Liverpool on the Brink: One City's Struggle Against Government Cuts
Total Page：16
File Type：pdf, Size：1020Kb
LIVERPOOL ON THE BRINK LIVERPOOL ON THE BRINK One city's struggle against Government cuts Michael Parkinson To Joey - 'forever young' © 1985 Michael Parkinson. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) without the prior written permission of the copyright-owner. Enquiries should be addressed to the publishers. Published and distributed by POLICY JOURNALS The Old Vicarage Marlston Road Hermitage Berks RG16 9SU ISBN 0 946967 06 7 (hardback) ISBN 0 946967 07 5 (paperback) Designed by David Cutting Graphics Printed by the Burlington Press, Cambridge CONTENTS Acknowledgments 7 1 The Origins of the Budget Crisis - 1974-1983 9 2 The Opening Round: Liverpool against Whitehall - May 1983 - September 1984 37 3 Labour Vindicated and First Steps to Negotiation - The May 1984 Election 59 4 Liverpool against Whitehall: The Professionals Join In - May-June 1984 79 5 Concessions and Controversy- The July 1984 Settlement 107 6 Money, Politics and Housing: Worsening Conflict -July 1984-May 1985 123 7 Politics and Pressure for the Labour Council -June- September 1985 147 8 Conclusion 175 ACKNOWLEDGMENTS This book tries to discuss in a serious but accessible way, political responses in Liverpool to the city's financial and economic decline. It was difficult to write for several reasons. The story had no obvious beginning, middle or end. Its subject was a moving target. Trying to interpret events as they took place was emotionally draining for someone who lives in, works in and cares for Liverpool. Also local government finance and budgets are very confusing and I needed enormous help from several people even to make sense of the material I have used. I received an extraordinary degree of cooperation from nearly everyone most intimately involved in Liverpool's financial decision-making during the past two years. However, given the controversial nature of those decisions, many of those people will disagree with much I have written. But I have tried to be honest as well as present Liverpool's case fairly. In many respects, I regard this book as a collective effort and should like to thank the following people who, in different ways, helped me understand the present conflict and where it fits into the complexities of Liverpool's politics: Paul Astbury, Gideon Ben-Tovim , Marge Ben Tovim, Mike Black, Graham Burgess, Tony Byrne, David Copley, Peter Cresswell, Peter Dowd, John Farrell, Peter Ferguson, Colin Forrester, Derek Hatton, John Hamilton, John Kenny, Tony Lane, Ian Lowes, Paul Luske, Steve McGriskin, Alan Maher, John Nelson, Roger O'Hara, Andy Pink, Jimmy Rand, Michael Reddington, Vicki Roberts, Dave Robertson, Tony Schorah, Harry Smith, Eric Sorenson, Alfred Stocks, Cyril Taylor, Ian Williams and Chris Williamson. Catherine Meredith first made me appreciate the crucial importance of housing in Liverpool's politics. Geoff Walsh sparked my interest in the subject and led me through ten years of budget records with patience and great good humour. Steve Ferguson read the manuscript and encouraged me especially at an early stage. Professor Mik Laver shared responsibility 8/ ACKNOWLEDGMENTS for the survey of Liverpool voters. My colleagues in the department of politics at Liverpool University provided a supportive intellectual environment for my work. A number of people who in some ways contributed most to this book have asked not to be named. My research on Liverpool politics was originally supported by a grant from the Social Science Research Council. I doubt if this is the book they had in mind. But I shall always be grateful to Professor Mike Goldsmith for his support at that time. Equally, Stephen Wilks showed great tolerance and understanding throughout. Professor Jane Marceau gave me the confidence to start the project. Pat Brooksbank, who struggled with my appalling handwriting and endless revisions, made it possible to complete it. The Reverend Peter Brain was a constant sup porter, who read and commented thoughtfully on every page of the text. If the moral dimension is not evident enough in the book, I apologise to him. Two other people need special mention. They both sensed I had something to say about an important issue and encouraged me to say it. John Gretton was the best possible editor, providing an incisive blend of intellectual support and criticism precisely when each was required. Any merit this book may have is due in large part to him. My primary debt is to a senior colleague at Liverpool University, Professor David Jennings. He took a reassuring interest in my work and provided the continuing moral and financial support, without which this book would never even have been written. I hope it repays his trust. Finally, only those who