Old politcal documents – Merseyside Out Of The Crisis (1988) ed. Steve Munby

Published by Merseyside Communist Party as a pamphlet for discussion
Edited by Steve Munby, 1988

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Unemployment and poverty are not new arrivals on Merseyside. Many local people have vivid memroeis of the last great depression in the 20s and 30s. Even in the post war years with the arrival of new industries and the major slum clearance programmes, widespread poverty and unemployment persisted. The long term decline of the local economy and the financial, social and political crisis that has gripped Liverpool in recent years have been ably documented elsewhere and are all too familiar to local people and to many outside the Region. But the impact of the new recession which began in the 70s and the policies of the Thatcher government have turned an already serious position into a desperate one.

The collapse of the local economy and the impact of this on local people are frightening. Young and old, the unemployed and those in work, black people, women, the disabled, all face an increasingly bleak future. And poverty brings added problems in its wake – rising crime, systematic decay of the environment and growing divisions. Black people have become a more frequent target for racist attacks and systematic discrimination in all areas of life. Groups forced to the margins of social life by the process of economic decline have become the target for attacks as unwanted burdens on the rest of the community. The old, the young, the unemployed, the homeless, disabled people, the mentally ill and handicapped have all been portrayed as both the victims and the agents of decline – a process refinforced by the policies of the Thatcher government.

There is an overwhelming need for a serious and open discussion about how to arrest and reverse the process of decline and create a future for Merseyside and the people who live here. Sadly this has scarcely taken place. Growing divisions and sectarianism have led to political debate beging dominated by slogans and personal abuse for much of the time, a systematic invasion of the seriousness of the problems and the need to draw all sections of the community into developing a solution.

Any realistic response to the problems of the area must start from an understanding of the complex nature of the changes taking place in economic and social life. While both the public and the private sector have an important role to play in the process of recovery, the basis for any alternative strategy must be the people of Merseyside themselves. It is their skills, creativity, militancy and organisation that provide the key to developing a better future. But local initiatives are not enough. Major changes in government policy will also be required. We need to convince people outside Merseyside of the seriousness of the problems we face, the need to tackle them and the possibility that they can be solved.

The nature of the problems and the alternative approach we suggest, mean that this pamphlet cannot pretend to contain the anser to the problems of the area. But hopefully it can stimulate a wider process of discussion, campaigning and creative initiatives. We are conscious that much of the pamphlet is focused on Liverpool. While Liverpool undoubtedly occupies a strategic place in Merseyside, the lack of detailed discussion of the social and political problems and alternatives in other parts of Merseyside reflects a weakness which we hope wider discussion will remedy.

This pamphlet has been produced by Merseyside Communist Party. it is not a policy statement but a contribution to discussion. In producing it we have been helped by many people. Members of the Communist Party, Labour Party and no party at all. They have contributed sections to the pamphlet, taken part in discussions around it, given us detailed written criticism of early drafts, suggested ideas to us and given practical assistant in producing it. It would have been impossible to proiduce it without their help, although they should not be blamed for the contents (and some of them would disagree with major parts of it). Anyway a big tahnk you to Mike O’Neill, Dave Marks, John Duncan, Anna Jay, Tony Lane, John Volleamere, Ben McCall, Brenda Kirsch, Michael Parkinson, Phil Leeson, Brian Thompson, Pete Betts, Jack Kay, Brian Brierley, Mike Carden, Tommy Doran, Gary Mahoney, Robin Cope, Petra Tinney, Eric Caddick, Lynn White, Pat Devine, Gordon Nash, Bob Goulden, Des McGonaghy and Roger O’Hara.

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KEYNES – Liberal economist, whose ideas gained prominence after the crash and the slump of the 1930s. Advocated demand management techniques as ways of avoiding future recession.

DEMAND MANAGEMENT – Economic management exercised by central government by increasing demand in economy through government spending and controls of finance.

THATCHERISM – Political and ideological philosophy operating for the past eight years. Adovcates full free market economy, placing great emphasis on individual responsibility. Totally opposed to collective provision as practised by welfare states.

HEGEMONY – Leadership that is exercised amongst diverse and complex forces in society using consent as its major method of achievement.

QUANGO – Quasi Autonomous Non-Governmental Organisation. Non-elected bodies set up by central government to institute and supervise various projects. Can exercise considerable power and influence with funds being directly supplied by centre.

MERSEYSIDE DEVELOPMENT CORPORATION (MDC) – A local based quango given the task of regenerating local economy, e.g. Albert Dock.

ENTERPRISE ZONES – Special areas designated by central government which receive concessions from paying taxes and rates, ostensibly to stimulate enterprise and create jobs.

CONTRACT COMPLIANCE – Insistence that firms granted a contract comply with certain conditions, e.g. Equal Opportunities, local labour recruitment.

CAPITAL INFRASTRUCTURE – Major capital intensive strucutres such as roads, sewers, etc.

WHITE GOODS – Major consumable durables, e.g. televisions, washing machines, etc.

GOLDEN TRIANGLE – – Refers to the Common Market, and the concept that most economic activity takes place within a triangle whose centre is in the Benelux countries but econompasses West Germany, France and south-east Britain.

REGIONAL FUND – Fund set by the EEC to improve capital infrastructure of poorer regions, this provides funds for roads, drainage, etc.

SOCIAL FUND – This provides funds to help in education and training requirements for regions in need of regeneration.

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By the end of the 70s Merseyside’s economy was in a bad way. The decline of the port and port-related industries continued. Local manufacturing was hit by a wave of closures and redundancies. Cuts in public expenditure were bringing to a halt in a growth in employment in public services and local government. All of these trends have continued in the 1980s under the Thatcher government. At the same time other changes can be seen. Some are the result of government policy, others arise from broader developments in social and economic life.

This chapter looks at these changes and why they have happened. We show how the long term decline on the local economy has combined with current trends in capitalism to create a quite new situation. We argue that neither Thatcherism or the alternatives on offer from Labour and the Alliance can resolve the problems facing the local economy. But the traditional answers of the socialist left will not longer work either. Only a major rethink of the public sector, the market and economic planning will allow us to grapple with the issues which face us today.


There have been several developments:

1. Employment in the the port-related industries has continued to decline. Some of this is a result of the changing patterns of trade and EEC membership. Another factor is the the negative effects of the recession and government p0licies on trade and shipbuildiong industry. Declining employment does not necessarily mean declining profitability. Containerism has dramatically reduced employment in merchant shipping and the docks over the last 20 years. But lower labour costs have meant an increase in profits – often concealed by the maze of holding and subsidiary companies in and around the port of Liverpool.

2. There has been an accelerated loss of manufacturing jobs between 1979 and 1984: a net loss of 70,000, in particular in electrical engineering; food, drinks and tobacco; bricks, pottery and glass. A high proportion of these losses have been in large “branch” plants: plants owned by companies whose head offices are located elsewhere, a common feature of local industry. Since 1984 job losses have continued at a slower rate, often through natural wastage rather than closure or redundancy.

3. The service sector has not generated enough jobs to compensate for the decline in manufacturing employment (which has happened nationally). The “traditional” services, in transport, communications and distribution, which dominated local service sector employment, have  experienced a major contraction. Employment in “white collar” services has been relatively static, compared with a continuous expansion nationally (+5% between 1979 and 1984).

4. Public sector employment has increased in importance. There has been a slight drop in total employment in this sector, but much less than the overall rate of job loss.


The effects of these trends are complex:

1. Unemployment doubled between 1979 and 1984, from 79,000 to 140,000. Currently (1987) it is running at about 25% of Merseyside and 27% in Liverpool, according to the official figures. The real level of unemployment is much higher due to “unregistered” unemployed and phoney training and job creation measures. It is increasingly permanent. The long term unemployed – those out of work for more than a year – increased from a third of the total unemployed in 1979 to over half in 1984.

2. Unemployment and economic decline have an uneven impact on particular groups (black people, the young, men, manual workers) and geographically (concentrated in inner city areas and outer council estates). This is leading to a deepening gap between a comfortable majority and a dispossessed minority. We not only have a North-South divide, but the spectre of “Two Merseysides.” There is a continuous migration of younger, more skilled workers, out of the region, leaving behind a less skilled, less prosperous and increasginly aging population. Economic decline and falling population create an increasingly derelict physical environment: poorly maintained and deteriorating capital infrastructure, roads, sewers and other services and housing, education and NHS land and buildings.

3. There has been a long term decline in the number and importance of skilled, male, manual workers in the working class. The biggest job losses in Merseyside from 1979-84 were in this group. This has been accompanied by and reflected in the lack of militancy in manufacturing unions in recent years: the acceptance of voluntary redundancies, low pay increases, the failure to oppose closures and the swing to the right in major unions organising in this section, like the AEU. It has important consequences for the labour movement. This section of the working class that was once central is not now. Other sections have assumed a new importance reflected in trade union recruitment strategies. General unions like the T&GWU and GMBATU have launched recruitment campaigns aimed at the growing mnumbers of mainly female, part-time workers. Meanwhile unions like ASTMS and TASS, all set for merger into the new conglomerate Manufacturing Science and Finance (MSF) are equally concerned  to recruit office staff in research and develoipment, financial services, etc.

4.  The local capitalist calls has virtually disappeared – in part due to the growth of external control and closures. The recent takeover battle at Pilkington attracted such attention because it is one of a dying breed – a major capitalist concern which is locally based. The Chamber of Commerce is relatively weak as a lobbying force (unlike Leeds and the West Midlands). Local councils or Church leaders represent the area to central government.

5. The proportion of women in the workforce, particularly part-timers, has grown significantly. Always relatively high locally, it has increased in recent years. This reflects structural changes in the economy, such as the growth of service jobs and changes in the use of labour in manufacturing industry. One result is that trade union struggles by women have assumed an increasing importance.

6. Changes in the way things are produced in manufacturing industry – the labour process are having a big impact on the structure of the workforce. A new split is replacing the old division between white collar and blue collar workers. One group, “core” workers, were employed in jobs involving a high degree of skill, extensive training and enjoying relatively high pay and security of employment. The other group, “periphery” workers, are employed in relatively unskilled and low paid jobs, are frequently part-time, temporary or casual workers and in some cases working from home. The former tend to be men, the latter women.

7. As unemployment and/or low pay become a normal way of life athe informal or household economy has grown in importance. The same is true of welfare services and local councils: as a source of services and benefits and as potential employers. State employment has grown locally in relative terms. At the same time local councils and welfare services face growing finanial problems, of which Liverpool Council’s budget crisis is simply the best known. The demands placed on services have grown alongside unemployment and poverty. Government spending cuts have increased the pressure. Partly as a result political struggles around the delivery of services have assumed a new importance. The pressure is on the public sector from both government and consumers – albeit often pushing in opposite directions. The public sector has a crucial role to play in the future economic and social development of Merseyside. But it will need to be a new kind of public sector. It must respond more positively to the needs and demands of the peoiple who use services and those who work in them. In should be able to compete and intervene more actively in the marketplace.

8. The decline of the port and port-related industries is irreversible. This leaves an enormous gap in the local economy, which manufuacturing industry will be unable to fill, either as an employer or as the driveing force of local develoipment. Services have assumed an increasing importance in the public and the private secot, particularly in areas that link in to the assets of Liverpool derived from its role as a port, from tourism and lesiure to financial services. While there is a realistic basis for growth in employment in port-related industries and manufacturing, albeit mainly in newer sectors, they will play a less central role in the local economy in future.


Merseyside’s economic decline has a number of causes:

1. International recession.

2. Government policy, especially the removal of exchange controls and public expenditure cuts, which have had a severe effect on domestic manufacturing industry.

3. Changing patterns of world trade, including the growing importance of the EEC and the shift in trade to cast and south coast ports.

4. Investment decisions of multinationals.

Underlying these are long term shifts in the organisation of economic life which have contributed of Merseyside’s economic decline and will influence its future prospects. To explain these shifts it is important to understand the historical development of capitalism and Merseyside’s place in it.

Since the early 19th century capitalism has experienced periodic crises. Long phases of expansion are interrupted by periodic crises, followed by phases of contraction. Crises eventually lead to a restructuring of capitalism, which acts as the basis for a new period of expansion. These phases of expansion mark distinct phases of capitalist development.

Each new phase of capitalism has been marked by a new geographical pattern of growth and decline, with different consequences for each region. Merseyside’s position in the 19th century was dominated by the port of Liverpool. Its future was tied firstly to the Lancashire cotton industry and secondly to the internatioanl standing of the UK economy. The port suffered an all-round decline between the wars as  both of these lost ground. There was a shift of industry from the North to the South and the Midlands as new leading sectors emerged such as the car industry.

Each new phase of capitalism is marked by:

a) different leading sectors of the economy

b) new technologies

c) new products and patterns of consumption

d) distinct forms of organisation and capitalist companies

e) different forms of state intervention and regulation

f) new geographical patterns of production.

The problem of Merseyside is that in the last phase of capitalism, new leading sectors, the organisation of capitalist companies and the geography of production have been against us. State intervention was unable to counteract this. It looks as if the same will be true, but worse, in the phase of capitalism that is emerging now. The challenge for us is to develop new forms of state intervention and regulation which can harness new technologies, new products and patterns of consumption in our favour and counteract the negative features.

