LIVERPOOL: WHAT WENT WRONG?

Article 1. May 1983 to September 1985

Article 2. October 1985 to March 1986

Article 3. The story updated to October 1986

Appendix 1. The appointment of Sam Bond, a NALGO observer's account

Appendix 2. Sam Bond, a statement by the Liverpool Black Caucus

Appendix 3. Derek Hatton on himself and his role

Article 1. May 1983 to September 1985

By Martin Thomas, from Socialist Organiser, 3 October 1985, analysed the situation in Liverpool after the defeated strike vote on 22 September, and what had gone wrong since the election of the left Labour council in May 1983.

The jackals are out for a feast. The vote by Liverpool City Council workers against an indefinite strike will be used as a lever by every self-serving bureaucrat in the labour movement to 'prove' that confrontation doesn't work.

In fact the 47 per cent strike vote indicates the opposite.

If Neil Kinnock and the national union leaders had supported the strike call, there would certainly have been a majority. And with the strike under way and solid, Liverpool would have been in a very strong position to win the 25 million it is demanding - a fraction of the central government grant cut from the city in recent years.

The big-business magazine The Economist, on 21 September, soberly outlined the odds:

'Suppose the Militants persist in saying no? Mr Baker's [the Tory minister's] trouble in this game of chicken is that he dare not, in the last resort, force Mr [Derek] Hatton [the council deputy leader] off the road . . . He can hardly afford chaos in Liverpool . . . Yet, except by giving way himself, he has little power to avoid it, if Mr Hatton and the council labour force - not necessarily the same thing - insist.'

The treachery of Kinnock and the national union leaders is not, however, the whole story. Mistakes have been made in Liverpool, too, and they need careful analysis.

The story starts in May 1983. On 5 May, as in three years out of every four, one-third of Liverpool City Council's seats were up for re-election. Labour won control of the council with tremendous gains - 11 extra seats, a 40% increase in the Labour vote.

Traditionally Labour had been weaker in Liverpool than in other big cities.

There was a strong Orange working class Tory vote. Since 1973 the city council had been the tawdry jewel in the Liberals gimcrack local government crown, controlled by them with the help of the Tories.

Five thousand jobs cut in six years; high rents; not one new council house started for three years; moves to privatisation; and cuts all round - that was the Liberals' record.

In the fight against the Liberals the Labour Party had become stronger, more active, and more left-wing, and the council unions had developed a powerful joint shop stewards' committee.

Labour's election promises included no privatisation; a 2 rent cut; no spending cuts; a drive on housing repairs; 6,000 new council houses and 4,000 new council jobs.

There had been other left-wing Labour councils elsewhere promising similar things: Lambeth since 1978, the GLC since 1981, a clutch of left-wing London borough councils since 1982. On the whole they had done a bit better than their Tory or right wing Labour predecessors; but it was mostly a matter of responding to central government grant cuts by rate rises instead of cuts in jobs and services.

The left-wing councils were more benevolent administrators, but still administrators within the existing system. As administrators they frequently clashed with their workers. Their promises of struggle against the government got no further than rhetoric.

Liverpool, however, was partly different. The new council Labour group, unlike any other, was pledged not to raise rates to compensate for central government cuts.

Other left-wing Labour councils were alliances of individuals of different shades, held together more by the arts of committee room politics than by a definite strategy. In Liverpool the Militant tendency commanded a leading role in the Labour group; a majority in the District Labour Party; and a strong presence in the council unions.

A unified strategy by the whole Liverpool labour movement was thus possible. And Militant's national network should have made it easier to win national support for a struggle in Liverpool.

The new Labour council started well building new houses, creating new jobs, going well over the budget prepared by the Liberals for 1983-4. By October the Tory government was already warning the council about 'overspending'. The council responded with a vigorous campaign among council workers and the local community. 20,000 people joined a march on 19 November.

By February 1984 Derek Hatton was explaining to Militant that 'the crunch' would come 'probably at the end of March'.

'We will refuse to balance the books and this can be challenged in the courts by any creditor or ratepayer . . . The courts could then appoint receivers who could take over the financial control of the city council . . .'

A campaign committee mapped out plans to include a possible all-out strike from 29 March.

But Labour's majority in the council chamber was only three - and a number of Labour right wingers declared that they would never vote for an unbalanced budget.

On budget day, 29 March - despite a one-day strike by council workers, and a huge, enthusiastic demonstration at the Town Hall - there was not a majority on the council for Labour's unbalanced budget or the Liberals' alternative budget.

The campaign continued right through to the council elections on May 3. Labour gained another seven seats, securing a solid majority for its unbalanced budget.

A survey by the University of Liverpool showed that 80% of council workers living in contested wards had voted, 75% of them for Labour. It also showed that they were ready to 'go over the top' with a local general strike and a rent and rates strike. According to a poll published in June, 55% of Labour voters would back a general strike if the Tories sent in commissioners.

Meanwhile the miners' strike was at its peak. Nearly half the Notts miners were out, and the strike was 100% in all other major areas. On 7 May Arthur Scargill appealed for solidarity: 'If ever there was a time to join with this union, to come out on strike . . . now is the time.'

But things started going wrong. Instead of stepping up their campaign, pushing through the unbalanced budget and going fast and hard for confrontation, the Liverpool council leaders dawdled. The campaign dwindled. The unbalanced budget was not put to the council again. Instead, the council leaders went off to talk to Tory minister Patrick Jenkin.

On 23 June some 2,000 delegates attended a labour movement conference in support of the council. But there were no specific plans for action. As Militant itself reported, 'The mood of the conference was . . . more akin to a rally'. Socialist Organiser put it less blandly: 'Workshops planned for the afternoon were called off in favour of an orgy of self-congratulation about the 'strength of the Marxists'. For many delegates this was an annoying missed opportunity'.

What was going on? Militant continued to talk about 'struggle', 'campaign', 'mobilisation', even 'unavoidable confrontation'. But their policy on rate rises has been subtly changed from 'no rate rises to compensate for government cuts', to 'no massive rate rises to compensate'.

Early in July the council leaders announced a deal with the government. The Tories would give them a little extra money - much less than they were demanding - and permit various financial tricks to shift the problem into the next year. Liverpool could then get through with a 17% rate rise.

This, said Militant, was a 95% victory. Socialist Organiser commented: 'According to Labour leaders in Liverpool, about 45% of the problem has been shifted to next year. In other words, the real confrontation has just been put off . . .

'If Liverpool is to take on the Tories, then the time to do it is when the working class is involved in the biggest class war in a decade. 'Next year' there may well not be a miners' strike or a docks strike . . .'

In Liverpool, however, there was strong support for the deal. The prospect of immediate confrontation had been fading, and clearly the Tories had conceded something, if not 95%. No council had ever before won concessions by standing up to the government.

