Liverpool’s Nightmare

Whether the country likes Derek Hatton or not – and thankfully most people don’t – he has a point. Liverpool’s two-year budget campaign, brought to a climax after the recent vote to balance the books, has had a deadly serious side to it. Militant’s primary aim has of course been to use the City’s financial crisis as a massive recruiting drive for the Tendency. But this macabre political jamboree could not have lasted this long had there not been behind it the deeply-felt grievances of tens of thousands of people conscious of the near-collapse of Merseyside’s economy. And what the good old British public may not have realised as they viewed the nightly twistings, turnings and rantings of leading Militants on the TV news was that they were being given a chilling glimpse of their own future. For what has been happening to Liverpool may yet prove to be a mere dress-rehearsal of the fate awaiting most British cities. Part of Liverpool’s importance, then, is that it provides a microcosm of what has been happening to the British economy. The difference is that Liverpool’s decline is occurring at a grotesquely faster rate. The city – and the surrounding area, as in my own constituency of Birkenhead – have been hit by unemployment as if by some kind of Black Death.

Since the advent of this Tory government in 1979, 65,000 of the city’s jobs, one in five, have vanished. In manufacturing alone the total loss of jobs has been 40,000, with the result that Liverpool’s manufacturing industry has been almost halved in the past six years – a rate of decline which is double that suffered by the nation as a whole. Massive redundancies have been enforced in Liverpool’s traditional job markets: sugar refining (which has disappeared completely from the scene), soap-making, ship-repairing, marine engineering, and rope and twine manufacturing. Less predictably, the much-vaunted new in dustries of rubber and synthetic fibre manufacture have already disappeared into the history books. The regular announcement on Friday evenings of impending plant closures has seemed to sound the region’s death knell.

Despite the outward migration of the mobile population – largely the young and the employed – the numbers of unemployed have risen to match this catastrophic decline in manufacturing industry. The official data show that one in every four of the city’s able-bodied residents is now standing in the dole queues: if there is an area where it is impossible to accuse the Government of inaction, it has been in its attempts to present the unemployment figures in the most favourable light – but this is what the official data show. The staggeringly high rate of unemployment is un-evenly spread both throughout the city and across different social groups. Those without work are most likely to live in the inner-city area, or on the outer-city council estates; and, increasingly, the unemployed possess a young face. Over 80 per cent of the 16-18-year-olds not in school are either on a youth-training scheme or are registered as unemployed.

As the dole queues have lengthened so too has the period of time Liverpool citizens spend unemployed. Currently, over 53 per cent of the unemployed have been waiting for a job for over a year. Not only, therefore, has an increased number of citizens been conscripted into unemployment to wage Mrs Thatcher’s war against inflation, but the period of conscription is lengthening. Long-term mass unemployment generates a secondary, equally important decline in the immediate neighbourhoods in which the long-term unemployed live.

The loss of jobs and the duration of unemployment determine both how much families lose in income and how long their poverty lasts. Over half of the city qualifies for housing benefit and the numbers rise to three-quarters for council tenants. More than six out of ten citizens live in areas which are designated by the Council as ‘poor’, compared with only 17 per cent in those designated as owner-occupied and higher-income areas. Significantly, even though the income level for eligibility has fallen in real terms in recent years, the number of children receiving a free midday meal has escalated from 28 per cent in 1981 to over 50 per cent four years later. Between these extremes is an ever-widening gap in living standards. Unemployment is growing fastest in the poorest areas.

Signs of growing poverty are also apparent in housing conditions. The sale of council houses – a policy I welcome – has not been matched by the necessary equivalent increase in the housing budget. Part of the reason for this is the Tory Government’s refusal to allow local authorities to spend freely the capital gained from the sales programme. That these funds would be freely available to add to the housing programme was always one of the twin attractions of a sales policy. (The other attraction was that a policy of this kind helps spread wealth, and the freedom that comes with it, to a widening group of people.) The decline in the house-building programme has also been caused by the Council’s bigoted attitude to housing associations. It is easy to understand why the Council feels so sensitive. The voluntary sector has a truly impressive record of attractive building and rehabilitation programmes throughout the whole region.

It was the attempt to produce homes in which families would want to live which was at the heart of Liverpool City’s current housing programme: I say ‘was’ because the interest payments on the new Swiss debt may take up half of the housing account from next year. The original housing programme has been more successful than any other local authority’s, although not as successful as the Militant propaganda machine maintains. The housing programme has also provided some badly-needed jobs. But however welcome the new homes have been, and the jobs thereby created, the housing programme is not a strategy for reversing Liverpool’s economic decline. At best, it allows for a sizable number of families to be better housed while the process of decline continues.

The Government’s answer to the collapse of part of Liverpool’s economy was formulated in the wake of the Toxteth riots. Michael Heseltine assumed a kind of viceroy role – not inappropriate, given the similarities between part of the local economy and that of the Third World. A task force of civil servants was established, headed, at first, by Eric Sorensen, one of the brightest members of the DOE. But it is a sign of the region’s broken nerve that efforts to secure Sorensen’s secondment to run a local authority or a major business concern in the area – which would have dealt both with local corruption and intellectual paralysis – came to nothing.