This period also marked the first attempts by the state to intervene in the problems of the “Distressed Areas” to create alternative employment. This reached its peak in the post war period during the 1950s and 1960s. Government regional policy fostered the growth of a new manufacturing sector locally through the relocation of branch plants. The collapse of the long boom in the 1970s saw a massive withdrawal of capital and jobs through the rationalisation or closure of these plants.

Meanwhile other changes in the international economy made Merseyside’s position even more precarious. Shifting international trade and the growing importance of trade with the EEC have further weakened the position of the port. A new geographical pattern of production has made Merseyside less likely to be the location of new manufacturing investment. And in the current phase of economic development, new investment in manufacturing is no gurantee of direct job creation. It can lead to job loss.

The economies of all the advanced capitalist countries are now undergoing a radical transformation. The long term outcome of this is still unclear. It may result in a prolonged period of stagnation.l There may be a renewed phase of growth. If there is a long term upswing it is not clear if this will lead to a return to accpetable levels of employment of whether existing levels of unemployment will continue.


It is clear however that a new phase of capitalism is emerging. So far a number of features can be seen:

a) New technologies are being introduced which are reshaping skills and restructuring the workforce. The old patterns of work which formed the social and political basis of the labour movement are being destroyed. New leading sectors of the economy are emerging as a result in information technology and biotechnology, creating new products with the potential for new markets and new patterns of mass consumption.

b) New forms of capitalist production are increasingly coordinated by multinationals on a global scale. The large scale manufacturing plant is becoming obsolete as flexible manufacturing systems, using computer technology, are applied to the production process. Large plants are being trimmed down as production is decentralised to smaller, independent, specialised units, through the growth of sub-contracting and franchising.

c) There is a new geographical organisation of production. A new international division of labour is emerging and some regions, central to previous phases of capitalism, are declining fast. The centre of industrial growth is shifting: within the UK towards the M4 corridor and rural areas; within Europe towards the “Golden Triangle;” and internationally towards Japan and the newly industrialised countries of the Pacific.

This global revolution is just beginning. Its outcome will be shaped by social and political conflicts. In the UK the worst effects of change have been reinforced by the economic policies of Thatcherism. It has not directly intervened to any great extent in the process of restructuring. but it has been a major influence on the conditions in which it occurs and the direction it takes. What scope is there for an alternative approach? Can new conditions be created which will take the process in a different direction?

An alternative strategy will have to face up to a number of challenges:

1. It will have to actively intervene in the process of restructing. Demand management, Kenyes style, is no longer enough to influence events. Not are traditional approaches to nationalisation or economic planning. We will need a new kind of public sector intervention in the free market: in tune with the underlying changes in the organisation of production, taking initiatives rather than reacting to events, providing support for experimentation and innovation and the application of new technologies to social need.

2. It must identify new patterns of mass consumption. If long term job creation ois to be sustained then it will be necessary tod evelop a new equivalent of the “white goods” machines of the post war boom. This could be based on meeting social needs through the application and diffusion of information technology.

3. New forms of social and political control over economic development must be created. New forms of production and its global organisation have seriously reduced the power of governments ot regulate national economies. Established mechanisms for international economic coordination have also broken down. New structures and approaches are required at all levels. New forms of international cooperation will be needed between nation states, regions and popular forces (trade unions, cooperatives, etc). It will be necessary to develop a variety of decentralised forms of production (public, private and social) and extend the scope of economic planning beyond central government. Local councils will assume a greater role, but other must be involved in this process, both institutions and popular organisations.


The government’s strategy relies on the private sector, as the central agent for regeneration of the local economy. This is wishful thinking judging by past experience. Recent efforts to create new jobs in the private sector have been unsuccessful. The previous Liberal administration in Liverpool City Council pursued a strategy of encouraging small business by providing new industrialised units. THis did not create new jobs – a negative lesson confirmed more recently by the experience of the Glasgow Eastern Area Renewal Project. The more ambitious Speke Enterprize Zone appears to have only succeeded in shuffling around existing local jobs. The Merseyside Development Corporation (MDC) was established to regenerate the derelict docklands by using private secotr resources to attract private investment. Unlike its London equivalent the MDC has not brought in substantial private investment. Most of the work completed has been public sector financed.

Existing local industry is unlikely to be a source of new jobs. Industries relying on the depressed local market are constrained by deficiencies in spending power. Those industries which “export” outside the region tend ot be concentrated in static or declining product markets, such as motor vehicles or food, or often rely on a depressed domestic economy. Even those industries with the potential for growth in output are likely to suffer the effects of “jobless growth” following investment. Inward investment has been absent in recent years and shows little potential as a source of expansion in employment. Unlike the 1960s and early 1970s there is relatively little mobile manufacturing or office investment. What there is unlikely to locate on Merseyside because of the changing geography of production.

What about private sectors as a source of new jobs? In the USA this has been a major area of job creation under Reagan. The present government has placed great store on the prospects of new jobs in tourism and leisure services, particularly in depressed areas like Merseyside, indeed thi shas been the main plank of the MDC’s work, with projects such as the Garden Festival and the Albert Dock.

It is unlikely that th epresent government policy will succeed. Job creation under Reagan was stimulated by major boosts to domestic demand via a combination of increased government spending and tax cuts. The MDC has not been successful to date in attracting substational private investment. It would require a combination of a major boost in local and domestic demand and far more extensive and prolonged public investment to attract private finance to Merseyside on a big scale and stimulate extensive job creation in private sectors.


The main alternative on offer are from the Labour Party and the Alliance. Although there are important differences bewteen them, they broadly share a commitment to the post war values of consensus and social democracy. Their programmes would involve a significant boost in public spending. This would lead to increased employment in the short and medium term, both in the public sector and to a lesser extent in the private secotr, via increased demand for goods and services generally and the range of majority capital programmes it would involve. We could expect various fiscale measures to boost demand, in particular lowering interest rates to assist manufacturing.

There would probably be a weighting of increased expenditure in favour of depressed areas like Merseyside, alongside a strong regional policy to encourage local investment. This would be an improvement on present policies and one could expect a short term increase in employment. However there are limits to the package.

It still relies heavily on the private secor to create jobs (although less than the government does) and on diverting private secor jobs to the declining regions by a strong regional policy. In the 1950s and 1960s such a regional policy bought tens of thousands of new manufacturing jobs to Merseyside and in creating a manufacturing sector not tied to the port. Looking back this may seem no mean achievement. But it proved a fragile development, reliant on externally controlled branch plants. This contributed to the massive loss of manufacturing jobs in the 1970s and early 1980s.

Such a policy would not work today. We are in the middle of a prolonged international recession. World markets are increasingly competitive. The British economy is more open to the forces of international competition. Production is increasingly organised on a global scale by multinational companies with world wide strategies. Strong forces are leading trade and investment away from Merseyside. It seems improbable that boosting demand and other fiscal measures, combined with a strong regional policy will be enough to counteract these trends.


Another problem with this approach is the reliance on the state and action from “above” to tackle poverty and unemployment. An important factor in the success of Thatcherism and the changed political climate of the 1980s was the way it addressed the widespread dissatisfaction of working class people with many apsects of the post-war welfare state. Nationalised industries, the public utilities and local council services have not proved the unmixed blessing that most socialists believed in the immediate aftermath of 1945. While supporting in principle institutions like the NHS, state education, public transport and council housing, many working clas speople do not like their actual experience of them.

Lack of funds and the dominant role of professional and managerial elites are part of the problem. But at the heart of it is the centralised model of most public services and the lack of any democratic input for consumers or workers. To sustain new jobs and services for any length of time means winning support for higher taxation to pay for them. The expansion of public services and employment may attract temporary support. Without major changes in the way they are run it will not last.

In the past the left has put forward an answer to the problems posed by market forces and the role of multinationals in the form of nationalism. As we have suggested above there are major problems with the “statism” of the left. But leaving aside these objections, would nationalism of significant sections of the local economy, as part of a national programme of extending public ownership, achieve the goals intended? Would it bring into public ownership valuable assets and extend public control over the economy? Would it compensate for the limitations of fiscal measures and regional policy? Recent changes in the global division of labour, or particular importance for Merseyside, suggest it would not.


Merseyside has a high proportion of branch plants. This has always made us vulnerable to decisions made elswhere on investment and jobs. A number of changes in the organisation of capitalist production make this more of a problem in the future. Production is increasingly organised the integrated on a world scale. Multinationals are likely to operate integrated international systems of production. There is a world wide division of labour, with component products drawn from a variety of sources of interdependence bewteen plants. So from the early 1970s Ford UK ceased to be an “integrated production network with its own capacity.” (Robin Murray, New Socialist, April 1987). Kodak in Kirkby is one of three UK plants “controlling only a part of the product range and a fraction of the tied European marketing system.” Most of the company’s research and development capacity is now based in the USA.

Secondly, legal ownership is becoming less important as a means of controlling production. Multinationals can no exert control in other ways: through franchising, sub-contracting to small firms, licensing, the use of patent law, limiting the availabilioty of key technical skills, control of markets, research and development and sources key components. In many cases multinationals are divesting themselves of ownership of production units, preferring to let others incur the direct burden of organising the production process.

An example locally is the management buy out of Evans Medical from Glaxo, where the former produce under license from the latter. These factors limit the effectiveness of nationalisation. In many cases it would mean the expensive purchase of equipment that would be useless without access to the entire chain of operations, which would only be possible by agreement with the multinational in question. Attempts to wrest effective control of a unit from a multinational in such circumstances would not only save jobs, but almost certainly destroy them, by removing the unit from the chain.

Thatcher’s opponents have failed to confront openly the serious institutional obstacles to their policies and the added challenge thrown up by recent developments in international capitalism. Most seriously they have shown little feeling for the new economic forces which are emerging. Theatcherism despite its reactionary aspects represents one approach to modernising the British economy. It is in tune with new sectors of the economy, reflected in the Tory vote among those groups and part of the country which are benefiting from the changes. It offers little to the people of Merseyside. But its opponents show little sign of developing a strategy for “progressive modernisation” of the economy in contrast to Thatcher’s “reactionary modernisation.” This is anot a question of beating the Tories at their own game by trying to “buy” the votes of homeowners, shareholders or the higher paid. It does involve creating a strategy and a vision for the world we live in today – not the one we grew up in.


The proposal to create a single European Market in 2991 received a further impetus last year with the passing of the Single European Act, which reduces the need for unanimity in the Council of Ministers, the European community’s key decision-making body; and by the European Commission’s drive to further dismantle the barriers to free communication between member states. If implemented on time (there is some doubt whether this will occur, the proposed timetable for removing trade barriers has already slipped), a single economic space will be created by 1992 through the removal of barriers and restrictions to the free movement of capital, labour and trade between the 12 member states.

As it stands the proposal for an internal market represents Thatcherism on a European scale, a classic free market argument. Its goal is to increas the competitiveness of the EEC economies, not just by the removal of trade barriers, but also by the liberalisation of financial markets, the establishment of EEC wide technical standards and the opening of public sector procurement contracts to EEC wide traders. Once fully implemented, national governments will lose many of their existing powers to regulate private capital and trade. It is unclear whether these measures will achieve their objective to increase the competitiveness of European industries. European economic integration and trade have been increasing anyway since the late 1950s without a marked effect on the dynamism or otherwise of European industry.

However the impact of the full internal market will be considerable for the peripheral regions such as the Mediterranean countries, Ireland the declining UK industrial regions. Their industries are likely to suffer further decline because of increased competition, a loss of capital and labour resources and the concentration of future investment in the already wealthy regions of the “Golden Triangle” in the heart of Europe. The right wing lobby in the European Community denies that integration will have this adverse impact and argues that the less prosperous regions will be able to attract new investment and employment opportunities because of their comparative cost advantages (relatively low wage costs). The European Commission, worried about the implications of integration, have proposed that the Regional and Social Funds be doubled to alleviate these adverse consequences. This has not been accepted by the Council of Ministers, at present dominated by right wing governments.

There is little public awareness in the UK of the internal market and it wide ranging and radical implications for local and central government and private industry. The left in particular needs to become quickly aware of the situation, not only because of the likely economic impact, but also because of the constraints the internal market will place on the ability of a future labour government to intervene in the economy. This means countering the right wing lobby of the European Commission, developing links with the left elsewhere in the Europe at all levels in local councils, trade unions, social movement, political parties, aimed at organising collaborative political campaigns around the consequences of integration and other issues of common interest.

Unemployment and poverty are the most  important problems facing Merseyside. They need to be seen however in the wider context of changes in the overall structure of the economy, the impact of government policies and the balance of political forces in Britain. Most alternatives to Thatcherism tend to underestimate the wider changes taking place and rely too heavily on the state as an instrument of economic policy: our approach is different.

Instead of relying exclusively on the state to implement policy solutions from above we are concerned to create a different kind of economic strategy, one base on an alternative dynamic, a process in which different popular forces bring their problems, oppressions and campaigning into the centre of policy formation and begin to influence the future direction of economic change.

This strategy should have three aspects:

1. It should be a strategy for people not just the state. It should not just be a blueprint of policies for implementation by the state, but a framework to link political action by a range of forces.

2. It should not be a reactive strategty. It must go beyond defensive reactions to unemplymoent and fight for real job creation and beyond this to present a positive economic future for the Region.

3. It must be based on the new reality of today. It must be based on an accurate understanding of the changing nature of the Capitalist economy. A new phase of capitalist development is emerging, with new economic, social, political and cultural forces. Many of the current problems of the left stem from the fact that it is out of touch with this.