The deal had a big impact on other Labour councils. Seeing the talks with the Tory minister and the failure to set a rate - and ignoring the campaign before May and the miners' strike - councillors thought they had hit on a way to defy the Tories and win concessions without going over the brink into illegality and direct action.

They argued that Labour councils - in particular, those facing the Tories' new rate-cap regulations - should refuse to set a rate at the normal budget time in April 1985.

And as budget time approached, in early 1985, the miners, against all odds were still on strike. Liverpool would have a second chance to come to the crunch with the Tories under favourable circumstances.

On 1 February , Militant reported: 'With Liverpool's crisis worse this year, shop stewards back united campaign'. Liverpool Labour believed that an unbalanced budget was best, but for the sake of unity would initially not set a rate. And then?

'Liverpool proved last year that a mobilised working class with a Marxist leadership at its head took on the Tories and won a major victory.' Militant gave no more specific indication of what sort of mobilisation would be needed. It did not suggest that it would be more than the demonstrations and rallies that sufficed in 1984. And it gave no hint of any urgency about bringing the struggle forward so as to give aid to the hard-pressed miners and ensure the Tories were attacked on two fronts.

On 2 March, just five days before Labour councils were due to vote in defiance of the government, the miners met at a recall conference. Unsure of the councils' determination, they decided to return to work.

Sadly, the miners' doubts were well-founded. The GLC and ILEA immediately broke the 'no rate' front, by setting legal rates. Ten Labour councils did refuse to set a rate. But by early June every one of them had backed down except Liverpool and Lambeth.

Liverpool was not central until June. In contrast to other councils, Hackney in particular, it faced no legal threats, and indeed Militant said (14 June) that because of the 1984 delay in setting a rate Liverpool 'councillors remain technically in a 'legal' position.'

But by June, once again, Liverpool council faced a sharp choice. Confrontation or not?

Councillors proposed a 20% rate rise which with some financial juggling would allow Liverpool to scrape through the year. The unions said no. So Liverpool set an unbalanced budget - 9% rate rise, 265 million expenditure, 148 million income - on 14 June. It demanded from the government the return of 29 million grant and 88 million penalties.

So far, so good. Maybe chances had been missed, but now, as Militant put it (21 June), 'After two years of shadowboxing . . . the gloves are off.'

Instead of general calls for a 'mass campaign', Militant said boldly: 'Strike to defend councils'.

Despite everything, Liverpool was still potentially in a strong position. In 1972-4, a single tiny Labour council, Clay Cross, defied the Housing Finance Act, a Tory law to increase rents. The councillors were surcharged and disqualified. But the Tories never managed to collect the rent arrears. The Housing Finance Act was repealed by the Labour minority government in 1974, and the Tories have never tried to reintroduce it.

Liverpool could beat the government. It needed only two things: determination and unity, what the ratecapped councils had lacked.

They had talked of mobilisation, struggle, defiance, confrontation. But the councillors would only; go 'right up to' the brink, as Islington's Margaret Hodge put it, not over it.

They called for their workforces and local working class communities to unite with them. But it was a unity in which the workers were a stage army manipulated and manoeuvred according to the tempo of council chamber tactics.

Most of the rate-capped councils had, in their capacity as managers of the local state, conducted bitter disputes with sections of their workforces in the run-up to their defiance of the government. The workers still supported the councils when they showed some sign of fighting the Tories. But quickly they found that they were being manipulated again.

In July 1984, for example, Islington council declared, 'If we were to give in to rate-capping, we would have to sack 750 of our staff.' In March 1985, the council refused to set a rate, and called on workers to back it in a fight to the end with central government. Two and a half months later the council leaders announced that they had after all found financial tricks that would enable them to comply with rate-capping while making no cuts; they thanked the workers for their support and told them to go home.

Other councils did similar Grand Old Duke of York acts.

One lesson was clear: a council seriously taking on the government would need to be absolutely open and honest about its finances. Otherwise right wingers would always be able to paralyse the struggle at the crucial point by producing this or that 'new' financial trick to allow for some sort of muddling through.

Liverpool and Militant had shown more determination than councils like Islington. Would they now show enough determination and skill to win?

Unfortunately they didn't. Like the other left councils, though in a different way, they had drawn the wrong lessons from 1984. In truth, the concessions that Liverpool won from the Tories were a by-product of the miners' strike and the willingness of a broad spectrum of the Liverpool working class to take direct action. Councils like Islington saw it as a victory for council chamber mock-heroics: the Militant in Liverpool, apparently, saw the crucial factor as their 'Marxist leadership'.

Militant has always had a mechanistic view of the world according to which increasing economic crisis will steadily and automatically bring triumphs and new recruits to 'the Marxists'. There is no need to adjust and develop this 'Marxism' in line with living reality: everything has been foreseen and provided for in Militant's perspectives, and new events do nothing but confirm them. Less complacent Marxists are flibbertigibbet irrelevancies - 'the sects'.

The inbuilt arrogance of this view was given a boost by Militant's puffed-up self-satisfaction after July 1984. They felt themselves all-powerful. In October of that year they launched themselves into an utterly destructive and divisive conflict.

Sampson Bond, a Militant supporter, was appointed as council race relations officer against the strong opposition of the Black Caucus, a committee of black groups set up to liaise with the council under the Liberal administration.

The Black Caucus said that Bond had got the job only because he supported Militant policies - policies that opposed any positive discrimination - and resolutely insisted that the problems of the black working class were no different from those of the white working class. Militant replied that the Black Caucus just wanted the job for their own people.

But the Black Caucus had after all been recognised by the Labour council as more or less representative of Liverpool blacks. Liverpool City Council NALGO boycotted Bond. The Trades Council, the council joint shop stewards committee, the regional TGWU, and most black groups, called for the appointment to be reconsidered. Militant climb down? Never!

The 'Marxist leadership' tried to bulldoze all the objectors. A year later, the issue is still inflamed. The Black Caucus has moved from objections to Militant towards hostility towards the whole labour movement. Militant, outraged that the Caucus will not recognise the enthroned 'Marxist leadership', denounces it as a gang of 'pimps and gangsters' and has called the police against black demonstrators. The council joint shop stewards committee has been seriously strained and disrupted by the affair.

Despite all that, in June the joint shop stewards' committee voted unanimously to support the unbalanced budget. On 26 July Militant explained that this budget would mean the council running out of money around late August or early September - unless the courts stepped in first.

Yet the council's campaign remained low-key compared to 1984. Instead of becoming bolder and sharper as the crunch came nearer, the coverage in Militant became vaguer and softer. The urgent calls for strike action were replaced by appeals for general 'support' in a long-term campaign. In late July, without explanation, the council budget was reduced from 265 million to 255 million, and the date at which the council would run out of money was put back to 'late November'.

What was happening? What were the council's plans? Workers in Liverpool and elsewhere weren't sure.

