by Joe Hayns
At Labour’s local government conference in February this year, Jeremy Corbyn said that ‘local authorities have always been – and continue to be – in the vanguard of innovation’.
Enthusiasm for Corbyn has dramatically expanded Labour Party membership, with both returning and new members having campaigned and won for Labour at the local level. But, Labour-led councils have continued administering Tory austerity – opposition to which being, in many cases, what drove Corbyn supporters to join the Labour Party in the first place.
What individual councillors and councils do? By 2020, central funding for local government in England is expected to be down by more than three-quarters on 2015. The services that councils provide – social care, transport, parks and libraries – are appreciably worsening, if not disappearing altogether. Not only is this socially damaging – since its Labour politicians managing the cuts, Corbynism’s electoral chances are hurt, too.
Is local government necessarily neoliberal? Can Labour-led councils only cut, or are we beginning to see local-level alternatives to austerity? Councils are legally bound to run balanced books - should councils consider passing unlawful budgets, risking deposition?
We spoke with long-time socialist Chris Williamson, pro-Corbyn MP for Derby North. Williamson is a former leader of Derby City Council, and was Shadow Minister for Communities and Local Government between 2010 and 2013.
We’ve had nearly a century of Labour councils rebelling against central government – most famously, Poplar in the 1920s, and Liverpool and the Greater London Council (GLC) in the 1980s. You can see the Houses of Parliament from County Hall, where the GLC was headquartered; there was an intense battle over the GLC, and Thatcher won. You were a councillor in Derby for 20 years – how has the relationship between local and central government changed since then, since that lost battle in the 1980s?
Yes, there was a substantial shift, but it had started before the 1980s though it accelerated then – there’s been a trend for the last 100 years to take powers away from local government, to centralise. Both parties have been, in government, responsible for doing that.
It really accelerated from the 1980s onwards. I think during the New Labour years there was a sense of a parent-child relationship between central and local government. New Labour in particular I think treated local government as the delivery arm of central government, rather than as having their autonomous, democratic mandate.
This has been compounded over the last seven years by unprecedented funding cuts. According to the Institute for Fiscal Studies, by 2020 local government will have seen a 79% reduction in its funding [since 2010]. As a consequence, local authorities are having to retrench into providing statutory services, to the exclusion of everything else, and I think therefore local government needs to work out how it’s possible to seize back the initiative.
The Differential Progressive Council Tax will help local authorities seize back the initiative, until such a time that we get a more fit-for-purpose funding regime for local government.
Eric Pickles’ Localism Act (2011) and the Local Government Finance Act (2012) are the legislative basis of the DPCT. It was the Localism Act that prompted the mayoral referendum in Bristol – the claim was that the Act would give local authorities more power. what were the politics of the Act?
The Localism Act didn’t really do what it said on the tin. Ironically, it concentrated substantial powers in the hand of the Secretary of State. What it didn’t do was devolve power - essentially it devolved blame for cuts rather than meaningfully enhancing local government’s ability to make decisions on behalf of local people.
I think that’s where we should be. I think it was Nye Bevan who said “the purpose of getting power is to be able to give it away” – that’s the ambition of Labour in government, to actually win back power to give local communities greater influence over what’s done in their name, in their areas. But in order to achieve that, you’ve got to give local authorities the ability to raise funds, in order to deliver the services that people want. The delicious irony is that we’d be using the Tories’ legislation to introduce a socialist budget. That wasn’t their intention, of course.
Council Tax is a political mixture, a hybrid, rushed through after the anti-Poll Tax win. Unlike the Poll Tax, it’s minimally progressive, in that it does tax more expensive properties more, though the difference between highest and lowest bands doesn’t reflect the difference between the least and most expensive properties. It’s not a ‘wealth-in-property’ tax, at all.
So, the DPCT is a patch-work, too, and it’s potentially short-term, with the one really concrete proposal in the Labour manifesto on local government being to review Council Tax and business rates. Is the DPCT being done out of desperation?
I suppose in a way an act of desperation, because all local authorities have at their disposal at the moment is Council Tax, and some odds-and-sods – some sundry charges which generate limited amounts of income. The proproposition would enable local authorities to seize back the initiative, would allow them redistributive budgets - it would be asking those with the broadest shoulders to carry the biggest burden, in terms of Council Tax, to generate the revenue for the local area.