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The Labour movement must build a new alliance based on social and economic conditions today, which can take Merseyside “Out of the Crisis.” This alliance can be built around three objectives:

1. Initiatives to create jobs, reduce unemployment and expand educaiton and training; the need to tackle poverty and all forms of social and economic deprivation and oppression, both in the interest of those directly affected and as a prerequisite for creating desirable living conditions for everyone.

2. The need to regenerate the local economy, through a long term approach to the problem, based on cooperation between the public and private sector, led by the former, aiming for a more balanced structure of economic life than in the past. This will require new forms of organising economic life, extended accountability and pouplar involvement in the economy and making the debate on economic change public property at every level.

3. To respond to the changes taking place in Britain and Merseyside in particular and to the challenge of Thatcherism, with a new vision of the future and role of the difrerent communities which make up Merseyside. A vision which is both realiseable and accords with the needs and dream sof local people.

The first two objectives clearly involve the injection of large sums of money into the local economy. In the long term much of this may come from the private sector, but in the medium term it will have to come from the public sector – local councils and other public bodies and ultimately central government or the EEC.

The government is fond of citing the Eastern seaboard of the USA, which faced similar pborlmes to Merseyside in the past, as examples of private sector led renewal. In fact these were all heavily dependent on public money to attract private investment. The government is showing a renewed interest in inner cities and the economic recovery of northern cities. But there is no chance of the sums of money required being made available in the short term, or indeed while the present government is in office. Are we then being unduly optimistic or indulging in a utopian exercise in putting forward a strategy dependent on a big increase in public expenditure?


This is a long term strategy. It will take time to bring together the forces whose support is needed to make it work. It will take time to begin to put it into practice and evene longer for much of it to take effect. Now when things look especially bleak for Merseyside with the return of the Thatcher government for a third term, is as good a time as any to start working towrads making it a reality. There are however different time scales within the strategy. Some of the “future visions” could begin now, while aspects of our immediate proposals for the public sector are unrealisable for at least four years! In broad terms though we do tend to reverse the traditional order of economic policy.

In our view the main burden of tackling unemployment and poverty will fall initially on the public sector, where we see by far the greatest scope for large scale job creation in the short term. The private sector is unlikely to play a major role in job creation, except arguably in the field of private secotrs (although there are real problems with the nature of jobs in this sector). This is not to discount its role, but to suggest its importance is both more long term and concerned more with economic regeneration than job creation.

We may be accused of wanting to “live now, pay later” – a common complaint levelled at the city – in suggesting the public secot job creation should preceded private economic regeneration. Again we do not agree. Thte process of economic renewal we are aiming for involves both public and private sector and is dependent on major changes taking place. Effective measures to tackle poverty and unemployment and expand education and training opportunities are a precondition for economic recovery.


Already high levels of unemployment locally have doubled since 1979. Alongside the large number of unemployed living in poverty are the growing proportion dependent on National Insurance and Supplementary Benefit – pensions, the sick and disabled. Thanks to the government’s concsious policy of fostering low wages as the route to economic recovery a growing number of people “earn” their poverty, often in casual or part-time jobs.

The welfare state, especially the Department of Health and Social Security (DHSS), is in crisis. As unemployment and poverty have risen staff and resources have been cut. Workloads have multiplied, stress-related illnesses increased, more mistakes are made and claimants wait longer and longer for their benefit.

The government, in this area as in others, has cynically exploited the need for change and produced, not a plan to simplify and improve the social security system, but a strategy to cut costs and make poverty even more acute for millions. The Social Security Act 1986 has already led to major cuts, with further reductions planned for April 1988 with the abolition of single payments for supplementary benefits claimants, the loss of weekly additions, cuts in benefit for the under 25s, etc. Alongside the planned Poll Tax (Community Charge) to replace domestic rates, of which supplementary benefits claimants will have to pay 20%, the aim is clearly to force people off benefit into work at any price.

This view is confirmed by the major changes in government special employment and “training” schemes administered by the Manpower Services Commission (MSC). These seem to be moving towards a US style system of forcing claimants onto schemes by denying benefit if a place is refused. If the government is able to introduce the full package of measures over the next few years it will probably be able to show a big drop in the record rate of unemployment by the time of the next election. But these figures will not record the millions who will be living a border-line existence, in and out of work, on and off government schemes, permanently in debt and often not even registered to vote – in order to avoid the poll tax. Alongside the growing teams of social security “snoopers” we are likely to see the emergence of a body of Poll Tax inspectors, searching on the large numbers, especially of young people, avoiding the tax.

A major attack on poverty is dependent on changes in the social security system and extensive job creation. But there are important steps that can be taken now. Local councils can extend funding of unemployed centres, welfare rights centres and citizens advice bureaux. Extensive take up campaigns, particularly in the run up the changes in April 1988 can bring desperately needed cash to the poorest section of the local community an dmoney into the local community.


Since the abolition of the Merseyside County Council the attitude of local councils to funding these kind of initiatives has been varied, with only St. Helens Council showing a consistent commitment to providing resources for this area. Sadly in some cases unemployed centres have fallen victim to political infighting on councils, either between parties in Sefton and the Wirral or inside the Labour Party as in Liverpool and Knowsley. In each case funding has been reduced or withheld by councils because of political differences with centres, not because of criticisms of their work.

There is clearly a need for organisations which serve the community to be accountable not just to local councils, but also to the people who use their services. This should apply most of all to groups serving the unemployed and claimants. The solution to this lies not in increased political control by councillors, but in buildiong into funding agreements clear obligations to undertake certain basic functions and to provide a regular acocunting to the peoiple whom the centre is intended to serve.

Alongside support for independent centres and take-up campaigns councils have a responsibility as the providers of services to prevent unemployment and poverty barring people from using them. Free use of facilities for claimants is important, but needs to be complemented by recognition of other ways in which people are denied access to facilities and participation in social life – by disability, racism, responsibilities as carers whether for children or adults. Local councils could lead the way for other public and private institutions by drawing up an anti-discrimination charter for service provision. These should be agreed through a process of public discussion with those groups who are themselves subject to discrimination, not simply drawn up by a group of officers.

Poverty is a problem for those in work as well, both in terms of pay and conditions of employment. There is is need to promote trade union membership amongst the unemployed and peripheral workers by imaginative recruiting drives like the Transport & General Workers’ Union’s “Link Up Campaign.” These can be assisted by the use of public sector bargaining power over negotiation of contracts and purchasing with the private sector, although this option is clearly threatened by current government legislative plans. Trade union recognition/recruitment rights can be linked to packages of support to local businesses. We need to argue now for legislation to improve the pay and conditions of low paid and part-time workers. Regular take-up campaigns for state benefits targeted at these groups can be linked to trade union recruitment, as with the County Council’s “Low Pay Campaign.”

One of the worst areas for low pay is the public sector, with serious implications not only for the workers concerned but the services provided. There has been considerable publicity recently ove rthe effect of nursing shortages arising from low pay in the NHS. A phased plan for the elimination of low pay from the public sector needs to be negotiated with trade unions, including enchanced provision for paid leave/holidays and childcare (maternity/paternity leave/workplace nurseries). Such a plan negotiated by local councils, to be introduced in stages, could be critical to their ability to secure significant improvements in the delivery of services.


Those directly affected by poverty and unemployment would generally (although not invariably) see the need to make measures to genuinely reduce poverty and unemployment a priority. Others would also give their support, whether for reasons of moral concerns or the fear that they too will be caught in the trap. But there are other reasons wy those not directly affected should prioritise action against these two evils.

The dramatic deterioration of the local environment, physical, social and human over recent years, is to a great extent a product of the rise in poverty and unemployment. Theft, assault, vandalism, litter, peeling paint and broken windows are not of course just a consequence of the latter. But they are the biggest single factor in their growth and extent on Merseyside. If we wish to improve the quality of life for all of us who live here measures against poverty and unemployment are an essential first step. Equally it is unrealistic to imagine that any economic regeneration strategy can be successful without beginning to tackle these problems. A major change in the human and social environment will be as important as any economic or political changes, if we wish to attract new investment both human and financial from outside the region and tap new resources from within.

A key objective of any alternative strategy for Merseyside shoiuld be to link job creation, action against poverty and modernisation and regeneration of the local economy. Job creation on the scale required will need an enormous explosion of popular creativity and combatititivy, both qualities in good supply locally, as well as an awufl lot of money, a commodity in rather shorter supply. it will mean stimulating the widest possible debate on the kind of economic initiatives needed, redirecting the resources available both material and human and giving practical assistance to a wider range of grassroots initiatives in the field of job creation.

We will need support outside the region for a major injection of government funds in the short term to tackle poverty and unemployment and assist the process of economic regeneration. It is unlikely that this will find a ready response from the present government. But unless that process of arguing, winning allies and displaying an ability to use funds effectively begins now, it is unlikely to win support from any future government.

There are clearly other national and international obstacles to effective measures against poverty and unemployment locally and an economic regeneration strategy. The social security and tax systems need radical reform, with a move towards higher levels of non-means tested and non-contributory benefits linked to a national minimum wage. Changes in the funding and administration of oither sections of the welfare state are also needed. These are primarily the province of central government. But argument and campaigning is necessary now, both to resist measures such as the poll tax and to win support in the long term for different approaches. There are also significant changes which can be secured now from local councils and (to a lesser extent) bodies such as the NHS.


Here and elsewhere we refer to government policy and national and international economic strategy. We do not believe that at present there is a coherent alternative economic strategy on the left, although we feel that it should be possible to develop one. We believe that it is possible and necessary to discuss alternative strategies at al ocal level without assuming the existence of a national alternative strategy. Such a discussion can make a serious contribution to eveloping alternatives at other levels, both national and international.

Recent years have shown that jobs can be created far more cheaply by local councils and in the public sector generally than by the private sector. Economic initiatives by some Labour Councils have also shown the possibility for a greatly enhanced role for local authorities in economic policy. We welcome this development and believe it should be pursued vigorously.

The mechanisms for rapid job creation by the public sector are fairly familiar and some would be common to all parts of the country. They include:

1. The government  introducing a major programme of investment in the economic infrastructure: the transport network, sewerage systems and treatment, telecommunications and cable.

2. Extending expenditure on the job subsidy scheme for manufacturing, concentrating support for existing industries to retain jobs against the adverse employment effects of new technology and to support firms in crisis.

3. Redirecting the purchasing and procurement of public agencies/nationalised industries in support industry in areas with the worst unemployment levels.

4. Public services to develop investment programmes for public sector hous building and improvement, school building and improvement, health facilities and nursery buildings.

5. Recruitment programmes based on expansion of leisure services, environmental improvement, health, education, social services and building programmes.

6. A major programme of environmental improvement ranging from cleaning up polluted rivers and canals to developing and adqueate system of controls over commercial products, by-products and industrial processes (from food and toys to industrial waste).

7. Expanding MSC programmes for the long term unemployed with the emphasis on meeting social need and environmental improvement and considerably improved pay and conditions on current schemes. Developing alternative programmes for school leavers, including improved pay and training.


The proposed Barrage across the Mersey has the primary aim of producing profit for the Mersey Barrage Company by producing electricity for sale to the Central Electricity Generating Board, and the secondary effect of creating a large area of water behind its line with potential tourist and leisure industry development possibilities.


Early reports indicated that the number of jobs directly associated with the construction of the Barrage would be around 3,500 with a short term peak of 5,000 jobs. Indirectly there will be a multiple effect creating jobs in the local economy as more money is spent. Long term the number of jobs directly associated with the running and maintenance of the Barrage will be relatively small.

However lower estimates of the number of jobs have been suggested, with a short term peak of 3,744 (P. Bailey, Department of Civic Design, Liverpool University in a paper for Merseyside Trade Union, Community and Unemployed Resource Centre Research Group). This lower figure reflects spare capacity in the industrial sectors concerned.

The job multiplier would come from two areas:

1. An indirect effort, with inter-industry buying and selling in the local economy which may create jobs in other sectors.

2. An induced effect, with more money in households through greater employment, overtime, inward migration to Merseyside, and therefore more money being spent in the local economy. The long term employment benefits would come from further development of the tourist and leisure industries and any renewed economic confidence.


The immediate impact is likely to be negative. This will mainly be the result of slower ebbing and flowing of the tide which will mean river banks being uncovered more slowly, leading to a loss of feeding time for birds and higher pollutant levels. In the longer term the Barrage needs to be linked to a broader strategy for the Mersey, including major environmental improvements, as is envisaged with the Mersey Basin Scheme.

It should also be viewed in the context of a non nuclear energy policy. The Barrage will be a non nuclear energy source with a life span of at least 120 years. Apart from the positive merits of this in its own right, we should be looking at the possibilities of developing a “Barrage industry” locally with wider applications in this field.


Local authorities and the labour movement should adopt a positive attitude to the Barrage and attempt to maximise the employment and environmental possibilities involved. Issues needing further considerable include:

1. Maximising benefits to the local economy by:

a) some form of agree contract compliance to engage local firms and employ local workers wherever possible;

b) examining now what skills are required and linking up local deficiencies in the labour market with local training agencies’ courses.

2. Accountability and controls, especially with regard to the use of public funds; how should local councils be involved and should they be represented at board level?