More and more emphasis in campaigning was put on the surcharges threatened against the councillors for not setting a rate until 14 June, rather than the prospect of the council running out of money. Yet those surcharges were a secondary issue.

The councillors (as Militant had indicated in its issue of 14 June) had a strong legal position on this point. And long before the legal processes were completed on that surcharge, the council was due to run into a position with its finances exhausted, the workers on strike, and the councillors in open and flagrant illegality!

Militant of 13 September summed up the confusion. Page 1 and most of page 3 were given over to the surcharges and a one-day protest strike against them on 25 September. Two short and inconspicuous articles announced that the council would start running out of money at the end of September and that it planned to issue 90 days' redundancy notice to all employees!

On 16 September a council meeting was called to decide on the redundancy notices. Workers blockaded the Town Hall to stop it taking place. Council leaders joined the demonstration.

Why did they ever propose the divisive redundancy notices? 'Purely a legal device', explained Militant. By discarding the need to budget for wages after December, the council could restore its credit and keep going longer. And not issuing the redundancy notices could make councillors liable to huge surcharges.

Council workers could see no sense in starting a fight for jobs by issuing redundancy notices so that any strike had to demand not only more money from central government but also reinstatement. And why this concern for petty legal devices? Was this confrontation with the government or wasn't it?

The redundancy notices policy was the exact opposite of what was needed to galvanise the Liverpool labour movement for a fight. Inevitably it was divisive, diversionary, confusionist. Inevitably it split the workers - section from section and shop stewards from the rank and file.

The 31,000 were asked to tamely accept dole cards and trust the council's promise to take them back on 1 April. The workers - no more than a stage army in Militant's scenario - were being put out to grass for three months. Instead of the councillors standing on the line and giving a self-sacrificing lead in the fight for the city they offered up the workers instead, demanding that the 31,000 passively give up their jobs at the say-so of people who were unwilling to put their own heads on the block. This wasn't Marxism - and it wasn't leadership either.

Within a few days the front had apparently been straightened out by Derek Hatton promising not to issue redundancy notices, and the stewards calling an all-out strike from 25 September.

But immense damage had been done. The council should have explained clearly and in advance how and when it would run out of money; continued spending up to the last possible moment, thus forcing the banks and/or the senior council officials to take the responsibility for stopping wage payments; demonstratively stopped debt payments to the banks before wage payments; and brought the campaign to a climax by mobilising councillors and workers together to picket or occupy the offices of the officials or bankers refusing to pay wages.

That way everyone could have seen that the councillors were prepared to put themselves in the front line - that they were undertaking a real struggle against the government, not just a manoeuvre or a gesture.

As it was, many workers thought that the redundancy notices were a ploy to save the council three months' wages and get it through the year. Or was the strike call a version of the same thing? 'I won't strike to bail out Derek Hatton', said some workers. They were wrong - but their confusion was not surprising in the circumstances.

In early September the city treasurer had come up with a scheme to get through the financial year by taking money from next year's housing repairs budget. This plan was now taken up by right-wingers and the Communist Party.

The media and the national Labour and trade union leaders also played their part in shaping the 53%-47% ballot result against strike action. But they had been hostile all along. It was the council's blundering tactics that gave them their opening.

And since the vote there has been worse. Militant declared that the vote was only a minor setback: its lead article on 27 September spoke blandly of - 'the success of our campaign'! And on that same day, 27 September, redundancy notices started going out - those same redundancy notices that had provoked a workers' demonstration to stop the council meeting on 16 September.

In the aftermath of the ballot defeat the GMBU (in which Militant is strong) was swung to supporting redundancy notices. Militant explained: 'This is purely a legal device to enable the council to keep paying wages until 18 December... This device will give the councillors and the union [?] valuable time to extend the campaign of explanations ...' - especially to the members of NALGO and the NUT, who had been against the strike.

For regaining lost ground inside NALGO the council's tactics could hardly be worse. NALGO is strongly against the redundancy notices; the council is like a general who prepares his shaky regiments for battle by trampling them underfoot in the course of his retreat! And insulting them too: both the NALGO members in general ('pen-pushers', not 'real' workers) and their leaders ('traitors') have been freely denounced and blamed for the ballot defeat.

In fact the NALGO branch leaders argued for a strike. Not as vigorously as was necessary, to be sure: wrongly but understandably, they were jaded and unenthusiastic after a year of being bounced around by Militant and trying to puzzle out what the council was really up to.

But the NALGO branch officials are not, and do not claim to be, 'the Marxist leadership'. They are trade unionists doing a trade union job as best they can. The job of 'the Marxist leadership' is to win the confidence of trade unionists, not to lay down the line and denounce the trade unionists when they fail to live up to Militant's 'perspectives'.

'Success of our campaign'? By Monday 30 September 3,000 NALGO members were on one-day strike and marching through Liverpool's streets against the redundancy notices. Teachers picketed the building where bundles of redundancy notices were due to be issued to local teachers, and the council sent them out by taxi instead. At least one college principal has been suspended for refusing to issue redundancy notices.

Local NUT members, with the support of their members, are taking the council to court to stop the redundancy notices. A council committed to saving jobs will be in the ridiculous position of defending in court its 'right' to issue redundancy notices - and probably losing the case

The Tories could have cut the process short at any point - by getting someone to bring a court case to declare the unbalanced budget illegal, by telling the banks that Liverpool's credit was not good, or simply by stopping central government grant payments. They chose to wait and see - and now. they can sit tight and watch the Liverpool labour movement wound and perhaps tear itself apart.

NALGO and the NUT have gone for the City Treasurer's option of 'capitalisation', also favoured by the Liberals and the Tories. This means 'borrowing' money from next year's housing repairs.

As a device for retreat it is a lesser evil than the redundancy notices. In principle it could win time for a fight next April to ensure that enough money was won from central government to return the money to housing repairs and maintain other services.

In practice it wouldn't. Particularly because of NALGO's and the NUT's opposition to the strike from 25 September, GMBU and TGWU see 'capitalisation' as a scheme to keep NALGO jobs safe while putting manual jobs at risk. 'Capitalisation' would be scarcely less divisive than the redundancy notices.

Any orderly retreat requires a fairly high level of trust in the people carrying out the retreat. And, as a result of Militant's blunders over the last 18 months and especially the last three months, that doesn't exist in Liverpool.

The first thing necessary to mend the situation is that the council should withdraw the redundancy notices.

According to Militant of 27 September, without the notices 'The City Treasurer has said that he would refuse to sign cheques for fear of being liable for fraud'.

Then let the councillors change the signature on the cheques and dare the state to prosecute them for fraud! If the City Treasurer or the banks try to stop them, let them organise demonstrations, pickets and occupations to highlight who is responsible.