There definitely needs to be a wide-ranging review of how local government raises its finances. They should be given more autonomy, I think. The way which you give local government more autonomy is by enabling them to be masters of their own financial destiny – they should able to raise finance themselves, to a larger extent, rather than being reliant upon on central government.
However, some local authorities are in a better place to raise their finances – say for example, Westminster, as against Knowsley, in Merseyside, which is not going to benefit from business rates, that won’t provide a large stable income stream for a LA there. Some equalisation would be necessary, and other levers could be brought in, to give local government more flexibility.
I think that we need to, in the event of a changing government, look for other levers, but in the interim, there is this opportunity available.
So far, the organisational vehicle mobilising in support of the policy in Bristol has been Momentum, which had some real successes inside the party. They campaigned for an MP here, whose chances didn’t look good before the last GE - they won it for the MP, really. But, they haven’t as a group got much experience – and may be this true of Momentum nationally – going out to people way beyond the Labour Party and arguing not just during elections, but for policies outside of election campaigns as well. Here and elsewhere, can Momentum pull it off?
The question really is whether the Labour group is prepared – in Bristol’s case, the Mayor is prepared – to take that chance.
If the Labour group, if Bristol is prepared, if Marvin Rees is prepared to embrace this proposal, then I’m absolutely convinced that Momentum would be an incredibly powerful lobbying board to persuade people to get behind. Now, there will be some opponents, obviously. Some of the people - the well-heeled individuals – may rail against being asked pay a bit more. Quite a lot more, in terms of council tax.
But, you know some of them, I suspect, may take a degree of civic responsibility – seeing they should be contributing more, because they are a lot more affluent, and do benefit from the services that are provided, directly, or indirectly, they benefit from them, that are provided by the local authority.
By putting this forward, it’s something that the council wouldn’t be imposing against the will of the public – they can do only do this if the public voted for it. It would have to go to a referendum, as per the Localism Act – any Council Tax increase above 5% has to go to a referendum.
And you think the constituents will go for it?
We can win the that referendum – that’s the point. The question is, for most people, a no-brainer – you can either have an increase of Council Tax across the board, and be paying more for less public service; or have your Council Tax frozen, and see public services enhanced. I can’t see why people would vote against that, especially with having Momentum on side, taking that to the doorstep. And if local authorities do take this on board, we’d see people from outside the area coming and lending a hand – to make this happen, because it would be a budget for the many, not the few.
It’s not ideal, it’s not perfect. There should be other levers, and the Council Tax is a blunt instrument – it’s all that local government have got at the moment. They’re being forced into this corner by central government. It gives us a strong case to make a redistributive budget and to bash the government at the same time. It’s putting the council in that position, by putting forward such a radical proposition.
Some Labour councillors’ wards will have a lot of people paying a lot more Council Tax. Good, it’s politically agreeable. But, inevitably, some Labour councillors will be highly reluctant to go along with it, with some Labour-held wards having far more higher-band properties than others. Councils have to present balanced budgets, or else central government will take control – many feel that this severely limits Labour-led councils’ potential anti-austerity powers. As you said, the Localism Act ‘devolved blame for cuts’. But the Tories are weak – isn’t now the time for Labour councils to be setting unlawful budgets?
I don’t think there’s any future in setting illegal budgets. We saw what happened in the 1980s, when local government was in general more radical, more progressive, than it is today, in terms of the councillors, were more willing at that time to take on the government.
I don’t think there is that appetite among local government. There’s been a little bit of - some significant - resistance to introducing this proposition, which is legal, and would have to get the support the public in order to implement. One, I don’t think we’d get many, if any, councils to set illegal budgets and even they did, the government would easily pick them off.
In the 1980s, local government was a bulwark against Thatcherism, in the end, there were two left standing against rates rises, Lambeth, and Liverpool – even a majority, even them, folded. All the councils that were looking to stand together in solidarity in setting an illegal budget, fell away – fell into line, and accepted budgets compliant with the law of the time.
Anywhere that wants to try such a thing would, I believe, play into the Tories’ hands, and allow them to characterise Labour as lawbreakers, militants, and they would be swept aside.
Photo: Wikimedia Commons
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