3. How can the Barrage be linked to the overall development of the Mersey’s potential, including anti-pollution measures and the leisure and tourist industries?

Britain increasingly stands out in Western Europe for the poor quality of its educaiton and training. A lower proportion of 18 year olds are in full education and training and less go on to Higher Education than in most EEC countries. A key component of any effective strategy to reduce unemployment must be a major expansion of education and training provision and not just for school leavers. This is especially locally.

A long-standing weakness of the Merseyside economy is the shortage of skilled labour. The local working class is disproportionately composed of unskilled manual workers. A strategy for economic renewal must grapple with the lack of skills and adequate education and training provision. A major emphasis on education and training  initiatives has a number of advantages.

It links together the objective of job creation (or reducing employment) and economic modernisation. Retraining in more interesting and remunerative work offers the workforce an acceptable incentive to improved efficiency and job flexibility. It is one of the few areas in which positive discrimination in favour of women and black people is presently legal.

A longer term aim should be to abolish the MSC and return control of the bulk of education and training to local education authorities, with local boards responsible for planning training provision. This has an added importance with the threat posed by Norman Baker’s “Great Education Bill” (GERBIL) to the survival of local education authorities and adult education provision in local schools. A priority should be given to developing quality training programmes for groups in need (ethnic minorities, women, the disabled, and unskilled workers), to be integrated with the recruitment policies of major employers (public and private) and an enterprise development programme.

Another important issue with job creation potential is working time. This needs to feature far more prominently in trade union bargaining strategies in future, as has recently become the case on the continent. Bargaining aimed at a reduction in hours and increased leave has a number of important advantages. It has a clear job creation potential. It is a potential unifying demand: between higher paid and low paid, men and women and those in work and outside it.

Most people place far more value on the time they spend outside work. Thatcherism has given many of them more money to spend in it. The left’s traditional answer of higher wages achieved through collective bargaining is hardly a convincing alternative. Nor are Labour’s new apostles of share ownership and socialism as the ultimate expression of the freedom of the individual. A credible alternative needs to offer people something different: part of that could be a reduction in working time and more generally changes in the pattern of work.

The issue of working time is complicated and covers a range of problems. One area is the length of the working day and week, the length and frequency of breaks, holidays, etc. But it could also involve bargaining over the rights of part-time workers. Winning “full-time right for part-time workers” as the slogan goes, can be another way of reducing working time by making part-time work an acceptable option. Paid leave is also important. Bargaining over maternity leave has become more widespread. A new demand is for paid educational leave. This is commonplace in many professions, but the TUC is now beginning to argue for it as a basic right for all workers: not just for trade union studies or additional work related training, but in any subject people wish to study.


Women are heavily under-represented in the workforce as regards new technology except in low-paid and unskilled jobs. The figures are bleak – less than 3% of scientists, technologists and technicians are women, yet 94% of all women in the engineering industry work in the lowest grades.

There is known to be a demand by employers for more and more staff who are trained and familiar with new technology, but many women find that the training opportunities are not available. The Women’s Technology Scheme was set up with the aim of providing training for women in electronics and computing and increase the opportunties availabe to them.


The idea was first put forward by individuals involved in the Merseyside Trade Union, Community and Unemployed Resource CEtnre and in research into women’s education. A feasibility study was carried out into the possibilities of training for women in new technology. The study revealed the lack of training for women which was related to their needs and to the needs of local employers. Funding was sought to provide a realistic vocational training course for women and in April 1983 a charitable company was formed – Women’s Technology Training Ltd. The Scheme is now funded jointly through the Liverpool City Council and European Social Fund. It has a Management Committee of women, mainly from voluntary and local authroity education provision with staff and student representation. On the staff there are four electronics and computing instructors, an administrator, a coordinator and one part-time development worker.


The Scheme offers a one-year, full-time course of workshop-based practical experience and theory in electronics, micro-electronics and micro-computing. Also built into the course are maths, study skilles, women’s studies, health and safety, trade union studies and career advice. Trainees can start from the basics of learning to use hand tools an dhow to solder as well as learning keyboard skills. They progress on to assembling, testing and fault-finding projects and learn to use business applications packages.

Coursework for City and Guids Examinations Board and Royal Society of Arts Examination Board is completed in the training period. Exams may be taken during the course.

An important feature of the course is an eight-week, full-time work experience placement, spent with a local employer to develop the skills learnt on the training course. Trainees continue to receive their training allowance whilst on the placement.

Childcare facilities are an essential part of the course to enable women with young children to attend, and the Childrens’ Centre basedon the premises provides for most of the care of pre-school children and playschemes during school holidays.

At the end of the coruse it is intended that women will be able to work in such jobs as technicians or in computer operations and small systems management or to move on to further training. After the end of the the first year course, three-quarters of our trainees found work or further training.


The course is for women over 25 in Liverpool who want to return to work but have no, or few, qualifications. Black women and single parents are enouraged to apply. Recruitment begins in the autumn for the one year course starting the following Easter. All women coming on the course attend short pre-training courses to brush up their maths before starting on the full-time course.

Interest in the course is very high and, unfortunately, the 30 places available are not enough to meet demand. However, the Scheme has acted as a kind of focus for interest in training in new technology for women and has helped other training organisations and colleges to devleop more provision to meet the need.


Thatcherism has claimed that high unemployment is an inevitable consequence of the recession and a necessary price of economic renewal. This is not true. There are great differences in the level of unemployment between different capitalist countries.


HIGH (over 10%) – percentage of labour force

Belgium, 14.0%
Canada, 11.2%
Denmark, 10.3%
Italy, 10.1%
Netherlands, 14.0%
UK, 13.2%

MEDIUM (5-10%)

Australia,  8.9%
Finland,  6.1%
France,  9.8%
Germany,  8.0%
USA,  7.4%

LOW (under 5%)

Austria,  4.2%
Japan,  2.7%
Norway,  3.0%
Sweden,  3.1%
Switzerland,  1.1%

The common feature of the countries with low unemployment is that “not withstanding other factors, the existence or not of an institutionalised commitment to full employment is the basic explanation for the different impact of the current crisis” (Goran Therborn, “Why Some Peoples Are More Unemployed Than Others”). Therborn argues that for differing historical and social reasons, the countries of low unemployment, the countries of relative success, have a complete political commitment (from all parties) to full employment and have been able to confront crises of depression with a series of employment policy measures.

Leading Japanese officials and economists were almost unanimous in identifying the reasons for Japanese economic success: “first, a massive input into research and development; secondly, a high proportion of the populationg going on to further or higher education; thirdly, a sector by sector planning system that involves governments, management, unions and crucially, consumers; fourthly, a low proportion of spending going on defence.” (Chris Smith, Tribune, 4th December 1987).

In 1985 a Liverpool City Council report commented on what would be required to create 70,000 jobs by 1991, reducing unemployment in Liverpool to 5%. “It is impossible to forsee priate sector expansion creating jobs on anything like this scale. Therefore the responsibility for any serious attempt at reducing the unemployment figures will have to rest primarily with the public sector.” This gloomy view of employment prospects in the North West is mirrored in the “Regional Economic Prospects, Analysis and Forecasts to the year 2000.” (Cambridge Econometrics and the Northern Economic Research Centre, October 1987.)

“Decline is projected to be greatest in the North West region. Manufacturing losses have been, and will continue to be, at the centre of the North West’s decline, although neither public or private services have provided any alternative source of expansion.”

(percentage of 1986 level)



East Anglia: +24.2 / +88.2 / +15.9
South West: +24.2 / +83.9 / +12.4
East Midlands: +23.5 / +88.0 / +11.0


South East: +8.1 / +53.0 / +3.9
Yorks/Humberside: +7.25 / +52.8 / +0.5
West Midlands: +3.6 / +50.9 / -0.5
Scotland: +2.6 / +37.8 / -4.8
Wales: +0.7 / +36.4 / +0.2


Northern Ireland: -5.4 / +30.5 / -7.3
North: -5.8 / +33.5 / -6.3
North West: -7.2 / +28.5 / -7.9

UNITED KINGDOM: +7.2 / +52.5 / +1.6

Source: NIERC Projections, 1987

“What this amounts to is a strengthening of the North-South divide which has become increasingly evident since the end of the long post-war boom in the mid 1970s. The future contrast is likely to be between a booming southern half of the country and a slowly declining northern half.”

What would a coherent regional strategy for full employment involve?

1. National planning powers to control and move economic activity into the regions, linked to strategic regional planning.

2. Giving political and economic powers (strategic regional planning) to elected Regional Authorities, without weakening central institutions, but able to respond to national objectives. Expanding District Authority economic responsibilities.

3. A greater proportion of the national wealth being used to revive regional and local economies.

4. The dispersal of some major central government functions into the regions.

A Regional Authority would be an instrument of apparatus of the state and a democratic institution in its own right. Some degree of autonomy and fiscal independence would be needed to give it the potential for local economic and political initiatives and the ability to challenge external pressures. The experience of the Metropolitan Authorities in developing a strategic, overall view of a sub-regional economy, and their injection of new and creative ideas into tackling economic decline, has shown the need to have poliotical control over such areas.

Regional Authorities will have to develop new economic institutions. These would be responsible and accountable for research and planning in public, manufacturing and service sectors, public utilities, manpower/training needs, nationalised industries, the NHS, infrastructure development, and investment through local enterprise boards, enhanced regional aid and new regional financial institutions.

The trade unions must have a central role in planning at both regional, local, sector and plant level, as an extension of collective bargaining. They will need a training and support structure to match this wider industrial role. Planning agreements and the development of workers’ plans for enterprises and industries will be important area for trade union involvement.

The need to cream such authorities with the ability to respond to continuing economic and employment decline and with the powers for strategic economic development and planning, is vitally necessary to stem and reverse regional decline. Such institutions could learn a lot from the political style of the Metropolitan Authorities (from 1981 onwards). This style made them popular (hence their abolition), pursuing policies of involvement, accountability and openness, and an undogmatic willingness to change and evolve their policies and institutions to make them more effective.


What kind of form would a revival local economy take? As we have argued the public sector will play a crucial role: as a major employer, provider of services and purchaser and provider of goods. It will also need to take on a new or enhanced role in some areas; as the major vehicle for job creation in the short term and as a more active agent in the local economy, intervening in the market to assist economic regeneration in the private sector, encouraging the emergence of a new high-tech sector in local manufacturing, developing to the full the economic potential of the region’s cultural, leisure and tourist industries and training a labour force with a range of skills in demand in expanding sectors of economic life.

So while there may be an expansion of port-related industries and manufacturing employment this will tend to be in new areas, associated with leisure, tourism and the environment in the former and in high-tech industries in the latter, probably linked to research and development intitiatives emanating from the local high education sector.

These developments would not be problem free. While some new jobs created would be well paid and stimulating, others might not. Private services have a low rate of trade union membership and a tradition of low pay and poor working conditions. Some of the most fiercely contested local trade union disputes in recent years have been in this sector. Indeed following the experience of the “Reagan” boom in the USA, the government’s strategy for reducing unemployment rests to a great extent on creating jobs in this sphere.

A socialist strategy for regenerating the local economy will have to steer a difficult but unavoidalbe path between tolerating these kind of working conditions and alienating private employees whose support or at least commitment to local investment will be needed. Some kind of contract on the lines of planning agreements trading public sector assistance in return for trade union rights and decent working conditions would need to be negotiated.


Thatcherites often accuse the left of being indifferent to economic growth or efficiency. The reason is said to be our hostilitiy to the market. Clearly we must use markets where necessary, but not allow them to dominate us. The social and economic consequences for Merseyside of market forces have been pretty awful in the past and they aren’t doing us much good at present. The challenge for an alternative strategy is both to counterbalance market forces with other forces: the public sector and popular struggles; and where necessary and possible to develop alternative ways of measuring and securing economic efficiency than solely relying on the pursuit of profit.

The nature of the market in a capitalist economy and the changing structures of capitalism seriously restrict the effect of traditional approaches to public ownership and economic planning. In its place we argue for a different approach drawing critically on the experience of the economic initiatives of the recently abolished GLC and Metropolitan County Councils. One term which has been used to describe this approach is “popular planning.” We have reservations about this term, since it does not necessarily involve planning and may not be popular.

Alongside a stress on drawing popular forces into economic debate and decision-making, we believe in extending the role of democratically elected and accountable bodies in the economy. There is a need to establish a coordinated approach to economic regeneration between different and potentially conflicting forces, including trade unions and private capital, a characteristic feature of capitalist countries with low unemployment.

Since the 2nd World War the majority of Marxists in advanced capitalist countries have come to reject the notion of a centralised seizure of state power via revolutionary insurrection. In its place has emerged the idea of a revolutionary process, whereby over a period of time the state is transformed and working class hegemony is established through a combination of struggles inside and outside the state. This shift in attitude arises from a recognition of the growing complexity of the capitalist state and its ability to resist and rebuff a frontal assault; the need to win and retain popular support and create a genuinely democratic socialism and the possibility of using democratic structures, inside and outside the state to advance working class interests and power. In our view a similar shift is necessary in relation to economic strategy.