Let all the council workers see that there is no question of manoeuvres, that the councillors are unambiguously in the front line, and that a strike is forced on them by the Tories and their agents, not by any political gimmick of the council. Let the issue be posed as the council and the workers jointly fighting the Tories in defence of jobs and services, rather than the workers being conscripted as rather bewildered foot soldiers 'to defend the council' while the council pursues 'legal devices'.

Would such a change of tack recreate the necessary unity? Guarantees are impossible. But there is a chance. The council has a tremendous fund of goodwill won by its solid work, like the building of 4,000 new houses, and the basic arguments about Tory responsibility for local government cuts and the need for a fight have got through to many thousands of workers.

The full reasons for everything Liverpool council has done over recent months are not clear. The record suggests divided or unsure counsels. It is not clear exactly what the council leaders have in mind now. Not even they can believe that 'Marxist leadership' can win support from people by means of issuing redundancy notices to them against their will and denouncing them.

A general pattern does however emerge from the council leaders' and Militant's policy since May 1983.

According to Militant's addled version of Marxism, iron laws of history drive the working class ever onward towards Marxist politics. The job of the organised Marxists (i.e. Militant) in the meantime is to make general propaganda and build their own following.

Victory is inevitable in the long term; so why take risks now? If the situation is favourable now, it will certainly be more favourable in the future. And it makes no sense to risk positions, prestige and propaganda platforms for the sake of 'ephemeral' struggle.

So Militant have tried to maintain a delicate balance: on the one hand giving Liverpool a profile as a fighting, socialist council: on the other trying to make sure they keep the council in office and themselves in the leadership of the council.

At the crunch they may fight. But, contrary to all intelligent tactics, they have tried again and again to postpone the crunch and extend the time in which the council stands in opposition to the government but not quite in collision with it.

On 22 September, with the Liverpool council workers' vote against indefinite strike, that approach led to a serious defeat. The consequences of that defeatconcern not only Militant but also the whole of the labour movement and especially the left.

There is a serious risk now of long-term division and dislocation in the Liverpool labour movement, and of the door being opened for witch-hunts against Militant and other leftists.

The left must do battle against the jackals and witch-hunters, and at the same time fight for a change of line by the Liverpool council and Labour Party.

Article 2. October 1985 to March 1986

By Martin Thomas

22 September 1985 was indeed the turning point. Since then the Liverpool labour movement has been retreating rapidly, its disarray made worse by consistently clumsy tactics from the council leadership.

Militant's immediate response to the no-strike vote on 22 September had been, as we've seen, blandly to insist on 'the success of our campaign'.

The redundancy notices were issued. Militant insisted that they were only a 'legal device'. The GMBU, at least would be on strike by the time the notices ran out; and there would be a campaign to win over the rank and file of the other unions.

At Labour Party conference (5-11 October) Derek Hatton withdrew a motion backing Liverpool 'in the interests of unity'' after an appeal from David Blunkett. Hatton agreed that Liverpool council would consult with Labour and trade union leaders.

Perhaps Hatton had little choice but to be conciliatory. But Militant was painting a different picture - one of great successes for its strategy.

'The mood in the city is hardening against a compromise', it said. 'There are now signs that the mood in the unions previously opposed to the council is changing' (12 October).

Not so. On 11 October the council was forced to withdraw the redundancy notices because of the legal action brought by the NUT. Instead it found a new 'legal device'... to lay off the whole workforce from 1 to 28 January.

The council leaders explained that this would allow them to remain on the brink a little longer. Renewed financial juggling and an Appeal Court ruling in favour of Bradford and Notts councils had reduced the gap between Liverpool's income and expenditure: the 28 day lay-off would balance the budget and thus allow Liverpool renewed access to credit.

A Militant editorial (18 October) gave the policy a would-be Marxist gloss - and retreated from the perspective of strike action. 'As a result of the Appeal Court decision to declare illegal government financial penalties imposed on Bradford and Notts councils, Liverpool now has access to 7.7 million which otherwise would have been taken in penalties. Seeing the Liverpool councillors' determination to stand firm, a section of the ruling class has tried to draw the government back from the looming confrontation by making this concession.

'It has therefore become possible to reduce the period during which the council will have no money to pay wages from three months to four weeks. It would be preferable to have strike action before the lay-offs take place, but if the workforce decide that tactically it would be better to accept the lay-offs, then the responsibility will rest solely with Baker and the Tory government...'

Militant referred to the planned 28 day lay-off as the 'Tory lock-out'. This was just borrowing a cheap demagogic trick from right-wing and soft-left Labour councils who have evaded responsibility for their own cuts (imposed in response to central government pressure) by labelling them 'Tory cuts'.

'Tory cuts' they are, on one level; but the whole question is whether Labour councils will turn the 'Tory cuts' in central government finance into 'Labour cuts' in local jobs and services. To cut all local jobs and services (bar volunteer-run emergency provision) for 28 days was no better a proposal than any other 'Labour cut'. And it was no basis to prepare for the 'looming confrontation' so bombastically predicted by Militant.

In fact the council leaders spent most of their time looking for a compromise. A team of Labour local government finance experts, headed by Maurice Stonefrost ofthe GLC, visited Liverpool.

David Blunkett of Sheffield talked about other Lab our councils using their access to credit to help Liverpool.

But there were strings attached. The Stonefrost report demanded bluntly that Liverpool drop all its radical pretensions. A rate rise should be possible because the judge in the NUT case had indicated that Liverpool's existing rate was unlawful. That, together with some combination of rent rises, job cuts or a recruitment freeze, and capitalisation, would see Liverpool through the financial year. But then capitalisation alone could do that! Stonefrost minced no words: the rate rise and other measures were necessary not to scrape through the financial year, but to give some surplus in the year's budget, a sound basis for a balanced legal budget in 1986-7, and an assurance of good behaviour in future.

Blunkett was not so explicit. But, reading between the lines, it looked as if he was demanding similar political conditions for his aid programme.

It was a curious picture. Liverpool's best friends were the bankers, still fairly willing to lend. The Financial Times explained why. Liverpool, like all local authorities, had vast assets, and so lending to it was almost risk-free. Even the prospect of a local general strike and a semi-revolutionary confrontation with the government need not faze the bankers. Either the council would win and get more money from the government, or the government would win and impose a new administration which would make cuts; either way the banks would get their money back.

While business calculation made the bankers relatively friendly, the leaders of the labour movement were unrelentingly hostile. The soft left - people like David Blunkett - were more subtle than Neil Kinnock, but hardly less dangerous. Their offers of assistance were designed less to help the council than to promote an anti-Militant bloc within Liverpool Labour. Blunkett was the star speaker at the launch rally for 'Liverpool Labour Left' on 3 November. Although pressure from genuine non-Militant leftists restrained Liverpool Labour Left from coming out plainly for surrender on the council budget and a witch-hunt within the party, that is certainly what its leaders worked for.

Maybe we shall never know, but it cannot be impossible that the Labour leaders, especially prominent local government figures, were using their connections in the City to persuade bankers not to give Liverpool an easy escape route.