know Fran realise how much she has contributed by just being there. And Jessica always said you could only do your best work, and then hope. Michael Parkinson Centre for Urban Studies, Liverpool University. October, 1985. THE ORIGINS OF THE BUDGET CRISIS -1974-1983 1 Cities are the creatures of economics. They survive as communities if they can· cope with the vagaries of economic change. Once economic decline sets in, every aspect of their life is threatened. Liverpool is the perfect illustration of that process, for decline has eaten into the city's economy, society and politics. The story began with the port. It made the city great and in the 19th century gave it more millionaires than any other provincial city in Britain. But the port's decline left Liverpool with a legacy that now makes economic survival, let alone recovery, problematic at best. Its fall began with the impact of the 1930s depression upon world trade. But since 1945, changes in the national and international economy have dramatically speeded up the process. And the city has never really recovered its balance. For a brief period during the 1960s, government policies to strengthen its economy promised to arrest the process. But it proved to be a false dawn. Since then, decline has turned into collapse and Liverpool threatens to become the first deindustrialised city in the nation. In the 1980s, the city is economically marooned: it is in the wrong place, based on the wrong kind of economic activity with an outdated infrastructure and an underqualified labour force. It is increasingly a 'branch plant economy' which has become peripheral to the mainstream international capitalist economy. And economic failure has produced a range of social problems in the city as intense and intractable as any in Western Europe. In 1981 tear gas had to be used by police for the first time on the British mainland to put down 'a poor people's revolt' in its inner city. Until quite recently, the city's economic misfortunes did not have a major direct impact upon the health of the municipal economy itself, because high levels of public expenditure and a relatively generous government grant system protected the local authority from the most 10 I THE ORIGINS OF THE BUDGET CRISIS severe financial effects of structural decline. Economic privation was experienced primarily by vulnerable individuals and groups in the community. But cuts in central government support since the mid- 1970s, but especially under the Conservatives in the 1980s, have changed that. The decline in local economic resources has become a much more serious problem for the city because they now have to make a larger contribution to the local authority's income to compensate for the drop in national support. When the Conservatives took power in 1979 central government was providing 62 per cent of the city's net income and the rates over 37 per cent. By 1983 the Government's contribution had dropped to 44 per cent and the rates had risen to over 55 per cent. By the mid-1980s cuts in government financial support had turned economic failure into fiscal crisis and brought Liverpool to the edge of municipal bankruptcy. And this all spilt over into the city's political life as a Militant-led Labour party used its budget crisis to challenge the authority of a free market Conservative Government. Liverpool now stands at the centre of the economic, social and ideological forces facing British cities. It is a test case of how the country responds politically to long-term urban decline. From economic collapse to financial crisis The port dominated Liverpool's economy after the first dock was built in the early part of the 18th century. But in the second half of the century, trade exploded. The slave trade played a major part in the boom- by the end of the century Liverpool supplied three quarters of the country's slaving ships, which in peak years carried 50,000 slaves. But human beings were not the only goods in which Liverpool traded as it became a vast importer of raw materials as well as a major exporter. Throughout the 19th century Liverpool flourished ~ven further. Trade trebled between 1830 and 1860 and again between 1860 and the outbreak of the first world war. By 1914, the port was second only to London, with one third of all British exports and one quarter of all imports going through Liverpool. The port also dominated the labour market, with some serious long-term consequences. Outside the commercial sector, jobs were mainly semi- and unskilled, casual, irregular and poorly paid. Unlike other cities, a core of skilled workers did not develop, because THE ORIGINS OF THE BUDGET CRISIS /11 manufacturing never took off in Liverpool. This overdependence on the port, and the relative absence of an industrial base, always worried the city's leaders.