Captalist economies and the market are both more complex and powerful than we have at times recognised. A wider variety of mechanism for intervening in the economy exists than is sometimes recognised by the left and they are available to open to working class struggle. The struggle for control of the economy needs to being now, not after the election of a left government or the “acquisition of state power.” While elected bodies such as governments and councils can lay down broad objectives of economic policy, it is both possible and necessary for these to be complemented by a wide range of other forms of popular intervention in economic decision-making. These include:

1. Trade union bargaining over issues such as pay, hours, investment, product range, health and safety.

2. Consumer groups’ campaigns over prices, quality of goods, availabilty and durability of goods, e.g. the campaign over food additives.

3. The use of public sector procurement policies and contract compliances to affect the employment and trading policies of the private sector, e.g. the NHS and the limited list of drugs, council boycotts of apartheid goods, the demand for trade union membership and equal opportunities policies in employment as a condition for awarding firms council contracts.

4. Environmental groups pressurising public and private sector bodies over the effects of the poliocies on the environment, e.g. lead in petrol and acid rain.

5. The use of government statute to regulate the employment and trading practices of the private and public sectors, e.g. Factory Acts, Fair Wages Resolution, Wages Councils, rights to sick leave and pay, holidays and holiday pay, maternity and paternity leave and pay.


The left, and the British Labour Party in particular, have suffered from a chronic poverty of the imagination. The tactics deployed in political struggle or in power have been extremely limited. It is only in the 1980s, for example, that a number of local councils have begun to seriously explore the possibilities of the powers which they enjoyed other than their responsibilities for service delivery.

Some of the left are extremely dismissive of the economic initiatives of the GLC and the Metropolitan County Councils. and the use of parliamentary statute to regulate company practices. The Thatcher government does not appear to share this view. Its thirst for deregulation, the scrapping of the Met Counties, the attempts to outlaw the use of contract compliance and many other moves, show it to be well aware of the opportunities these provide for the left and working class struggle.

The difficulty here is not so much the intrinsic weakness of the various alternative forms of intervention in the economy, it is rather their diversity. This diversity is at once both the strenght and weakness of this approach. The strength is that unlike a central planning mechanism, it can respond to the diverse and diffuse forces at work in the market, with equal diversity. But if they are to achieve a measure of success in imposing popular imperatives on the market, a degree of coordination is clearly necessary.

This is both a political and a technical problem. It clearly involves constructing alliances between diverse forces and some perception of shared interests and requires specific mechanisms or structures to play coordinating role. In this pamphlet we suggest various bodies that can contribute to this – political parties, trade unions, local councils, central government and local economic agencies – as well as dealing with some of the problems involved in building alliances. This is not a problem with a once and for all solution, but one which needs to be constantly addressed and considered. Indeed it might be said to be the core of a contemporary socialist politics.

Recent years have shown that councils can play a more active role in the local economy and given us experiences of a number of different local “quangos” of the left and right, development agencies, development corporations and enterprise boards. In general we welcome the new economic initiatives of local councils and we would wish to etend the process locally both in local councils and other public services. This could include:

1. Local councils establishing a Public Enterprise Centre to promote the public sector’s role in the local economy through municipal and othe rpublic enterprises providing goods and services on the market to reverse privatisation and developing training to promote forms of public management and accountability.

2. Promoting a strategy of public sector procurement to support local economic growth.

3. Each public agency preparing an employment and investment plan and a purchasing and procurement plan, as a basis for expansion and a bargaining tool with the private sector.

4. Each public service agency preparing a serivce delivery agreement to extend accountability and the involvement of user groups and a community resource plan to extend skills and technology of the public sector to a range of social groups.


There is also a need for some body to formulate overall economic strategy for Merseyside and coordinate the activities of public sector agencies. It would need substantial funding – initially primarily from central government, and it should be accountable in the broadest sense to local people councils, trade unions, community groups, local businesses. This accountability should be real, not via appointment by central government or its surrogates, as is effectively the case in the NHS, but by some kind of elective process either direct or indirect, from local councils and public meetings of other constituent parts.

It would need to undertake a number of diverse roles:

1. Monitoring the investment and employment plans of major companies, establishing systems of “shadow planning” with trade unions and planning agreements on investment and employment with major loca firms in conjuctions with trade unions.

2. Promoting restructuring through merger, diversification, joint marketing; where appropriate extending public ownership and influence through acquiring shares in companies.

3. Supporting the establishment of new enterprises (including co-ops) and the expansion of existing ones with growth potential, which are export based or in important local sectors by devleoping a packages of financial assistance for training, investment, etc. and linking with the “prime movers” of the local economy and their purchasing and sub-contracting.

4. Developing the full economic potential of Merseyside’s cultural, leisure and tourist industries.

5. Establishing Merseyside as a major centre for education, training, research and development in conjuction with local councils, Liverpool University & Polytechnic. Some ideas are: supporting quality training in new technology skills; establishing a major Research and Devleopment Centre on Merseyside; establishing product development and marketing centres for the appliance of new products and production processes in undercapitalised firms and declining sectors.

6. Establishing an Economic Education Centre to promote public awareness of economic change, with an educational function, drawing in a wide variety of social groups and linked to the develoipment of socially usefull products, linking product development with social need.


In recent years Enterprise Boards have been established by local authorities in various parts of the country as a response to high levels of unemployment and economic decline, and the feature of the central government policies to tackle these problems. In setting up the boards it was recognised that investment in local enterprises had an important role to play in the regeneration of industry.

UK financial institutions prefer short term, low risk investments. One of the central objectives of enterprise boards is therefore, to tackle this problem by providing long term risk capital allied with other economic devleopment initiatives, which would include:

1. Business support and advice.

2. Development of Workrers’ Co-Operatives.

3. Investment in new and redeveloped property.

4. Training for new skills and expertise.

5. Technology transfer.

It has always been recognised that, on their own, enterprise boards cannot possibly hope to tackle all the severe economic problems facing their areas. This has been particularly true in Merseyside, where the problems have been more acute and the resources less available. Nevertheless, within the limits of resource constraints, they have been able to demonstrate pioneering new forms of economic development initiatives which are more cost effective than existing regional aid  programmes. If linked to an appropriate national framework of economic policy, the boards would have a major impact.

Such initiatives however should not be imposed from above. The strength of the enterprise boards lies in the fact that they play a catalytic role in forging links between the skills and resources of the local community and the expertise and finance of the private sector. The value of the boards lies in their variety and flexibility arising out of local circumstances, and this can only be meaningfully achieved by involving the wider community of interests in the process of policy development.

Follwoing the abolition of Merseyside County Council, which established the Merseyside Enterprise Board in 1983, the five district councils Wirral, Liverpool Sefton, Knowsley and St Helens are now all giving active support. To date investments totally over £2.5 million have been madein over 50 Merseyside enterprises supporting over 2500 jobs. With access to greater resources it is clear that much more can be done.

By entering into planning agreements with firms supported by the board, and by working with management and trade unions to ensure their wages and conditions are acceptable and that increased profitability is used to enhance job security and equitable rewards for all employees, MEB is showing that a genuine partnership does work.


The heart of the problem for Merseyside and the North as a whole is to find a new role for itself. There is no returning to the past and the immediate future appears bleak. Whole communities have been rendered apparently redundant by economic change. We do not agree with this view of the future, not only because we find it unacceptable, but also because we believe there could be a viable future for the region. The challenge for the left is to develop a vision of this future and suggest how we might bring it about.

We hae been critical of the limitations of a number of traditional “socialist” tools of economic policy and, perhaps in the eyes of some, unduly pessimistic as to the strengths of private capital. At this point, however, we want to briefly restate a few of the arguments against private ownership and capitalism and in favour of collective provision and socialism, in the context of thinking out a future for Merseyside.

One of the most distinctive features of the Thatcherite image is the stress on individualism and the role of self-interest and self-advancement in public and private life. This is not a new phenomenon in capitalist societies, but it has certainly been given an added impetus in recent years. The cult of individual self-interest is one of the most unpleasant legacies of the Thatcher year – not just in its direct political effects – but in its impact on the way people actually live in communities. From the widespread and incestuious thieving in most working class areas to the growing public squalor in our streets and major buildings, products not just of unemployment and public spending cuts, we can see the new ideology of self-interest and communal indifference at work.

One of the great virtues of socialist policies is its stress on the importance of collective interests and collective organisation. In our view, a precondition of creating a better life, particularly in our major cities, one in which people feel generally safe, relaxed and at home, is to promote a major resurgence in these socialist values and their practical application by people to deal with the kind of problems referred to above.

Another characteristic of capitalism, again enhanced by Thatcherism, is the pursuit of short-term profit or gain at the expense of all other considerations. This has already been a major contributory factor in the decline of Merseyside. Equally obviously it will not be possible to revive the region simply on the basis of pursuit of the quick buck. A traditional strength of socialism has been its stress on a longer term approach and the use of the public sector to achieve goals, which will be valuable in the long-term. This is of vital importance for Merseyside. Any strategy for recovery, while it should start now, must recognise the time it will take to recreate a viable local economy.

A third strength of socialism as against capitalism is its ability to take account of and work for benefits which cannot be easily quantified in economic terms, but to improve the quality of life generally. An obvious example is environmental pollution. There are economic gains and cost involved in cleaning up the River Mersey, but the biggest gains are not ones which could be calculated in profit and loss terms but relate to the pleasure local people could get out of it. Many of the elements in creating a new future fro the region involve bringing together both economic calculation and more intaniglbe social benefits in a way which socialism lends itself to more than capitalism.

We cannot map out an alternative future, a new vision. This is a procesw which needs the whole community. What follows are not comprehensive treatments of the areas concerned but can simply be seen as a few example, illustrations, ideas of how to go about thinking and working for it.


Who would want to live in London when they can live in Liverpool? Clearly work is a major reason fro the preference for the south east, but this is also a rather circular process, since many firms are based in the south east because of the preference of senior management and staff for living there. It is worth asking if this preference is entirely rational. The south east enjoys the dubious benefits of massively inflated house prices, gross physical congestion, the longest and most expensive travel to work, the least and the most boring countryside, plus higher prices in a wide range of goods.

By contrast the different parts of Merseyside offer some of the cheapest house prices in the country, great parks, a dynamic and cosmopolitan cultural centre in Liverpool, ready access to the Lakes, Peak District and North Wales, relatively cheap public transport and uncongested roads, quicker access to an international airport from most areas than to Heathrow or Gatwick from most parts of London. Why aren’t the yuppies all flocking here?

Apart from the availability of work, images of crime and deprivation still dominate outsiders’ notions of what Merseyside is about and act as a powerful deterrent to inward settlement. We believe that this is likely to change, howeve,r and the current decline of the north and growth of the south east will start to go into reverse, as the relatively cheap and spacious northern cities become the more “desirable” residences as against the “big smoke.”

In London, formerly rundown areas like the London Docklands have become the “in” place to live. A similar change could begin to happen to northern cities and government policy seems to be geared in this direction. Some of this change we welcome. We want Merseyside to be seen as an attractive place to live and work in, one of the new “Garden Cities of The North” (Tony Lane, “Liverpool, Gateway of Empire”), but we want it to be one that the current residents can enjoy, not one from which the “natives” have been removed to create space for the civilised settlers.


A great strength of Merseyside and Liverpool in particular as its cosmopolitan built on the combination of its role as a seaport and the diverse groups which have settled here and formed the local communities: Irish, Scots, Welsh, Chinese, African, Caribbean in origin. All hae made a distinctive input into the feel of the city. A major challenge to the future is how to build on that diversity, while eliminating the deep discrimination in employments, education, etc. which persists alongside great warmth at a community level.

More than in most parts of the country black people have been excluded from employment in the public and private sector, particularly Liverpool born black people. Compare the number of black people working at Fords, Halewood with Fords, Dagenham in London, or the number working for Liverpool Council compared with the number working for inner London boroughs. it’s scandalous! A major element in any economic regeneration strategy must be to secure implementation of effective equal opportunities policies throughout the public and private sector to end the historic exclusion of black people from key sectors of the local economy.

Equally, special training provision needs to be geared to giving black people access to higher professional and managerial posts. The local black and Chinese community are often portrayed as a “problem” or in more liberal versions of people “with problems,” rather than as a major human, social and cultural asset of the city.

A major part of the new future of Merseyside lies in the field of service industries particularly culture, leisure and tourism. Since 1981 we have seen a major expansion of talent among young black people locally – in poetry, dance, art, music and theatre. This needs to be systematically encouraged and promoted as a major cultural and economic asset of the city.

Chinatown is one of the most potentially attractive areas of the city. But there has been no systematic attempts by the local council to plan the development of the area. Indeed the previous council leadership seemed more concerned with removing local residents, seen in their opposition to the Nelson Street centre and the pattern of clearance under the urban regeneration strategy. This needs to change and we should follow the example of cities like Manchester, who have carried out a major improvement programme in their equivalent area. But this must not be at the expense of local residents. They must be involved.

A joint approach by the council, the local community and local business to improving the area could greatly enhance a major attraction of the city


Liverpool grew and declined with its port. If the possibility of some recovery in the commercial fortunes of the waterfront should not by any means be written off, this is not where the city’s future lies. Liverpool’s future lies in breaking with the past and becoming a different place. It is impossible to say what that difference might ultimately be but in the meantime it is imperative that the city decides what it wants to be now. Without some immediate and achievable goals the city will continue to decline and offer its citizens no other prospect than deteriorating public and private amenities.

The city does contain enormous strengths and, through capitalising on them, could so easily become the supremely attractive city of the north.

