What it would mean for Labour councils to defy cuts

In many areas Labour councillors say they will "fight the cuts" - but also implement them!

They say they have no choice. In fact they can and should use their council positions as platforms to mobilise to defy the cuts.

The alternative is not a little harmless trimming. Central government is set to cut councils' funding by 25% over the next four and a half years. Since much that councils do is "statutory" - background stuff that they must do, by law - a 25% cut is huge social destruction.

Poplar's Labour council, in 1921, and the Labour council of the small town of Clay Cross, in 1972-4, upheld the interests of their working-class communities by defying central government constraints, and won victories.

Poplar extracted extra funds for councils with a poor local tax base; Clay Cross created the pressure which made the incoming Labour government in 1974 repeal Tory legislation to force council rent rises.

During the Thatcher cuts of the 1980s, Liverpool's Labour council went to the brink of defying the government over cuts. It won solid working-class support for defiance.

The Liverpool council leadership, under the influence of Militant (now the Socialist Party), dodged and blinked at the crunch, and ended up making cuts. But if the councillors had held firm, Thatcher could probably have been beaten back over cuts (and the great miners' strike then underway could have won).

Defiance involves risk for councillors. The Poplar councillors were jailed for a short period; the Clay Cross councillors were surcharged and made bankrupt.

Like industrial strikes, council defiance cannot be made risk-free. The question for councillors, as for workers in a strike, is whether they are prepared to take risks in the cause of working-class solidarity, or choose to save their own position at the expense of others.

The risks of defiance are smaller now than they used to be. The details are given later in this article.

Labour councils which put working-class solidarity first should:

* Not make social cuts now! Whatever the coming central government cuts, councils are large organisations with complex finances which give them leeway. They can cut top management and councillors' expenses. They can sell commercial assets (Camden Labour council, for example, plans to do that). They can juggle accounts to move spending items from one financial year to the next. Although there are legal limits on councils borrowing, there may still be loopholes. (Liverpool council found one in 1985, borrowing from Swiss banks).
* Mobilise council workers, council tenants, and local communities for a fight. Financial gambits are no long-term answer, but they can allow for time to mobilise. Obviously councillors will have little credibility when calling on workers and tenants to fight unless they make a stand themselves.
* Aim towards a concerted act of local working-class defiance - councillors refusing to budget within central government limits, council workers striking, council tenants rent-striking, residents withholding council tax - with the demand that central government restores the money for local services.

If all Labour councils took this stand, then the Lib/Tory government would have to retreat very quickly. If even a sizeable few did, then the government would be in big trouble. Poplar and Clay Cross showed that even a single council, on its own, can win a victory.

Once mobilisation is started, it should be controlled democratically by a local delegate committee of working-class organisations, with the councillors taking part alongside others. The time to move to all-out defiance should be decided by that delegate committee.

It will depend on the tempo of mobilisation, on possibilities of linking up with other working-class struggles against the government, and so on.

The idea that Labour councils should mobilise against the cuts, rather than implementing them, is often expressed in terms of asking them to set "a deficit budget".

This is slightly misleading, for two reasons. Central governments often set deficit budgets (budgets in which spending exceeds income). They make good the gap by borrowing, or just by printing money.

Councils cannot print money, and have tight legal limits on their borrowing. A "deficit budget" would not be a legal budget at all, but just an agitational gesture. It might be a good agitational gesture. But it would be a gesture to help mobilise, not the aim of the mobilisation.

The "deficit budget" formulation focuses everything on council budget day in April. That might be the right time to "go over the top". Or it might not. The decision should be based on the democratic discussions of the local campaign, rather than administrative schedules.

The semi-defiant Labour councils of 1985 delayed budget-setting rather than setting illegal budgets. In the end they all set legal budgets. Liverpool and Lambeth councillors got surcharged, not for any decisive act of defiance, but for their delay in setting a budget.

Before 1985, left Labour councils had relied on raising rates (local property taxes, charged on tenants rather than owners) to offset central government cuts. The forerunners of AWL argued against this tack. It was a big debate within the left.

Nothing similar is an option now. Business rates are set by central government, not by councils. Domestic rates have been replaced by council tax.

Council tax income is only about a quarter of councils' budgets, most of the rest coming from central government, so to offset cuts of 25% in central government funding, council tax would have to be raised 70 or 80%. Council tax is a regressive tax. In any case, central government has, and uses, powers to "cap" council tax rises.

In the past, defiant Labour councillors have been jailed and surcharged. In the 1980s, there was a standing threat of "commissioners" being sent in to push aside the elected councillors and run the local authority.

Under current legislation, those penalties seem no longer to exist. The first move against councillors taking a defiant stand is that unelected council officials - the Chief Financial Officer and the Monitoring Officer (usually the Deputy Chief Executive) - are legally mandated to issue "warnings" to councillors acting "out of line".

The councillors can override the Chief Financial Officer and the Monitoring Officer, though only after a "cooling-off period".

If they do override the Officers, anyone can bring a complaint against each individual councillor to a body called the Standards Board, which in turn can refer it to the Adjudication Panel. (Thousands of complaints against councillors are brought to the Standards Board routinely, without any such previous drama. Presumably a complaint brought after councillors had defied the Officers would get further than most others do).

The Standards Board and the Adjudication Panel can fine, temporarily suspend, or disqualify councillors, but not surcharge or jail them, or send in "commissioners" to take over the council.

The Tory/Lib government has announced that it plans to replace the Standards Board regime by a different one, but it has not done that yet, and it is not clear that the different regime would reintroduce the more severe penalties.

For now, in short - unless some keen lawyer comes up with another, more obscure, legal path - councillors face smaller risks than in the 1980s or 1920s.

Local Labour Parties serious about fighting cuts do, however, need to identify "substitute" council candidates who will stand in by-elections created if defiant councillors are disqualified.

No Labour council today is offering even the general talk about defiance which was fairly commonplace in the early 1980s. It is hard to find even individual left-wing Labour councillors bold enough to vote against cuts. For that matter, council unions are generally less defiant and demanding than they were in the early 1980s.

To do anything other than accept huge damage by Tory cuts, the whole labour movement has to reshape and reorient itself now. It won't be Labour councils that lead that reorientation. But Labour and trade union activists need to start arguing now about what Labour councils can and should do as part of a developing militant anti-cuts movement.

The first argument is that council Labour groups should integrate themselves into local anti-cuts committees, and make their strategies and options a matter for democratic debate in the local labour movement, rather than "there is no alternative" announcements.

This article was written by Martin Thomas of Workers' Liberty.