Not surprisingly, this laissez-faire government invited the business community to view the area and make suggestions on what it might do. So, as with Booth’s excursions into ‘Darkest England’ in the 1880s, the heads of businesses and of financial institutions were bussed around to view the contrast between the luxury which puts parts of NW3 in the shade and the squalor which blights all too much of our area. Heseltine’s businessmen’s bus helped to establish the Financial Institutions Group, which, before it was disbanded, gave birth to Inner City Enterprises. Unfortunately, this infant seems still-born. The ICE has yet to produce a single project which has managed to attract private-sector finance. The one noticeable success for Heseltine on the employment front was to keep open the Cammell Laird Shipyard in Birkenhead, which draws 60 per cent of its labour from across the river in Liverpool. Local Militants, together with the remnants of a once powerful local Communist Party, hit on the brilliant strategy of attracting new work by closing the Yard. The closure lasted 14 weeks, after which the work-force, bravely taking their future into their own hands, walked back to work through a picket line made up of some of the choicest political riff-raff of the area. The strikers’ policy of physically assaulting those deemed to be blacklegs was put into rapid reverse when they found that the fists of those back at work were of the same size as their own. In a Cabinet meeting that followed this violent resumption of work Heseltine threatened resignation if one of the post-Falkland frigate orders was not awarded to Lairds. On this, he was backed by the Prime Minister.

But one frigate order – no matter how important – does not by itself herald an economic recovery, and it is against the background of continuous economic decline that Liverpool City’s confrontation with the Government must be judged. Michael Parkinson is to be congratulated on the speed and timeliness of his book: but it suffers from two major weaknesses. First, it is far too benevolent towards the Militant Tendency. Second, the review of the city’s economic decline is all too brief and is only partially integrated with the political reporting which follows. Had it not been for the decline described in this review Liverpool’s confrontation with the Government could never have been sustained, nor could it have won the widespread popular support it once commanded in the city.

This grass-roots support for a council which seemed to be standing up to a Tory government has never been fully understood by Labour’s leadership in London. From a Liverpool perspective, recent attacks on Militant have appeared as blanket condemnations of the stand the whole Labour Group was trying to make against the Government. Instead of driving a wedge between the traditional Left and Militant, the Labour Party leadership’s assaults have had the effect of silencing public criticism of the latter. Parkinson describes how the District Labour Party acts as the power base for Militant in the Council, but fails to grasp the importance of Militant’s Leninist-Trotskyite beliefs. The disbanding of the District Party by itself will do little; the Tendency will merely operate from another political base in the City. It is against the ever-present reality of economic decay that Militant has been able to put into effect a policy of democratic centralism backed up by a campaign of political terror against its opponents.

Labour must act decisively against the Tendency by expelling its leading activists. Action of this kind is crucial for at least two reasons. First, Neil Kinnock has to address himself to a national audience. Without a move which ordinary voters will understand, all too many of our would-be supporters will believe that a Labour vote will be a vote for a Hatton-type extremism. The inquiry alone will convince few that Labour is measuring up to the task. The Militant Tendency needs to be warmly shaken by the throat by the national party. Nothing less will do. Second, any action must also be viewed with at least one eye to the local scene. It is a measure of the viciousness of the local campaign that, with a few brave exceptions, no one of any political standing in Liverpool has yet had the courage to stand up to Militant, and the party is in no shape to fight next year’s local elections. Without expulsions a regrouping of the Left simply will not occur; it certainly won’t be engineered by press releases from the national party.

Labour desperately needs to present a credible alternative to the Liverpool Liberal Party, which has caused more than its fair share of Liverpool’s underlying problems, and the city itself needs the chance to turn its back on the political thuggery of the past decade or so. The Government’s own responsibility must be highlighted here. Not only has the city suffered a massive cut in its grant income (about half the level the Militant Tendency claims), but the failure of Mrs Thatcher’s economic policy is nowhere more evident than on Merseyside.

An expulsion of prominent Militants – along with Tony Byrne, who has masterminded much of the ‘city-into-chaos’ strategy – would allow the local politicians to begin presenting Liverpool’s case to the electorate and to central government. It would also allow the whole Labour Party to draw the appropriate lessons from this sorry saga. Two of these lessons stand out. First, a government committed to employment, rather than exclusively concerned with controlling inflation, would help to enliven Merseyside’s economy but would not on its own make a major impact on its unemployment rate. Attempts to bribe private enterprise to move have worked in the past, but many of these moves were of a transitory nature. A government nerved to combat regional inequalities would embark again on a major programme of Civil Service dispersal. This would not necessarily lead immediately to many new vacancies in government employment, but a major influx of government jobs would begin to transform the local economy, the amount spent, the attractiveness of the shops, and the range of services provided. This policy might in itself begin to attract private-sector companies, and would be more effective than direct grants. There is also an urgent need to reform local-government finance to reverse the transfer of resources from the inner city to the shire counties which has occurred since 1979.

The second conclusion to draw from Liverpool’s recent nightmare relates to the behaviour of Labour Party activists. It is easy enough now for the soft Left in general to climb on the bandwagon of the attack on Militant, but precious few of them were prepared to admit they were in the vicinity, let alone put their heads above the parapet, when Labour Party loyalists were fighting, for example, to prevent Militant destroying the party in Birkenhead. But ‘I told you so’ festivities must not get in the way of one central fact. The campaign which led Militant cynically to sack its 31,000 work-force could never have got under way if the majority of Labour councillors, who actually opposed this move, had spoken out and voted accordingly. The non-Militant majority closed their eyes, sealed their mouths and sat tightly on their hands during those council debates and votes, as Militant set out its strategy for plunging the city into chaos. At a time when they needed to defy the District Labour Party’s instructions on how to vote, these councillors put party loyalty as defined by the District Party above what they knew to be the right course of action in the interests of the people they represent.

Political parties, and other organisations too, are liable to suffer what would be defined in human beings as sustained fits of madness. Such derangements are assisted by the Labour Party’s whipping system and strident appeals to loyalty, which can only be challenged by the willingness of individuals to buck the system and refuse to vote against what than own sense of decency and democracy dictate This is as easy to say as it is difficult to do. But it is a lesson which needs to be grasped well beyond Liverpool. In particular, the national Labour Party must now learn it.