Liverpool constantly surprises people who visit it for the first time. They are impressed with the architecture of public and commercial buildings int eh city centre, with the qualities of the theatres and the Royal Liverpool Philharmonic Orchestra (RLPO), with museums and galleries. These places are no longer the icing on the cake. They are now a substantial part of the cake itself. After the talents of its people, these are the city’s best assets.

The established assets have been substantially increased with the development of the Maritime Museum, the Albert Dock and, soon, the northern extension of the Tate. Taking these new and old facilities together, Liverpool has the opportunity if it chooses to take it of becoming the unchallengeable second British city of the arts.

There can be very little doubt that the Tate will be a major attraction fo relatively well-off people and the only question is how the potential benefits brought by these people can be maximised. If the city itself is to get any benefit then visitors must be encouraged to find the whole of the city rather than one small part of its waterfront. But there has to be something in the city over and above what can be found in any other sizeable town. The key here is not the standard retail services, but the special and distinctly local services that can be provided if local talents were encouraged and supported.

Liverpool has an international reputation for its communities of popular musicians and cabaret artists, its playwrights and poets. Less well-known but often equally talented are Liverpool’s artists and fashion designers. It is from within these communities that a future for Liverpool can be found. Through their creativeness, the benefits of the physical cultural assets may be multiplied.

A real attraction for the Tate visitors might well be the possibility of buying original works of art at reasonable prices from able local artists. the city, however, would need to have its Bond Street, a place with shop-front galleries, a “cultural quarter” that provided other sympathetic services. The obvious district is Bold Street which was once known as Liverpool’s Bond Street. This district has noticeably changed in its usage. Along with Hardman Street, Berry Street and Nelson Street this part of the city already specialises in restaurants, bookshops and houses one of Britain’s best known picture framers! The city, furthermore, owns many of the leases of unlet premises in Bold Street and this should make it easier to subsidise shop-front galleries indirectly.

These latter are small suggestions. Others of similarly manageable scale could also be put. Training scholarship linked to into-business grants and loans might be offered to fashion designers and up-market clothes manufacturers, to young chefs and pastry cooks. The city’s own College of Further Education already have departments with established reputation in design and catering.

What is needed is a series of relatively modent scheme with clearly defined objectives which can be linked to an overall development strategy. Such a strategy would obviously benefit from some high profile activity. Perhaps the opening of the Tate would provide the chance for Liverpool to stage a popular cultural alternatives to the high culture of the Edinburgh Festival?


The aftermath of bus deregulation has emphasised problems that could have been avoided had a proper coordinated transport policy been formulated by past governments. Instead competition between bus (and in the past tram) and rail routes, brought about a rapid closure of suburban railway stations in the 40s and 50s. We believe that by coordinating road and rail so that each does the job it’s best at, the community will benefit, as has happened in most European cities, both East and West.

Railways, post deregulation, have done quite well, with passenger receipts on Merseyside on the increase. But there are still large gaps, mainly in Liverpool, with rail lines but no stations. If stations on these routes could be opened then larger areas of the inner and outer suburbs would be within quick and easy reach of the centre.

Examples of routes are: Lime Street to Crew line; Wavertree and Sefton Park; Central to Hunts Cross line; St James.

The goods only line from Edge Hill to Bootle, known as the Bootle Branch, had passenger stations up to the 50s at Edge Lane, Stanley, Tuebrook, Walton Breck Road, Anfield and Spellow Lane. Reopening this line and incorporating it into Merseyrail network via electrification would fill a large gap in this part of the city. Certain railway stations would be designated as interchange stations and buses would terminate there covering areas of the city and suburbs without stations, so avoiding duplication. While appreciating that a good deal of political will is needed before this could come about, we should be aware of what is possible.

Coach operators pay less road fund licenses than the private car owner. Business vehicles cost the tax payer approximately two billion pounds a year in subsidies. Local authorities pay for many road schemes together with maintenance, fencing, etc. Policing of roads is paid for externally. So, whereas the coach operator only has to pay for his vehicle, licence it, fill it up with diesel, provide a driver and maintain it, British Rail has all this plus the cost of the infrastructure, spearate police force, complex signalling, secure fencing to prevent the public from trespassing, etc.

Despite all the money being poured into road transport and motorway capacity increased so that even more foreign imported cars and lorries cna overburden them, the problem of congestion has not been solved. It never will be as long as the railways take second place to roads.

A new scheme planned for Manchester, based on one already in use in Tyne & Wear, is the LFT (light rapid transit) network. This involves a light overground rail/tram network covering the inner city and city centre using the existing rail networkplus laying tram lines in the city centre. A similar scheme for Liverpool would have considerable advantages, in ease of transport for local residents and tourists and in reducing traffic congestion in the city centre.


Deregulation of the buses has brought out familiar aspects of Thatcherism with unrestrained competition between different bus companies in the quest for profit. Despite its faults, the previous system was a good, cheap and regular service. Because fares were subsidised they actually came down after Labour won control of the County Council in 1981. But despite this and an excellent propaganda campaign against deregulation, there was very little opposition to deregulation and it went through very easily.

As with other services there needs to be education of both drivers and the travelling public. There was and still is large scale abuse of cheap all-day “scratch-off” tickets. People don’t scratch the date off, so they can be used again. Drivers didn’t check them because they “subsidise anyway.” So despite the cheap fares policy the wrong fares were being paid, reflecting a lack of commitment to the service.

The transort unions were poor at communicating with the travelling public, a precondition of forging any alliance. This could be seen during industrial disputes, when the travelling public weren’t told what the dispute was about. Indeed it seemed there was an unwillingness to tell them, reflecting an attitude the “industrial muscle” can win on its own. Despite the good work of some full-time officers and shop stewards, the public more often than not, would not know why “the buses had stopped” and would inevitably blame the unions.

What has deregulation meant? The joint boards, consisting of councillors from the districts of Merseyside and representatives of the private bus companies, such as Merseybus, North Western, Crosville, etc. have limited authority. They are financed through the various councils by the government. They administer grants to private companies to cover pensioners and school passes, as well as zone and cheap-day tickets. They also run a minority subsidised service.

The limited powers of the joint boards were shown by the initial chaos on the introduction of deregulation, followed by substantial fare increases. This has meant, for example, that a family travelling from Kirkby to Liverpool and back could pay £5 or more.

Deregulation has also brought aggressive management. The dispute with Crosville was cause by management’s insistence that the drivers operate a number of buses with a type of steering the drivers maintained was dangerous, especially turning bends. The drivers offered to operate all the other buses while the issue in dispute went to arbitration. Management refused, causing the drivers to strike. After a number of weeks, having sacked the drivers they closed down and moved on. This was after pocketing large subsidies and left routes uncovered.

Deregulation has forced the unions to argue for higher fares and to scrutinise zone and cheap-day tickets. If they don’t jobs will go as the profit motive operates. There is a tragic irony in this. Concern to run an efficient service and examine zone and cheap-day tickets was much rarer under the subsidised MPTE service. In fact the TGWU are now urging that “scratch-off” cheap-day tickets be scrapped because of large scale abuse. Deregulation seems to be trapping the labour movement in a Catch 22!

We should argue in the long term for the restoration of a cheap regular, subsidised council run bus service, integrated with an efficient, expanded Merseyrail. But the reality of deregulation now must be accepted and its contradictions and it must be said positive features debated and taken on board.

Positive action can start now. Liverpool Trades Council has an excellent Transport Committee bringing together trade unionists within the transport sector and othe rusers of the services. This could be copied by other Trades Councils on Merseyside. The objective should be to build an alliance between workers in the service and the travelling public, taking up the problems that exist now and working for the longer term aims we indicate above.

* * * * *



The re-election of Thatcher has heralded a new wave of attacks on the welfare state and local democracy. All the signs are that the third term will involve a more systematic attmept to dismantle and restructure the welfare state. Despite the rhetoric of the radical right and the widespread concern on the left at public expenditure cuts, Thatcherism to date has been relatively unsuccessful in reshaping the welfare state in line with its vision of selective provision of services and property-owning democracy.

Poverty has risen sharply in the last few years, but this is primarily a consequence of unemployment and recession rathe rthan cuts in the social wage. There have been important cuts in health, housing and education, to name only three, some open, some more concealed, but the effects of these take time to show. Some of these are now becoming apparent, thus the mountaing crisis in the NHS. Others have been temporarily held at bay.

Local councils have frequently acted as a shield against the cuts, although frequently at the cost of big rate increased and growing indebtedness.

Public sector unions, more resilient and combative than their counterparts in the private sector, have played  an important role in protecting jobs and services and proved a serious obstacle to government plans. The government has faced serious obstacles to the privatisation of welfare, in public opinion and the nature of the services themselves.

Privatising the welfare state is more difficult than selling shares in nationalised industries. The sale of council houses, one of Thatcher’s successes, is an exception. Like gas and telecom it is possible to sett it in small units. Unlike the NHS it is politically acceptable to do so because people are used to the idea of paying for housing. Small scale operators (and big ones) have found it difficult to compete with established institutions like the NHS and local councils, without financial subsidies from central government. Equally it is still politically unacceptable to large sections of the population to charge for certain services )wintess the outcry against charging for dental and optical tests).

Privatisation of welfare has also conflicted with Thatcherism’s monetarist objectives. It requires more not less public spending. So private nursing homes for the elderly get massive subsidies via the social security budget. Will the government be able to overcome these obstacles in its third term, create a viable private sector able to compete with the public sector, defeat the public sector unions and overcome the destruction of Labour councils?

The government intends to grapple with the challenge represented by Labour’s continued base in inner cities and the north. An important element in its strategy will be to remove Labour’s power and influence in local government, partly by political struggle and partly by legislative and financial measures. In the run up to the General Election the Tories waged a very effective political campaign against Labour’s “loony left” in London. If the latter was the ostensible target, the overall aim was wide, embracing local government and the Labour Party as a whole and it hit its mark.

Opposition is beginning to build up against the government’s plans for local government, embracing a wide range of forces, including a significant section of the Tory Party. We can expect a new version of the “loony left” scare to be launched at Northern Labour councils, with the aim of weakening and dividing the opposition and putting it on the defensive. In the face of this we need to take care to be firm, but also sensitive to what people at large are feeling and thinking.

Four major themes dominate the government’s agenda: regeneration of the inner cites, education, housing and local government finance. The government’s strategy for the inner cites is not just economic. It aims to change the social and political base of inner cities in its favour, at the expense of Labour and the current population. Its other plans for education, housing and the Poll Tax are in line with aim.

The plans to allow schools and council tenants to “opt out” are aimed at drawing tenants of the better housing stock and schools into more affluent areas, out of the council sector, creating a two-tier system of provision and further increasing the financial pressure on local councils. Their effect, along with the Poll Tax, will be to regulate councils to a minimal role as the provider of residual services to a limited group of people, lving on the poverty line, the new “sub-class” of Thatcher’s Britain. Apart from its effects on council finances the Poll Tax could well offer the Tories an additional electoral bonus. Young people and the unemployed are likely to attempt large scale evasion of the tax by, amongst other things, not registering to vote. The phrase “a property-owning democracy” could acquire a new and sinister ring as non-householders opt out of the voting system.


Finance for local government services comes from four sources:

1. Grants from Central Government; Rate Support Grant.

2. Domestic Rates based on rental evaluations.

3. Commercial Rates based on rental evaluations.

4. Charges and Rents for services.

In 1987/88 under half of the cost of local government is paid by Rate Support Grant. This contribution has been decreasing, as part of the government’s policy of reducing public expenditure, from about two thirds of total costs in 1979. The last review of the rateable value of property was in 1973 in England.


The government argues that the present system is outdated an unfair. The opposition parties would not disagree with this. However the government’s indicated in the Green Paper “Paying for Local Government” (January 1986), that the Community Charge (Poll Tax) is the only option for change. This is based on a number of criteria:

1. To expand the number of contributors from the 15-18 million now paying rates, to all 35-37 million electors.

2. By such direct contribution to the cost of services to make local councils more accountable to their electors.

3. To abolish local business rates and replace them by a Unified Business Rate (UBR) which will be set and distributed nationally.


The Bill introducing the Community Charge was published in December 1987. In Scotland, where the charge is already legislated for, it will operate from 1st April, 1989. In England and Wales it will be introduced without a transition period on 1st April 1990.



Local authority spending on local services, minus Rate Support Grant and Unified Business Rate money gives the Balance Outstanding.

Therefore Poll Tax per adult (a flat rate) = Balance Outstanding times Number of adult residents.

To this flat rate will be added the Poll Tax receipts from County Councils and/or Joint Boards.


a) Personal Poll Tax.

b) Standard Poll Tax levied on second homes in addition to a).

c) Collective Poll Tax levied on owners/landlords of multi-occupation or short-term accommodation.

d) Possible Water Poll Tax to replace Water Rates (this would increase the average Poll Tax by about 30% to provide revenue of nearly £2 billion per year).


a) Everyone over eighteen years of age including foreign naturions;

b) Full-time students will have to pay about 20% of the Poll Tax rate at their short-term address.


1. Convicted prisoners.

2. Long-term patients residen tin NHS hospitals.

3. Severely mentally handicapped people (Scottish Act).

4. Under 19 but still at school or in further education.

5. People in care.


The figures are based on councils continuing to spend at present levels. Minister have decided to redistribute central government grants to prevent sharp increases or reductions in the total burder of each council’s local taxation over the first four years, i.e. provide a “safety net.|

Liverpool’s average rate bill per household = £500.


