Cuts privatisation and resistance

Neoliberalism and the local state 1974 to 1987cuts-privatisation-and-resistance-neo-liberalism-and-the-local-state-1974-to-1987

David E Lowes,

Published Merlin Press, 2012,

RRP £15.95; ISBN. 9780850366334

Reviewed by Fred Leplat

The local state, or councils as it is popularly known, is the first contact everybody has with the state. It is the place where births and deaths are registered, it cleans the streets and empties your rubbish bins, provides primary and secondary education, delivers social services, and controls building construction and developments. The list is, or at least used to be, huge. In many places it plays a important role in being the largest employer following the de-industrialisation of the end of the 20th century. The most recent attacks on councils by the Tory-LibDem coalition will cut back budgets by approximately 30% by 2015, a much greater proportion than other public services. With the biggest council departments such as education and housing reduced to a rump through the spread of academies and the transfer of housing to “registered social landlords”, local authorities in a few years time will only provide social services, street cleansing and refuse collection.

This book, with its distinctive cover of a Coalition of Resistance banner on a demonstration, is a very useful examination of the resistance against earlier phases of the attack on local authorities, in particular that which occurred between the early 70s and 1985. The study of nature of the attacks over a period of 20 is a useful tool in explaining where we are at now in local government. But even more interesting is the record of the level of struggle by trade-unions, community organisations and the Labour Party, the later particularly at local level.

There were several waves of attacks during that period aimed at both controlling the relative freedom of councils to deliver services and at cutting back the overall level of spending. David Lowes asks “to what extent were the extensions in welfare provision part of a process designed to minimise the disruption of private sector provision, while containing rank-and-file demands for greater access to political power?” From the mid-60s to the mid-70s, local authorities acquired new and expanded provisions in particular relating to welfare services and infrastructure. The expectations and militancy of the working class in Britain and elsewhere across Europe following the Second World War was certainly a major factor in the creation of the NHS and the “Welfare State” in general.

With Britain, unlike other major western European country, electing a social-democratic government after the war, alarm bells started ringing in the ears of the ruling class. But the massive expansion of public services was not just a concession to increased working class militancy and expectation. The United States came out of the war strengthened, and poured money into Europe with the Marshall plan to rebuild infrastructure and manufacturing. But the Marshall plan also raised the standard of living of the working class so that it could purchase the consumer goods, from cars to household appliances, that were rolling off the production lines. This is what led to the creation of the welfare state, such as the NHS, which was considered as part of the “social wage” and contributed to the three decades of growth which came to a halt in the early 1970s. Indeed, David Lowes argues that “regardless of any perception to the contrary, the welfare functions of the local state were premised on a Keynesian political economy that was designed to facilitate capital accumulation and profit maximisation. By choosing this business model, the leadership of the labour movement had, in effect, subscribed to a fundamental acceptance of the existing economic arrangements and relations in post-war society; albeit with ameliorative elements”.

Local authorities were given a relative legitimacy beyond just the election of councillors, with their ability within limits to raise, collect and spend finance on services for their area. They were able to do this through the system of rates and supplementary levies. Although there were minimum legal standards of services to be provided in certain areas, councils had the power provide additional or a higher standard of services claiming the authority of a mandate gained through elections.

With the election of the Conservative Party to government in 1970, the move began to roll back local government services and democracy, and this continues to this day. One of the first measures was the Housing Finance Act of 1972 which reduced housing subsidies to councils and forced them to increase rents by £1 a week. Up until then, the level of rents had been largely determined by the local council with little interference from central government. Initially, there was widespread opposition with 74 out of 87 Labour groups refusing to implement the Act. Thirty two labour groups held out until the end of 1972, but eventually Clay Cross was one of the last which carried on refusing implementation. The battle was lost when the constituency Labour party barred eleven councillors from its list of approved candidates and the District Auditor also ordered the eleven councillors to pay a surcharge of £635 each in January 1973, finding them “guilty of negligence and misconduct”. Clay Cross councillors were able to stand firm for such a long time against both the Tory government and the Labour Party NEC because of its strong links with local unions and residents, as well as a disciplined Labour group of councillors answerable to the local party. Under the 1970-1974 Tory government of Ted Heath, similar attacks continued with reduction of subsidies and increases in fares for local transport.

The return of Labour in 1974 provided little respite.  The economic crisis of 1976, marking the end of the post-war boom, was also the moment for the Labour party under Callaghan to dump even token references to Keynesian policies, embrace monetarism and David Lowes argues neoliberalism. While negotiating an IMF loan of £1billion, Callaghan said that the time of full employment was over and that it was necessary to go “back to basics”, i.e. not tax and spend but austerity. The result of the Labour government acceptance of the IMF loan and its conditions were massive cuts in local government. According to David Lowes “the full impact meant that local government spending fell from as a proportion of GDP…between 1976 and 1978 from 17 percent to 13 percent…”. This set the scene for a dramatic rise in unemployment and a massive confrontation with trade-unions from 1976 till the “winter of discontent of 1978-9” and the return of the Tories under Thatcher in 1979. What is remarkable about that mobilisation is the scope of the open opposition both within and outside the Labour party against the then Labour government in contrast to the situation today. David Lowes provides a very useful description of the National Steering Committee Against the Cuts by national unions such as ASTMS, COHSE, CPSA, NALGO, NATFHE, NUPE, NUT, which organised strikes, stoppages, demonstrations lobbies and days of action against the Labour government. This defiance culminated in the winter of discontent with 29 million working days were lost to industrial action involving 4.6 million workers, compared to the 1.4 million lost last year, the highest since 1990. The high level of militancy is explained by David Lowes by the rise of the shop-stewards system in unions such as NALGO, the continuing radicalisation of the post-war years until 1968, as well as the relative political independence of local trade-unions and local Labour parties. Despite at a national level accepting a Social Contract with the Labour government, the leaders of national unions could not stop all strikes. Today’s lack of industrial action is not just the legacy of the defeat of the miners under the Thatcher government, or the imposition of the anti-union laws, but it is also the political subservience of many unions to Labour.

Cuts, Privatisation and Resistance also looks at the period of the 1980s with the battles over rate-capping and the GLC’s Fares Fair. Rate-capping, overlapping with the miners’ strike, was yet another measure to reduce and control council spending by central government. Like Clay Cross, the initial resistance was widespread but in the end only Liverpool and Lambeth councils stood firm. But isolated and defeated, the councillors were surcharged. The initial cuts by the Thatcher government were met by some Labour councils with big rates rises to maintain services, which David Lowes correctly describes as very divisive. He also describes how in that period, to avoid government sanctions, councils went for “creative accounting” to maintain spending, which postponed the day the funding gap had to be met, and which he rightly characterizes as a substitute for a mass campaign of opposition. The court decision to prevent the Labour GLC from carrying its cheap fare policy, Fares Fair, upon which it was elected, was yet another measure to reduce the autonomy of local government.

Being under 200 pages, the book does not unfortunately dwell on the fight against the Poll Tax in 1990. Nor does the book provide sufficient general context in which the struggle in local government unfolded. There is little reference to major industrial disputes such as the miners’ strike, outside of local government or of the witch hunt in the Labour party. Such a context would have provided a better understanding of the dynamic of the struggle in local government during that period. It is nevertheless a necessary read for anyone who wants to have an understanding on the background to the battles over local services. Successive Labour and Conservative governments through political attacks, cuts and privatisation have transformed local government into simply local administration. The dramatic example of that being today the London Borough of Barnet,  which is in the process of signing a contract for the running of over 70% of its services by Capita for a 10 year contract worth £1billion!


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