Labour’s Liverpool Militant rhetoric: Is it ever ok for a council to set an illegal budget?

The 1985 row has been resurrected at Labour conference. But right-wing critics should look closer at today’s local government crisis.

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Barely a day into Labour party conference in Liverpool this year, references to Militant have peppered the rhetoric.

Kicking this off while speaking at Labour women’s conference, shadow equalities minister Dawn Butler spoke approvingly of the 1985 decision by Liverpool city council – controlled by the hard-left Trotskyist group Militant – to set an illegal budget (spending more than its income) in a stand against cuts by Margaret Thatcher’s government.

“We are in Liverpool where over 30 years ago the council stood up to Thatcher and said ‘better to break the law than break the poor’,” Butler told her audience.

Following this speech, Jeremy Corbyn commented in his interview with Andrew Marr that he “absolutely understand[s]” the prospect of local authorities today following Militant’s example and breaking the law.

“Well, I understand it, I absolutely understand it,” he said in response to the question: How would you regard local authorities now which broke the law in order to make their political point?

The Labour leader said Butler was “expressing support for the determination of the people of Liverpool” in her speech – and while “the politics and legalities of the whole thing have moved on”, he called for more local government funding and recalled his anger in the Eighties at the way Islington council’s budget was cut.

Of course, any mention of Militant’s Liverpool takeover is a tinderbox in the context of this conference.

Not only does it mark a turning-point in the history of the Labour party (with then leader Neil Kinnock’s impassioned condemnation at 1985 Labour conference) and hold a turbulent legacy in Liverpool, but comparisons (however dubious) have been drawn between Militant and the pro-Corbyn network Momentum ever since the group was founded in 2015.

Approval or even caveated criticism of Militant’s Liverpool council rebellion was understandably going to prove controversial among Labour figures.

But because of the state of local government finance today, Corbyn and his allies can be bold when referring to Militant’s actions in Liverpool – and the path of cash-strapped councils today.

Although the Conservatives were quick to condemn Butler’s comments, their words ring hollow when the Conservative-led council in Northamptonshire – thought soon to be followed by other Tory county councils – was the first to be declared effectively bankrupt this year following years of mismanagement and nearly a decade of austerity.

“This is the sorry state of Labour today: shadow cabinet members praising the hard-left militants of the 1980s,” said Tory party chairman Brandon Lewis MP.

“Militant controlled Liverpool of the 1980s boasted it was better to ‘break the law, than break the poor’ but ran out of money and was forced to sack its own workers… Labour has learnt nothing from the past and would take the country back to bankruptcy, job losses and worse public services.”

But it’s Northamptonshire’s Tories – and potentially those of Somerset, Norfolk, Lancashire, Surrey and other County Councils Network members in future too ­– that are running out of money to the point of financial collapse.

As long as this problem is ignored by central government, Labour will have sympathy in local authorities – whatever their politics – when discussing the near impossibility of passing legal budgets.

As one Conservative party source who previously worked at Northamptonshire County Council told me: “The thing with Northamptonshire is that it was doing what we always accuse Labour of doing – spending more money than it could afford because it just couldn’t bear to cut services.”

Anoosh Chakelian is senior writer at the New Statesman.