Band / Non-safety net / Safety Net (Actual payments in 1990) / Assuming 20% evasion on Safety Net Amount…

1 / £301.00 / £263.00 / £329.00

2 / £602.00 / £526.00 / £658.00

3. / £903.00 / £789.00 / £987.00

4. / £1,204.00 / £1,052.00 / £1,316.00

and so on…


Average rate poundage, 322.9p
National rate poundage, 224.1p
Percentage change, -30.6%

Liverpool firms will be £17.5 million per annum better off with the Unified Business Rate. Thus the council’s income from the business sector will go down from £104.8 million to £87.3 million resulting in a heavier Personal Poll Tax for adults living in Liverpool.


District / Average Rate Bill (household) / Non-Safety Net (1 adult) / Safety Net (1 adult) / Safety Net (2 adults)…

Knowsley / £517 / £267 / £256 / £512

St Helens / £447 / £243 / £225 / £450

Wirral / £542 / £246 / £280 / £560

Sefton / £500 / £210 / £242 / £484


1. The most obvious criticism made by many analysts is that the Community Charge redistributes income from the poorer members of the community to the richer members (Robin Hood’s philosophy in reverse). It is a regressive tax and is unrelated to people’s ability to pay. The Institute of Local Government Studies’ survey shows that those on less than average wages will be worse off, while those on more than average wages will be better off under the poll tax. Their survey in Darlington indicates that 53% of families in terraced housing will have bills up by more than 80%, while 85% of families in the biggest houses would be given reductions of 40$ or more.

2. Householders on Income Support or Family Credit will pay 20% of the Poll Tax, but their benefit will be increased by 20% of the national average Poll Tax bill. Thus in above average Poll Tax authorities hundreds of thousands of the poorest families will pay up to £4.30 per week in above average Poll Tax bills. At the UK Social Services Conference held in Glasgow on 23rd September, 1987, it was hinted that this compensations of 20% of Poll Tax may only be temporary, as the Treasury have indicated tha tit is intending to claw back the £300 million at stake, by not increasing benefits full in line with inflation in future years, and therefore there is a cut in real incomes for benefit claimants. Young people (18-24) coul d be particularly badly hit if they are only entitled to rebates at a lower rate.

3. Women are likely to be hint in a number of ways:

* Women in refuges could end up being taxed twice;

* Low paid or unwaged women living with a man will find the payment of Poll Tax intensifies dependence and therefore could try to remain anonymous and disappear from the electoral register;

4. Nurses living in nursing hostels, especially trainee nurses will be faced with the tax, and unless Health Authorties foot the bill, they will find payment a tremendous strain on low income. One effect could be to force nurses into the private sector.

5. “One of the groups worst affected will be families with older children or relatives living at home” (Low Pay Review). There could be a growing number of young people leaving home when they come of age, and at the othe rend of the age range a reluctance to share a home with an aged relative because of the financial pressure of the Poll Tax, espeically on low income families. The government’s policy of moving long term patients into the community or with relatives at home, will have serious financial implications for the cares and the cared for. The Poll Tax is not paid by patients in residential care, but will be paid once peoplare are cared for in the community.

6. The registration of every adult in an area poses a very real problem for civil liberties and democracy. The need for the Registration Officer to keep a Poll Tax register would lead to the need for idenity cards and/or identity numbers, and draconian penalties for avoidance of registration. There will be an initial civil penalty of £50 for failure to register, followed by a £200 pentalty for continued failure, and finally prosecution under the theft acts.

A new class of non-persons could emerge, especially in the 18-24 year old range, with people staying off the electoral register and avoiding being picked up by cross reference of public and personal data. The Chartered Institute for the Scottish Office believes that personal identification numbers will be necessary to keep a check on transients and avoid confusion between people with similar names.

The National Council for Civil Liberties argues that the government should put in the following safeguards:

* “And undertaking, backed up in legislation, that no Universal Personal Identifier will be allowed to develop and that no national database on the population will be created.”

* “The electoral register should be specifically excluded from the proposals. No names should be transferred from the electoral register, in order to protect the overriding principal of universal franchise.”

(Cvil Liberty Briefing, NO. 7, October 1987).

7. The bureaucracy and cost of collecting the tax will increase. Only 1% of income is lost in collecting the rates. It is projected that evasion of the Poll Tax, both intentional and non-intentional, will be 20% (the government puts the figure at up to 5%). The Lothian Authority estimates an increase of 90 staff and Strathclyde an increase of 250 staff, to cope with registration. The Shadow Environment Secretary estimates the extra cost to local authorites of extra staff and computers to be at least £350 million (the government estimates between £160 and £200 million).

8. The Unified Business Rate will be set and distributed nationally. The income that local authorities will receive from local businesses will bear no relation to the services provided and the needs of the area, as the national distribution will be done a per capita basis for each authority. THe 1985 Cambridge University Study, “The Effect of Business Rates on the Location of Employment,” commissioned by the Department of the Environment concluded that there is “no evidence that either the level  of rates or the increase in rates the distribution of employment between local authority areas.”

9. Local democracy and autonomy is further undermined and weakened by centralising this part of local government income (the UBR), bringing up to 80% of income under central government control. The control over local spending is further increased because the system will be geared to penalising councils not fonforming to central spending norms, e.g. 10% over-spending will produce a 40% increas in the Poll Tax rate.


Most of these developments will be gradual. We will not see a simple “privatisation” of most welfare services, although some, such as street cleaning are under immediate threat. Instead we can expect a slow but steady shift in the mixture of private/public interests in favour of the former. The erosion of local democracy will continue. There will be a growth of unaccountable and ultimately authoritarian structures controlling services – often posing under the populist mantle of “choice,” with a well aimed critique of paternalism and inefficiency in local government. Many of the proposals are likely to prove pouplar with local council tenants and parents, given the real failings of both state education and council housing.

If the welfare state has survived in one form or another, it has been unable to respond to the massively increased demand for services generated by rising unemployment and poverty. Clearly local council will face major problems over the next four or five years. In part these are a result of rising demand and public spending cuts. But they also reflect deep-seated problems with the welfare state and social democracy. One of the ironies of contemporary politics is the sight of a left which spent much of the 80s criticising social democracy’s paternalism, sexism and racism, becoming the current defenders and administrators of the welfare state. In the process previous criticisms have often been forgotten.

There is deep dissatisfaction with the way public services are run which the Tories are only to willing to exploit. The attitude of councils to consumers of services has often been dreadful. Bureaucratic and inefficient services have exerted a high political cost. The politics of service delivery are a key battle ground over the next few years. If opting out and privatisation are to be resisted, councils will need to place a premium on efficiency and consumer satisfaction. In many cases this will need a big shift in the attitudes of councillors, officers and the workforce.


Of all the public services, public sector housing has borne the greatest real attacks and resource cuts under Thatcherism. Between 1979 and 1987, national expenditure on housing has seen a 60% reduction.

This has been coupled with three other key policy objectives for the Tories: the expansion of owner occupation, a belated rescue attempt on Britain’s declining private sector and the dismantling of local authority hosuing, leaving councils with a supported policy and strategic role, but effectively no role at all.

For Merseyside local authorites, the net effect has been a drastic decline in capital for new housing construction as borrowing limits have been reduced. The right to buy has had a steady impact with the better council stock passing into owner occupation but largely without any replacement through new building.

The other aim of the public – sector housing associations – have not escaped from the thrust of Government policy despite their popularity to date with the Tories.

In many respects the Tories’ attack on public sector housing has been the easiest to achieve. The bureaucratic, paternalistic and authoritarian nature of council housing, combined with a poor, often highly inefficient service, has made this sector an ideal element (from the Tories’ standpoint) to demolish. Resistance from tenants has, not surprisingly, not amounted to very much. By and large, council housing is not a product or service which its consumers have wanted to defend. Health and education services are used by the whole range of the population, including the more affluent sections on whose votes the Tories depend. Public sector housing consumers are amongst the poortest in economic terms and have the least political clout. The Labour Party, the main supporter of socially owned rented housing, has had little positive to offer. It is increasingly recognised that Labour Party housing policy has helped Thatcherism’s drive towards a more private and individual housing policy.

Liverpool under the Labour council of 1983-87 ilustrates this very well. Their policies were extreme by the standards and practice of other Labour authorities, but they represented the extreme end of the same approach. In this the local authority’s role was to deliver rented housing and management and maintenance services. The tenants, people on the waiting list, and communities affected by any housing or environmental programmes had no role other than to wait their turn patiently for whatever it was that the remote town hall bureaucracy decided they were going to get, and then pay their rent on time.

That is not to say that the Urban Regeneration Strategy which Labour launched in Liverpool in 1983 was wrong in  princple. Action on an area basis to tackle the worst of the council stock was long overdue. But hte process and the method were wrong. The views of tenants were ignored. The idea of “community” was seen as some sort of irrelevant anarchronism. If there has been grass roots opposition to housing policy, in Liverpool it was not against national, Thatcherite policy, but resistence, albeit in small pockets, to what the council was doing. Most of this came from Liverpool’s housing co-ops, which were blasted by the then Labour leadership as a class enemy, and Thatcher’s agents in the destruction of the public sector. But while the Council Housing Investment Programme was slashed, and extortionately expensive deferred purchase lonas were taken out to feed the capital programme, the anti co-op policy actually sent substantial government housing grants back to the Treasury.

Labour decentralised housing management services during this period and attempted to grapple with the problems of improving housing maintenance. Action on these fronts too was long overdue. But whilst tenants may have seen some improvement, the new approach is a far cry from the type of intensive, sensitive and participatory management that many of Liverpool’s estates need if the tide of decay is to be stemmed. The signs are already here. The most notorious example is the Windermere Green estate in the heart of Liverpool 8 – some 230 houses purchased “off the shelf” from a volume builder in the first year of that administration. Today, many are already vacant and tined up. Drug trafficking and crime are rampant. The lack of repairs is glaring. No additional provision are made in the maintenance budge for new housing stock. This represents mismanagement of public resources and the consequences are to turn an area of housing into a social nightmare for its residents.

Starve of capital finance, with reducing levels of revenue for running costs, Merseyside’s councils face new threats to their housing stock in the form of the new Tenants’ Right to Choose – the Pick a Landlord legislation in the current housing bill and the introduction of Housing Action Trusts. These will be quangos modelled on the urban development corporations, and will be set up to take over, improve, hold and then transfer council housing stock to new owners. The proposed abolition of rate fund contributions to Housing Revenue Accounts will make it increasingly impossible for councils to provide even a half decent housing service. In Liverpool’s case, the rate fund contribution is equivalent to rents collectd from tenants. Once it goes, the effect will be to reduce the HRA by 20%. However, once debt charges have been taken away from the HRA, it will mean a cut of some 50% in income for hte management and maintenance unless rents are substantially increased.

In this context it is hard to see how a better relationship can be achieved between tenants and their council landlords to the extent where tenants will not want to see if another landlord might be a better be. The signs are that property transfers of this type will not involve any new capital finance for any major works that may be needed. Unless rents are increased (which the new Housing Act will facilitate through assured tenancies) the housing associations or tenant management co-operatives which take over any stock will have to manage and repair within the same budgetary constraints.

Even an upturn in the region’s economy will not soften the inevitable social consequence of this policy direction. Those tenants who are currently jobless but who may in time find work and therefore the income to escape into owner occupation, will not be tempted to purchase their existing accommodation if it is in poor condition or in a socially unstable area, but will make an exodus into the better neighbourhoods. The worst estates will be increasingly the marginalised habitat of the elderly, the jobless and those whom poverty and no real prospects have alienated from society to the extent that they turn to crime against their more vulnerable neighbours. If there is an upturn in the region’s economy, such estates, whether in the inner or outer areas, will become ghettos of massive social instability.

There are no signs that even the proposed Housing Action Trust will provide any sort of solution to these problems. The Government is talking of four or five HATs nationwide, and in the third year of the programme, a total capacity outlay of £120 million. Liverpool City Council estimates that stock outside its Urban Regeneration Strategy will require repairs expenditure of some £300 million. If the HATs do not provide any glimmer of a solution, what chance is there of the private secot providing a remedy given the sheer scale of the problem in Merseyside.

The prospects are bleak. The possibility of successful resistance to Thatcher’s housing policies is slim and given the political strength of Thatcherism, mass, national support for adequate social housing provision, especially in the north and the north west is a mere pip dream unless a new socialist policy direction can be quickly developed and fought for.

Such a policy direction will need to star again from scratch, throwing out the scared cows that the left has clung to. Central will be the need – almost too late in the day – to recognise and insist on full consumer and neighbourhood control over socially owned rented housing, with real choice over standards of design, construction and management and maintenance services. Public rented housing will need to be made and perceived as desirable and attractive. The tension between tenants as consumers and the servicing workforce will need to be resolved once and for all, with an acceptance all round of the sovereignty of the tenant as a consumer.

While the fight for adequate resources will continue to be paramount, policy markers will also need to recognise the enormous resources that tenants themselves can bring into situations where they feel that they are in control of something which is worth the effort and which is worth defending. If the voters’ consciences cannot today be stirred by the glaring inequality and poverty which exists in areas like Merseyside, then a new political angle which does have mass appeal must quickly be found.

