refuse to implement the cuts.

It was also significant that the Liverpool councillors were only taken on by the district auditor in 1985 and not in 1984, when they had also delayed setting a rate (as some Labour defections meant no party had been able to get a majority for its budget in the council chamber). It was only when the mass campaign had ebbed – not in Liverpool but elsewhere – after the miners had been defeated, the other Labour councils had capitulated, and the Labour leader Neil Kinnock had launched his infamous Labour Party conference speech attack on Liverpool, that the Thatcher government felt confident enough to ‘apply the law’.

The Corbyn insurgency has opened up a completely new situation in Britain. How that can be developed into the local government battleground in the months ahead will be an important test of its lasting impact.

The Corbyn insurgency and 2016 elections

A Jeremy Corbyn victory will be the trigger for a civil war – maybe low intensity at first, dependent on the scale of his vote, but ferocious nonetheless – within the Parliamentary Labour Party, Labour council groups across the country, and the Labour Party machine. It will be necessary to mobilise the maximum possible forces from across the workers’ movement, the young Corbyn supporters, etc, to take on what are, in essence, the forces of capitalism who have organised themselves within the Labour Party. The Corbyn anti-austerity insurgency will need an electoral wing – and in many cases, probably the majority, it will not be the ‘Labour’ candidate that provides it next May.

Elections will take place on Thursday 5 May 2016 for the Scottish parliament, the national assembly for Wales, and the Greater London Authority (the mayor and the assembly). At the same time, around 2,300 councillors will be elected in 128 local authorities in England, nearly half of which are Labour-controlled. There are also mayoral elections in Bristol, Liverpool and Salford.

If Jeremy Corbyn is not the Labour Party leader it is clear that Labour councillors who refuse to commit to voting against cuts in the council chamber should be opposed at the ballot box. TUSC, an electoral coalition open to all anti-austerity fighters, having polled over 300,000 votes since its formation in 2010, is best placed to be the vehicle for that and preparations must begin now for a powerful intervention in the 2016 local elections on a clear programme of councils defying the government and refusing to implement the cuts. TUSC is also drawing up plans to contest the Scotland, Wales and London elections. But even if Jeremy Corbyn wins, pro-capitalist ‘austerity Labour’ candidates, if they haven’t been removed as candidates by next spring, will also need to be challenged electorally.

Council budget-setting meetings will take place in February or March but councils, and council Labour groups, will be discussing budget planning from the autumn. The first task for local TUSC groups, even where there are not elections in 2016, will be to approach local community campaigns, council unions and the ‘Corbyn councillors’ there may be in their area, to propose the preparation of alternative no cuts budgets.

Last year the two rebel Leicester Independent Councillors Against Cuts, part of the TUSC coalition, hosted a conference to discuss just such a ‘People’s Budget’. This could be replicated everywhere, with the conclusions presented to a full council meeting using the provisions most councils have to hear petitions. Particularly if Jeremy Corbyn is the new leader, councillors who support an anti-austerity position can have no compunction about breaking the local Labour group whip to move an alternative budget in the council itself. Where there are elections due, delegations should be organised to approach every Labour candidate to sign up to the no cuts alternative budget – and TUSC candidates put in place against those who do not.

Some may argue that standing TUSC candidates, even against ‘austerity Labour’ councillors, might ‘undermine Jeremy’s leadership’. But how would supporting ‘Labour’ councillors hostile to Jeremy Corbyn’s anti-austerity policies and prepared to slash local public services help his leadership? Such figures would play a not dissimilar role to those Pasok officials and public representatives who joined Syriza, as it superseded the Greek equivalents of New Labour, but then pushed for it to accept austerity. The Corbyn insurgency caught fire by rejecting the political establishment’s conventional measurements of ‘credibility’ and ‘statesmanship’. It is a simple message to present: politicians who vote for cuts cannot be allowed a free run at the ballot box.

Thatcher’s resignation 25 years ago this November, brought down in the face of mass non-payment of the poll tax, shows that even the seemingly most imposing government can be forced to retreat if it faces a sufficiently powerful mass campaign of opposition. Thatcher’s last government, elected in 1987, won with the support of 32% of the electorate (42% of those who voted), far more on both counts than Cameron. But a mass movement was not only able to remove Thatcher but to force the Tories, within weeks of her downfall, to put an extra £4.3 billion into local government funding (around £7 billion in today’s terms) to finance the abolition of the poll tax.

The Tories’ local government base in urban areas has since been decimated – with literally no councillors to lean on in cities like Liverpool, Manchester, Newcastle, and Sheffield, and just a handful elsewhere (including many London boroughs). Cameron is not Thatcher and is certainly not ‘all-powerful’. The elemental anti-austerity movement that is the Corbyn campaign shows that a new generation is prepared to fight. Councillors who are prepared to join them could play a historic role in the inevitable resistance.

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September 2015