The jackals were indeed out. The 20 November National Executive Committee would decide to set up a kangaroo-court 'inquiry' into Liverpool District Labour Party. Allegations of bureaucratic practices within the DLP - some true, but none of them new revelations, and all of them no worse than the behaviour in many other DLPs and CLPs across the country - were scraped together to give a respectable cover to a political witch-hunt against Militant.

Kinnock, the soft left, and their allies in the Communist Party (which has influence among the leaders of the Liverpool NUT and NALGO) were all acting true to form. But the question was: would they get away with it?

Kinnock and the Communist Party had not changed. Before 22 September they had been just as hostile to militant class-struggle politics. But they had not felt confident enough to openly denounce Liverpool City Council. The council's fighting policy had had a solid majority in the council workforce. Liverpool NALGO's leadership includes Communist Party members, but also people closer to Trotskyism; up until 22 September the leftists had the upper hand.

22 September radically shifted the balance of forces. But even then much of the damage could have been repaired by a sober, honest and skilful policy.

Militant pursued no such policy. The 28-day lay-off reinforced the hostility of many NALGO members. Given its isolated position, Militant had to try to create some alliance with the better sections of the broader left; in fact its policy towards the rest of the labour movement swung madly between idiotic attempts to co-opt it ('Labour NEC backs Liverpool fight', read the surreal headline in Militant of 25 October) and siege-mentality sectarianism. There was in fact no effort to do anything in unions like NALGO except to recruit odd individuals to Militant.

And the old tactics-from-above continued. Week after week Militant insisted that the only alternatives now in Liverpool were drastic cuts or an all-out fight. Everyone knew this was untrue; that there were alternatives, undesirable but less drastic, like capitalisation. Instead of arguing against those alternatives honestly and patiently, Militant just blustered. At the same time, the shape, size and schedule of the all-out fight which was nominally its alternative were left vague. Talk about it maybe being 'tactically better' to accept the 28-day lay-off (i.e. a peculiar form of cuts) undermined the will for a fight. Pro-Militant shop stewards who toured the labour movement for support indicated in fact, that they would prefer to postpone any fight until the spring; stopping debt payments before then might be desirable, but (so Islington South Labour Party, for example, was told by a guest speaker from Liverpool) it would lose support by being seen as a 'Trotskyist or anarchistic' act.

Council services began to wind down for lack of cash. Libraries could not send out reminders for overdue books because they had no stamps. Workers had to paste together bits of scrap paper to make envelopes. Heating was turned down. And still the workers did not know exactly what was going on above their heads.

Finally, on 22 November, they found out. The council backed down, with a deal which was (as Militant of 29 November put it) 'based on capitalisation of housing expenditure'. It got a 30 million loan from Swiss banks. The condition was attached that the council must stay legal in future. (Although it could be said that a promise to a bank to keep the law ties you no more than the law itself already does, such a promise certainly hinders any campaign to mobilise workers). The package meant cuts, though only very marginal ones.

And the workers soon discovered: (1) that these cuts had in fact already been made, by the partial rundown of services in the period when the council was running out of cash; (2) that the loan had been negotiated as far back as August. In other words, the retreat had already been made, under cover of blustering slogans about an offensive, before it was announced.

It is not possible to 'lead' workers like this for long without suffering the consequences. In March the courts decided that the Liverpool councillors, together with Lambeth's, should be surcharged and disqualified for delay in setting a rate. As we have seen, the Liverpool councillors had believed that they were quite in the clear legally when delaying a rate until 14 June. In terms of legal argument they were right. But court decisions, especially in uncharted territory, are not determined by pure logic. By March Tory-minded judges knew that their whole class demanded revenge on Liverpool and reckoned that that it would be safe to take it.

Tragically their reckoning is not far out - or so it seems so far. A protest strike and rally against the court decision gathered only 400 workers. NALGO boycotted it. A workforce once almost solid behind a policy of class struggle has now been swung in its majority behind Kinnockism - and to curse and denounce Kinnock and the Communist Party, though justified, does not explain how that happened.

Prospects for next year's Liverpool city budget are grim. The council is rate-capped. Its deal with the Swiss banks commits it to stay within the law. The rest of the local government left has collapsed comprehensively, and the labour movement generally is at its lowest ebb of combativity for some time. Given the state of the Liverpool council unions, the council leaders are not even talking about a confrontation strategy. The nearest they have come to an answer is that the council should set a 'spending limit' instead of a budget - committing it to cut spending without committing it to cut specific jobs or services.

Likewise with the witch-hunt inside the Labour Party. Support for the democratic rights of the Militant comrades is visibly weaker now than in the previous witch-hunt of 1983. There is no campaign on the lines of 'Labour Against the Witch-hunt'.

Any small Marxist tendency which found itself at the head of a struggle as big as Liverpool's would be likely to make mistakes. The Bolsheviks, after all, made many mistakes in 1905 and 1917! Genuine Marxists differ from sectarians and opportunists not by never making mistakes, but by an honest and rigorous political method which enables them to keep workers' trust and to learn from mistakes.

Article 3. The story updated to October 1986

By Martin Thomas

As we print these articles in October 1986, Militant's supporters in Liverpool are in full retreat.

What was once the front rank of the local government fight against the Tories is now the parade-ground for a witch-hunt which hits not only Militant but also many others on the left.

Every socialist must fight that witch-hunt. But we must also learn the lessons of the defeats that set it going.

Nine leading Militant supporters in Liverpool have been expelled from the Labour Party. Constituency Labour Parties have had to accept those expulsions on pain of being suspended - and one of them, Broadgreen CLP, has been suspended nonetheless.

When Labour's right wing expelled five members of the Militant editorial board in 1982, they had a hard time of it. This purge has been much easier, and the Labour leaders have been able to use it as a springboard for a broader attack on the left. Without a qualm they have just imposed a parliamentary candidate on Knowsley North CLP, on the grounds that a 'Labour Against Militant' candidate might stand if the CLP's probable choice, non-Militant leftwinger Les Huckfield, ran for Labour.

The Labour Party Young Socialists is under attack.

But Militant have not even tried to stir up a wide campaign against the witch-hunt. Instead they have relied on the courts.

They have suffered a major political defeat: but instead of analysing it and learning from it, they have only become more bombastic.

The Liverpool expellees refused to use their speaking time at Labour Party conference (35 minutes between them). This move further discredited them with the Labour rank and file, the only possible explanation of such stupidity seems to be that there were sharp internal divisions among the Militant supporters.

Yet Militant (3 October 1986) blindly proclaimed: 'The support for Marxist ideas, far from declining, is on the contrary, poised to take a huge leap forward'. They announced (once again) plans for a daily paper.

Marxists are tested not only by triumphs and great struggles, but also by defeats and retreats. Militant has failed this test too, both nationally and in Liverpool.