The condition and quality of the nation’s environment is one policy area which is starting to move towrads the top of the national agenda. If it is the case that investors are beginning to find Merseyside attractive, then it will be in their interests too to ensure that housing, as a key element of the region’s environment, is not a national disgrace and that the potential social instability which is an inevitable consequence of Thatcher’s direction does not threaten to undermine investment.

A pluralistic approach to housing provision will also be a fundamental element of such an approach. Vast tracts of council estates are in themselves an unsatisfactory approach, however attractive the built form is, which is not in fact the general case. The economic implications on a neighbourhood basis are hardly conducive to small businesses, corner shops, etc. being formed. If the population of an area has little spending power, because it consists primarily of the unemployed and economically inactive, there will be no money to spend on anything but bare essentials. Hence, a better social and economic mix in run down areas will not only increase social stability but have a positive regenerating effect on the local economy. The planning and development of housing, on a mixed tenure basis is crucial in this context.

New alliances also need to be forged across the board, especially with those sections of society which have some political clout. The extent to which middle class dissatisfaction with the health services has succeeded in influencing government policy is one of the few rays of hope to emerge in recent times. It is very much in the interests of residents of more affluent areas that dilapidation and consequent social unrest do not spill over from more disadvantaged neighbourhoods, but his has to be combined with making socially owned rented housing be perceived as attractive and desirable. The building industry, and its various associated professions too have a big stake in an adequate housing policy.

The aim has to be to ensure adequate standards of housing and environment by whatever means are available, using whichever agencies have the resources to deliver the goods. That will mean that local authorities will have to take on the strategic role that Thatcher is forcing on them directing both socially owned agences, such as housing associations, and the private sector, within the programmes which they, as democratically elected representatives have decided, in a framework of real consltation and participation with tenants and the community.


Liverpool Council under its previous “left” leadership had a dreadful record in terms of street cleaning and housing repairs. A welcome development under the new leadership is the sighn that this is being confronted more openly. But there should be no illusions about the difficulties involved given the combination of financial crisis, opposition from some sections of the workforce and government privatisation plans.

One response to these problems is to call for a return to the previous tactics of Liverpool Labour Party of “defiance” of the government. The Communist Party was a consistent opponent of these tactics. At the tiem we argued that any “political strategy based on the financial manoeuvres of a local council … will exclude the mass of the people” and give “pride of place to the actions of a relatively small number of councillors.” Such an approach adopted nationally would “see Labour councils left high and dry” and “councillors backing off as the deadline for setting a rate approaches” (Steve Munby, Marxism Today, September 1984).

Our productions (unpopular at the time), were spectacularly confirmed a year later, with the issuing of 30,000 redundancy notices, followed by secret deals with Swiss finances and the disablement of Labour councillors. There is no way that there is a basis for repeating such suicidal tactics. Memories of mass redundancy notices are still fresh in most people’s minds and the national context is even more unfavourable.

In the medium term local councils will have to attempt to operate in the budgets available to them. This will clearly mean that in some cases they wil introduce cuts. This is unavoidable. They should be open about it and not try and dress it up in fancy names. They must develop clear priorities for council services and spending and disucss these openly with trade unions and consumers of services should not denounce them as “traitors.” This does not mean accepting each and every cut (although it does mean not automatically opposing them), but where they are opposed making the government the focus of atack.


Public sector unions have been a major element in the resistance to Thatcherism’s attack on the welfare state. They will play a major role in the coming period as well as facing big challenges. The 1980s have seen a wave of conflicts between council union and Labour councils. A major element has been the pressure placed on both by public spending cuts. Undoubtedly as well as some councils and councillors have adopted completely unnaceptable and authoritarian attitudes towards the trade unions (few more so than in Liveprool in the past), arguing that because they are a “socialist council” they should be given unconditional an duncritical support.

But soem council unions have also adopted the attitude that if they’ve got a socialist bos then anything should go for them. Left wing Labour councils have been seen as an easy target, potentially vulnerable to moral or political pressure where collective bargaining won’t work. The long term consequences of this have been damaging. It has undermined the independence of council unions, substituting in its place corrupting avenues of access to power via the internal workings of the Labour Party. The influence enjoyed in the Labour Party and Liverpool Council until recently by certain branches of the General and Municipal Workers was completely unacceptable and has acted as a cover fo rthe worst forms of corruption, inefficiency and waste in certain sectors of Liverpool Council.

These are obviously extreme examples. But it is clear that if council unions and public sector unions generally are to survive as a major force and project jobs and services, big changes in approach are needed. The starting point must be the defence of services and jobs – in that order. Defence of services means opposition to avoidable spending cuts and much more. It must involve working to maintain and improve services and eliminate waste and inefficiency, including the long lunch in the lost alehouse.

The unthinking defence of sectional interest must be resisted. The defence of arrangements, convenient to a particular group of workers, but bad for the service as a whole, cannot be supported – particularly when this masquerades as defence of jobs and services. Some council unions have a clear position of working to improve services. Others have a different attitude, while others say one thing and do the other. It will be hard to win support for this shift in attitudes and practices and frequently unpopular. But it must be done.


There are major long term problems which must be considered in relation ot the role of public (and private) services. There is a trend in advanced capitalist countries for employment and expenditure in this sector to grow. There are a number of reasons for this. One cause is the slower growth of productivity in services as against industry. There is also a problem of growing and diversifying demand for services. As the struture of the working class has become more diverse economically, socially and culturally – so the demands placed on services changes. This has meant that that state is confronted by growing financial pressures and more complex management tasks.

One solution to the problem is the Thatcherite agenda of reintroducing market transactions to deal with the diversity of “consumer” demand and restrict costs. The left needs to come up with an alternative of its own. It is no longer possible to go on as in the past. Democratisaation and decentralisation of services are part of the answer, but only go some way of addressing it. We need to ask if direct labour organisation of public services is necessarily the best way of guaranteering efficiency and keeping costs down. Might co-ops franchised and supervised by public bodies do a better job?

More adults are now involved in the care of the elderly, disabled or handicapped relatives than are looking after children. How do we respond to this vast shift in the nature of social need?  The crisis in “care” represents a major challenge for socialists and one which requires considerable thought. We must avoid solutions that rely exclusively on the labour of the family concerned (the Thatcherite ideal) or on the paid labour (the traditional socialist response).

The approach we should develop is one in which the state – local council/NHS – can assist the person in need to care to have access to a range of options, including institutional care, relatives’ care, voluntary aid, paid care and autonomy based on physical aids.

Local councils need to look ahead at how to tackle these major challenges: the growth in demand for care, the low productivity of services, the need to improve efficiency and responsiveness. The ability on the left to solve these problems within the framework of collective provision, as against a private sector solution, may be a decisive factor in determining the future shape of British politics. An important task for the Public Enterprise Centre we proposed creating earlier, would be to develop a major research project in conjunction with local voluntary bodies, the University and Polytechnic to look at these problems.


Liverpool has a long tradition of religious and political sectarianism. One of the great tragedies of local politics is that just when the roots of this in religion began to disappear, new and equally vicious forms of political sectarianism have emerged to dominate politics. This is a particular problem in Liverpool, but its effects have spread to othe rparts of the region. There are two major public manifestations relations between Labour and the Alliance and relations between different strands within the Labour Party.

There are many roots to this problem. Some of its reflects a longstanding tradition of politics being dominated by “big personalities” like the Braddocks, Trevor Jones and Derek Hatton. As a result issues become grossly oversimplified or completely ignored. But this is only part of the problem. Perhaps its roots stem from general feeling of powerlessness among local politicians, a conscious of unconscious belief that real power lies elsewhere. The bitterness of local politics acts as a kind of release for the pent up frustration this engenders. But it is coimpletely self-destructive.

There are some remarkably unattractive qualities about the Alliance locally, about the Labour Party and if we’re honest about the Communist Party too. All of us have made major political errors in the past and done things that all the rest of us would find unacceptable. There are fundamental areas of disagreement between these political forces on loca, national and international issues. At the same time they represent the political expression of the majority of local people. Even in “socialist” Liverpool, a majority of people do not vote Labour in local elections.

If we are to begin to regenerate the local economy, win support from the outside for additional funds and tackle the problem of poverty and unemployment we need to bring all these forces together behind some kind of common approach. This will not be easy, to put it mildly. Of course unity must involve more than just political parties, popular organisations, trade uniosn, community groups, the churches and institutions such as the Polytechnic and the University and local business interests. But if some kind of political detente cannot be achieved, other forms of unity wil fall by the wayside. This will require a degree of self criticism and restrain on all sides.


The Alliance of Liverpool has had its own style of boss politics. It must end its redbaiting attitude to the Labour Party, the use of libel actions to supperss political critics and stop pretending that they are the only people who are sane or do antyhing worthwhile in the political field. Some of these habits will be hard to break, but it will be helped by more openness about internal differences among local Liberals. If the Liverpool Labour Party operated a peculiar variety of democratic centralism in the past, the Liberals have been at it for longer. Will the Brezhnev era in Liverpool Liberalism be followed by an outbreak of Glasnost?

The problems of the Labour Party, have been more publicly aired and there are welcome signs of a growing opennes and flexibility. But there is still a deep seated tendency to see the party as the source of all wisdom and to treat other movements as adjuncts or transmission belts for part politics and to reject the role of independent and autonomous movements. Certainly no prominent Labour politician has yet argued the case for greater cooperation with the Alliance, in opposing government policy and working to regenerate the region. Although there have been some signs of more limited agreement in statements about government policy.


The lead in building unity must come from the labour movement. The weight of the labour movement electorally, organisationally and culturally means that it has to be the force that opens the road to unity. Much of the opposition to such unity will come from within the labour movement. For this reason it is important that the labour movement takes the initiative the case of sectarian elements opposed to unity in its own ranks.

Arguing for unity does not mean forgetting that ther eare real difference or dissolving these into bland generalisations. The kind of unity we want must welcome unity and diversity and conflict. There is a need to build oposition in the short term to goverment plans for education, housing, the inner cities, the Poll Tax, social security and the NHS. Different groups, from unemployed centres to Parent Teachers’ Associations, from housing co-ops to church groups, from trade unions to local charities may become involved around particular issues. Each of them will have a particular interest and viewpoint, which is something to be valued. It would be ridiculous to expect them all to agree to a common position on everything and sectarian to try.

But it is not sufficient to build unity on the basis of opposing Thatcherism. We need a different vision of how life could be lived on Merseyside and how to get there. In all the movements of struggle which are starting to emerge we need to ask the question: how do we see the future and what do we want it to be like? This is not a call to win support for our or any othe rprogramme in particular movements, but to argue that these movements must openly discuss alternatives, as well as resisting attacks. It would be a novel contribution to politics in the 1990s if a city and region that has acquired a name for sectarianism and decline, as well as militancy and humour, could make a name for itself as the centre of a new movement for unity and renewal.



* Merseyside Socialist Research Group, Merseyside in Crisis, 1980.

* Michael Parkinson, Liverpool On The Brink, Policy Journals, 1985.

* Tony Lane, Liverpool: Gateway of Empire, Lawrence & Wishart, 1987.

* Liverpool Black Caucus, The Racial Politics of Militant in Liverpool, Merseyside Area Profile Group, 1986.

* Merseyside County Council, Agenda For Merseyside, January 1985.

* Tony Lane, Liverpool: City in Crisis, Marxism Today, November 1978.

* Huw eynon, Working for Ford; E.P., 1973.

* Mike O’Neill, The Community Charge (Poll Tax), paper for MTUCURC Research Group, 1987.

* Mike O’Neill, The Mersey Barrage, paper for MTUCURC Research Group, 1987

* Steve Munby, Municipal Militancy, Marxism Today, September 1984.


* Goran Therborn, Why Some Peoples Are More Unemployed Than Others, Verso, 1986

* R. E. Rowthorn and J. R. Wells, De-industrialisation and Foreign Trade, CUP, 1987.

* Bea Campbell, Wigan Pier Revisited, Virago, 1984.

* Chris Smith, Tribune, 4 December 1987.

* Mike O’Neill, A Politic and economic policy for the regions, paper for MTUCURC Research Group, 1987.


* Charlie Leadbeater, In the Land of the Dispossessed, Marxism Today, April 1987.

* Charlie Leadbeater and John Lloyd, In Search of Work, Penguin, 1987.

* Veronica Beechey, It’s off to work we go?, Marxism Today, May 1987.

* Tony Lane, Unions: Fit For Active Service?, Marxism Today, Feburary 1987.

* Robin Murray, Benetoon Britain, the new economic order, Marxism Today, November 1985.

* Robin Murray, New Socialist, April 1987.

* John Urry, De-industrialisation, Classes and Politics in Capital and Politics, ed. Rogert King, RKP, 1983.


* Michael Marshall, Long Waves of Regional Development, MacMillan, 1987.

* Stuart Hall, Realignment for What?, Marxism Today, December 1985.

* Aaronovitch, Smith, Gardiner, Moore, The Political Economy of British Capitalism, McGraw-Hill, 1981.

* John Grahl, Restructuring in West European Industry, Capital and Class, no. 19, Spring 1983.


* Paul Teague, The Alternative Economic Strategy: a time to go European, Capital and Class, no. 26, Summer 1985.

* John Palmer, Brave New World for Europe, Guardian, 9 October 1987.