Liverpool's budget for 1986-7 set an overall expenditure figure implying cuts, but no specified cuts. Militant supporters explained that this was yet another 'device', and the cuts would be fought. But, beneath the bombast, there was no fight.

On 28 July Liverpool council's chair of finance, Tony Byrne, told a local Labour meeting that it would be 'necessary' to cut about 12 million. 10 million of this would be 'painless', but the other 2 million would not.

Militant supporters voted to endorse this plan, while Socialist Organiser supporters voted against and many abstained.

Appendix 1. The appointment of Sam Bond, a NALGO observer's account

On the 9 October 1984, appointments were being held at the Municipal Buildings, Dale Street, for the Principal Race Relations Adviser. Grade P06.

As a NALGO representative, my duties were to ensure that the interviews were free from any form of discrimination.

There were six candidates for the above post, four of whom were from Liverpool and who had the necessary experience of the Liverpool black community and its inherent problems. They all had good experience in organising projects, liaisonwith the City Council and had a good knowledge of Labour Party Policy.

Although the fifth candidate was not from Merseyside, he is a Principal Race Adviser with valuable experience.

The final candidate, Mr Bond, is a Londoner and has been employed for two years as an Assistant Building Surveyor. He has spent two years in University for his building surveyors' posts. His experience consists of part-time youth work. Mr Bond gave a poor interview and had difficulty in understanding questions from the panel.

I felt that there was discrimination in that the other candidates were more experienced and projected themselves far better at their interviews.

Derek Hatton stated clearly that he was looking for someone to 'toe the party line'. This caused concern to the Caucus and Liberal councillor as well as myself. They all stated that they were looking for someone with knowledge and experience of racial problems.

After the interviews took place, discussions were held between the councillors and the Black Caucus on the above post.

Derek Hatton was the first councillor to appoint Mr Bond. Derek Hatton said, 'There were candidates who would have difficulty in following party policy because they have criticised policy in the past'.

This caused great concern to myself and the Black Caucus and the Liberal councillor. The Caucus said that it was the candidates' job to tell any political party where and how they are going wrong in Race Relations.

Derek Hatton then said to the Caucus they would be allowed to say what they felt when it was their turn. Derek Hatton then went on to say he felt Mr Bond was 'new blood' and felt Mr Bond was a 'breath of fresh air'.

A councillor from the Labour Party chose to discriminate. He said 'Candidates are doing a good job where they are, they can easily stay there, I go for Mr Bond'.

Again concern was shown by the Caucus and they again said knowledge and experience was important and not someone to toe the party line.

The Caucus members, after pleading with the Councillors to listen to them, then stood up and felt they could not take part in the appointment of a young inexperienced candidate, whilst the other candidates portrayed a wealth of experience and knowledge.

In view of the performance of the other applicants, I felt that Mr Bond was not the best candidate for the job, after reading about his experience and watching his performance at the interview, I could no longer take part as a trade unionist, therefore I walked out and said I would have to report back to NALGO on what I had seen and heard.

This view of the interview was upheld immediately by the local NALGO officials, on the grounds of 'blatant political discrimination and irregularities' (NALGO Herald Vol. 2, No. 9, July, 1985).

Appendix 2. Sam Bond, a statement by the Liverpool Black Caucus

FROM THE LIVERPOOL ECHO, 17 JANUARY 1986

Councillor Derek Hatton (Liverpool Echo, 22 October 1985) accused the Liverpool Black Caucus of 'organising physical attacks' on Labour councillors and party members. This is a total fabrication.

The appointment of Mr. Sampson Bond lies at the centre of the race relations crisis that the Liverpool Labour Party have precipitated. A vendetta has been waged by Militant against the Black Caucus.

Who are the Black Caucus? At the end of 1980, the city council adopted a formal equal opportunity policy. A race relations liaison committee of 12 councillors and 12 local black representatives was formed. The community representatives (the 'Black Caucus') have been regularly elected at annual meetings of black organisations.

The position of the caucus was reflected in the appointment committee for the principal race relations adviser on which the caucus were allowed three voting members.

At the interview, Mr Bond's lack of relevant qualifications and experience was obvious. He did, however, display a commitment to Liverpool Labour Party polices.

The predictable course of events was revealed when Mr. Hatton as chairman said they would only appoint someone who would 'follow Labour Party policies'.

He proposed Mr Bond's appointment and, despite the Caucus's strong arguments that any of the other five candidates would be acceptable but not Mr Bond, the five other Labour councillors voted unanimously for Bond.

The caucus representatives and the NALGO observer immediately walked out of the meeting because they felt this had clearly been a 'fixed' appointment.

By the next morning, NALGO had organised an official picket of the other planned posts in the race relations unit.

A sit-in in Mr Hatton's office then took place involving members of local black organisations.

After several hours' negotiation Mr Hatton emerged to show his signed agreement that the principal race adviser post would be re-advertised. Mr Hatton's promises proved hollow.

The next evening the District Labour Party branded the previous day's demonstration as 'alien' to the Labour movement In an extraordinary display of double standards by the vehement supporters of picketing miners, Cammell Laird occupiers and other (mainly white?) 'workers in struggle'.

The Caucus became transformed overnight from elected and respected council sub-committee representatives to what has been called a 'violent' and 'unrepresentative faction'.

Yet the sit-in had been entirely peaceful. There were no incidents, no arrests, no charges. The racist myth of 'black violence' has been relentlessly pumped out by Militant propaganda ever since.

Councillor Margaret Simey the Bishop and Archbishop of Liverpool have all condemned the anti-Caucus leaflets and the activities in Liverpool 8 of the Militants imported from London to support Mr Bond and Mr Hatton.

Two Militant-inspired groups have been established: Merseyside Anti-Racist Campaign and Merseyside Action Group, for whom funding was recently proposed at a city council meeting.

A few local black individuals have formed an alliance with Militant, but by and large the community has remained united despite the massive efforts to denounce the Black Caucus and to undermine or split local established black groups.

This ruthless approach of the Liverpool Labour Party has led to a major deterioration in race relations.

There are many more issues such as the abolition without consultation of the race relations liaison committee; recruitment (under one per cent of the council's workers are black); education (a long delay in issuing the code of practice to combat racism in schools, still no multi-cultural education unit, and an inadequate race relations co-ordinator scheme in the comprehensives); the cancellation of the River Avon Street housing project which was to be for black and ethnic elders, and was to receive a 75% grant from central government; social services - what happened to the 'care of the elderly' report or to the black social workers project?; and the disregard councillors have shown for the Commission for Racial Equality's major housing recommendations regarding the inadequate and discriminatory practices that have occurred within the city council's housing department.

A change of direction on race by the city council is critically overdue.

Signed by eight Black Caucus members

Appendix 3. Derek Hatton on himself and his role

EXTRACTS FROM 'INSIDE LEFT', BY DEREK HATTON (BLOOMSBURY, 1988)

ON PETER TAAFFE

... there is no other single individual whose political brain has so impressed me. I am convinced that he is the greatest political thinker I have ever met, and has no equal where political strategies and tactics are concerned...

One person, though, stands head and shoulders above the rest in helping orchestrate our campaign. Peter Taaffe, the man at the helm of Militant...

I have never known such a clear thinker, or such a tactical genius. Politics is not about building up the individual, but within any Socialist struggle individuals do emerge. Where the development of Militant and its ideals is concerned that individual is Peter Taaffe. Since we first met back in the 1970s he has been my sounding board. It also must be saidthat the long-standing inspirational figure of Trotskyism in Britain, Ted Grant, the founder of Militant in Britain, was a significant influence at all times.

WHY THE TORIES MADE A DEAL IN 1984

The Government were fighting Arthur Scargill on one front. They didn't want a second front with Derek Hatton, Militant and all that entailed. [Tory minister Patrick] Jenkin was under pressure to find a solution...

It was all summed up at the time by Tory MP Teddy Taylor. I met him one evening when I travelled up to Glasgow, to appear on Scottish Television soon after winning our battle in Liverpool for more money. Taylor was on the same programme, and afterwards, in the hospitality room, couldn't resist having a go at me... 'You do realise,' he said, 'that we had to tell Patrick to give you the money. At this stage we want Scargill. He's our priority. But we'll come for you later.'

To the best of my recollection these were the words he used, and how true they turned out to be. They did want Scargill, and they did come for us later.

1985: THE TORIES MOVE IN FOR THE KILL

November 1984, we faced a continuing budget crisis. Patrick Jenkin had promised as part of his package to give us 130 million towards our house building programme for 1985-86. Now he reneged on his promise. We met his civil servants on November 5th, 1984 to spell out our strategy - but they denied that any such promise had been made.

On November 28th, 1984 Kenneth Baker, who had taken over as Minister for Housing and Local Government under Jenkin in the Department of the Environment, issued a statement in which he claimed we were living 'in cloud cuckoo land'...

Baker was clearly still reacting to the bloody nose we had given Jenkin in the previous summer. But there was more. We had already been told that our spending target for 1985 was to be 222 million, only 6 million more than in 1984. Now that they were refusing us the 130 million they had promised, and with our own budget for the next year set at 265 million, we were on course for yet another head-on confrontation with Whitehall...

Jenkin and Baker must have thought they had us on the run. In fact Jenkin was so confident that he announced that unless we came up with a way of balancing the books he would block our spending on those contracts. Good old Patrick. What he could not have known was that for several weeks Tony Byrne [a Militant fellow-traveller], as chairman of finance, had been negotiating to find the money we needed...

Budget Day was almost a formality. Tony Byrne announced that we required 265 million for the coming year. But the Government said we must not spend more than 222 million. So, he announced, we would not set a rate - and we didn't. We knew there was no legal requirement to do so until June, so we postponed the decision until then.

But a move in the game which was totally outside our control was about to change events. The Audit Commission, whose job was to monitor local government finances, appointed a new district auditor, Tim McMahon...

Now McMahon came down on us like a ton of bricks, and it was his report which would eventually land us in court, fighting the legal battle against surcharge and disqualification...

One option was to go for a twenty per cent rise, but Tony Byrne pointed out that even that wouldn't balance the books, and in any case the unions and the District Labour Party were absolutely opposed to an increase of that magnitude. So at a series of meetings in the run-up to Budget Day we hit on a figure of nine per cent for the rate rise.

But four days before the budget meeting, the bombshell dropped... McMahon was going for us anyway. He claimed that by not setting a rate by June 1st we had already incurred losses of the interest on rates which would have been levied. He calculated they amounted to 106,103, and notified us that he was going ahead with his move to hold us all responsible for that amount because of our 'wilful misconduct'. What's more, as the amount we were supposed to have lost the city totalled more than 2,000 for each of us, that meant we were liable for disqualification from office as councillors for a period of five years...

We had stuck together, and all of us were convinced that there was nothing illegal in delaying the rate until June 14th. So the notices of surcharge were still a shock, of that there's no doubt, though I am not sure that we saw it as a serious threat. Certainly the idea that they really might disqualify us from office never entered our heads.

Once we had set the rate there was an obvious discrepancy between planned income and planned expenditure. We then had a responsibility either to accept the consequences of the shortfall, or to bridge the gap, which in real terms meant making cuts. Or we could take a stand, and reinvigorate the campaign to get more money from the Government.

The options were not exclusive, so Tony Byrne began a long running series of Finance and Strategy meetings to try and reconcile the figures...

The situation was compounded by the Government policy of penalising high-spending councils. As long as we stuck to our guns on our budget policy, they penalised us and withheld grants... throughout July and August Tony Byrne tried behind the scenes to negotiate with Whitehall to allow us to borrow money from the Public Works Loan Board, the Government dug its heels in.

So it was calculated that by December, unless a solution was found, we would run out of money.

MILITANT ISSUE 31,000 REDUNDANCY NOTICES

That was when we took the fateful decision to issue redundancy notices to the whole of the council workforce...

On September 6th, 1985 we announced the decision. How it backfired on us. The trade unions revolted, their national officials went for us, and at Labour Party headquarters the decision was seized upon as a stick with which to beat Militant.

We argued, that by issuing redundancy notices we could also hammer home the sharp reality of our arguments: that unless more money was available to Liverpool from the central funds, then jobs really were on the line. There was never ever any intention to implement a single one of those 31,000 redundancy notices.

So we went ahead and drew them up, and unleashed an animal reaction that we simply could not control. We had badly miscalculated. None of us ever thought the reaction would be so vicious, but the truth was that the trade unions no longer had the will to battle on with us in a new campaign for more money from Whitehall...

We were paying the price for the months of inactivity when we went along with the London line of refusing to set a rate [advocated by some other Labour councils]. >From January through to June the workforce had watched us do nothing. The campaigning spirit had gone out of the fight. When suddenly we went for a nine per cent rate increase the shop stewards were four-square with us, but when we asked them to back us on the redundancy scheme the lid blew.

The next day, September 7th, the Joint Shop Stewards Committee met to discuss the plan. By a narrow majority they rejected the redundancy option. And I found myself in a head to head battle with a fellow Militant, Ian Lowes, a senior shop steward...

Now [Ian Lowes] went on record as saying: 'We are not going to accept any redundancy notices. As soon as the first is issued there will be all out action.' What's more I knew he had the power to stop us if he wanted. His members literally held the keys to the Town Hall...

And on September 16th, 1985 they used them. We had called a meeting of the council to approve the redundancy notices. But when we arrived that morning the Town Hall was locked and barred - our own security force, Ian's members, had turned against us and were occupying the building. It was stalemate. We couldn't hold a council meeting, so we couldn't pass the resolution needed to issue the redundancy notices. The only thing left to do was try to persuade the trade unions to change their minds, and support us.

I will never forget the meeting of the Joint Shop Stewards Committee which followed. Tony Byrne and I tried to persuade them of the logic of the choice. To say it was a volatile meeting is an understatement. The white collar unions like NALGO, the Town Hall union, ranted and raved at us. Only some of the manual workers stuck with us...

When the meeting resumed they voted to back us, but the price we paid was enormous. NALGO, NUPE - the National Union of Public Employees - and the teachers' unions walked out and refused to vote. The Joint Shop Stewards Committee was split wide open, and the unions who were against us staged their own meetings and began the lobby against us.

The rest, the blue collar unions, accepted the redundancy tactic, and called for an all-out strike against the Government. In a ballot the move was narrowly defeated, and all that materialised was a one-day strike on September 25th...

Even against that background I was horrified by the turn of events. People who only ten weeks earlier had backed us every inch of the way were now attacking us...

One thing didn't change. We still had to issue those notices, and we still had to find the money to bridge the gap. On September 27th, 1985 we sent letters to every one of the 31,000 workers breaking the news...

Some of the notices went in the post. Others were handed out in individual departments. But the ones which caused the greatest furore were those which went out by taxi... [T]here was nothing underhand or unusual about it when we chose to use taxis to deliver batches of redundancy notices on this occasion.

But the press and the Labour leadership seized on it, and twisted it out of all recognition. It gave Neil Kinnock the chance four days later, on October 1st, 1985, to launch that vitriolic attack on me and Militant at that year's Labour Party conference in Bournemouth...

We had our backs to the wall, and were heading for a tactical withdrawal. We had to balance the books to stay in office...

The move was hailed as a climb-down by our opponents. They crowed that we had finally given in to the pressure to set a legal budget. Even I admitted it was a temporary setback.

ON DEREK HATTON

I have sometimes been accused, even by my own friends in Militant, of playing the personality game: of allowing Derek Hatton to get in the way of the message.

Whether it was against Thatcher, Kinnock, Patrick Jenkin or Kenneth Baker, people thought twice about taking me on...

If you believe what was written by the media about me during those three years in office, I was some kind of Mafia figure: a corrupt city boss, hanging on to power by bully-boy tactics, with a private army of thugs protecting me. The press never got tired of sniping at my 'snappy' suits, the fact that I loved football, night-clubs, and enjoyed the company of women...

My position on the council meant that I was able to meet the players and management at Goodison Park [home of Everton football club] on the kind of terms that would never have been possible years ago, and for that I'm enormously grateful...

As for my violent outbursts, and the temper about which everyone talks so much, there is a degree of truth in it...

There is no doubt that because I behave the way I do, and because of the success I achieved, I made enemies. There were threats against me, few face to face, and many anonymous. Yet when I hurled threats back those same people would go running to the press and accuse me of 'bully-boy' tactics. Others tried to smear me, and of course, there were those who went further, and tried to have me convicted of corruption, with allegations that I had fiddled my expenses and that I had been involved in shady deals over planning applications...

[The allegations of corruption] blew up because a Knowsley councillor, Tony Beyga, who is a long-time friend, was involved with the company making [a] planning application. What's more it was all absolute nonsense. I didn't have the power to put through a planning application by myself, and even if I had, I would not have been so stupid...

The media had a field day, but that was nothing new, and when they ran out of steam on the fraud investigation, they could always fall back on one of their favourite topics - Hatton's Army.

'HATTON'S ARMY'

Yes, [the Council Security force] wore uniforms, which were heavy-duty green weatherproof jackets. Yes, they were loyal to us, and yes, some of them were heavy-looking lads, the sort who might handle themselves well in a spot of trouble. After all they were security men, not nursemaids. Some of them were, and are, Militant supporters but there are two thousand of those now in Liverpool. To hear the stories which were told you would have thought they were the praetorian guard, lined up and waiting to raise their spears against anyone who tried to challenge us.

There were occasions, I will concede, when some of them got out of hand, and went over the top, notably at news conferences...

It was at that time that the first accusation of 'jobs for the boys' came up. Eric Wright, the ex-bobby who had run the security force, was retiring, and we advertised the post...

Among the applicants was Dave Ware. Many of us knew him, myself included as he lived out in my part of Liverpool, three hundred yards away from my own home...

As soon as we announced [Ware's] appointment at the end of September 1983 the balloon went up in the press. 'Top job for Hatton's neighbour', they screamed...

It wasn't surprising, I suppose, that the men in the [security] force saw themselves as the elite. We had doubled their numbers, ended privatisation and given them an important role to play. We had created new jobs for many of them, so we now had a mass of people who felt a compelling loyalty towards us... some of it personal loyalty, some of it political...

Some evenings, as a matter of course, members of the security force would call on Shirley [Hatton's wife] and myself at home to check that everything was all right. Equally Dave Ware would come round sometimes to spend the evening with Shirley and me. He was never there as a minder, but it was comforting to know that if trouble did materialise he was close at hand.

ON SAM BOND

A year later, on October 9th, 1984, it was 'jobs for the boys' all over again as far as the press was concerned. This time the opposition were screaming and shouting about the appointment of a black Londoner, Sampson Bond, as principal race relations adviser.

Given that many people were, at that time, criticising our race relations policy, it was hypocritical that they should criticise the man we appointed to supervise its implementation. They didn't agree with the policy. They were, then, hardly likely to agree with our choice of the person best suited for the job.

Sam Bond was a twenty-six-year-old council worker from Brent. His own union, NALGO, and members of the anti-Militant black caucus of the Liverpool Race Relations Liaison Committee all criticised him for his lack of qualifications. Yet in race relations there are no such things as formal qualifications...

It was the one issue which separated us from certain black groups in Toxteth. The day after his appointment a group of them even stormed into my office at the municipal buildings and virtually held me hostage for five hours, refusing to leave until we suspended his appointment. To keep them quiet and get them out of the building we told them we would re-advertise the job. It was the only way of defusing the situation...

The view of Militant... has always been that while accepting there is discrimination, the problems of the black community are part of the overall struggle. It is a class problem, and a Socialist problem, and must be solved within that wide framework.

To do otherwise is to alienate many white working-class people from identifying with the struggle...

I make no apologies for the line we took. I still maintain to this day that it was the right approach...

Sam Bond's appointment was vital to us. He took the Militant view of race relations...

What really disappointed me politically though was the support that their arguments attracted within the Town Hall, where members of NALGO in particular refused to work with Sam. He was attacked at public meetings, and his colleagues in the union refused to recognise his appointment. They refused to connect telephone calls to his office and made his job impossible.

It's true to say that right through to the end of 1985 Sam Bond was a target for trade unionists who continued to boycott him, and prevent him fulfilling his role.