The previous year, the Labour conference had mandated the party to support the illegal no-rate-fixing rebellion, but in front of the assembled delegates in October 1985 Kinnock used the
deteriorating situation in Liverpool to turn on its council’s antics, thundering out against:
the grotesque chaos of a Labour council – a
Labour
council – hiring taxis to scuttle round the city handing out redundancy notices to its own workers. I
am telling you, no matter how entertaining, how fulfilling to short-term egos – [heckling] I’m telling you and you’ll listen – I’m telling you, you can’t
play politics with people’s jobs and with people’s services.
At this, Liverpool’s deputy leader, Derek Hatton, who was in the hall, started shouting ‘liar! liar!’ at his party leader, and booing rang out from a section
of
the audience. But as Kinnock kept going, raising his voice above the jeers, others found the courage of his convictions and started clapping and then cheering. It was more
than a moment of political theatre, it was a public declaration that a
putsch
was being launched, for Militant, also known as the Revolutionary Socialist League, was a tightly disciplined
force which had infiltrated not just constituency parties and local councils but trade unions too, and employed more full-time organizers than did the Labour Party. For his part, Hatton –
surrounded by his personal bodyguards – seemed unconcerned by the approaching Night of the Long Knives, but, as he would soon discover, Militant’s hold on power rested upon its ability
to operate within the Labour Party. After a series of hearings, in 1986 Hatton was among a number of Militant operatives expelled from the party (though after 1987 four Militant-supporting Labour
MPs were returned to Parliament).
EN47
Meanwhile, to stave off the shutdown of all its services, Liverpool adopted the un-Trotskyite contingency of turning to Swiss banks for emergency credit. There, and in the other flashpoints of
civic insurrection, the revolt was finally brought to heel after the councillors who had delayed setting a rate were adjudged by the district auditor to be engaging in professional misconduct,
given a five-year disqualification from standing for office and deemed personally liable for the interest surcharge. They had given the government a fright all the same, the prime minister having
chaired a special committee over the winter of 1985/6 to work out what to do if the councils went bankrupt. The conclusion was that a breakdown into violence was likely and that the commissioners
the government would then appoint to run the cities would need the protection of the police and armed forces. ‘As we considered the various candidates,’ the minister responsible,
Kenneth Baker, later admitted, ‘the shortlist became shorter and shorter and actually narrowed down to just one person.’
19
If more
than one council had kept up the insurrection, the government would have been in trouble.
The climbdown by the rebel authorities represented only a qualified victory for Downing Street. It might have been comforting to imagine that the offending councils were being successfully
compelled to adopt fiscal and budgetary discipline, but evidence duly built up that they were, in fact, turning to increasingly complicated accounting devices to hide their real priorities. Far
from being concluded, the power struggle between local and central government was poised to enter a more intensive phase. In April 1986, local government was reorganized, with the abolition of the
six metropolitan counties
EN48
and the Greater London Council. With the GLC’s
former powers over transport, planning and
the fire and police services transferred to non-elected boards representing the constituent borough councils, the capital thus found itself in the peculiar position of being one of the
world’s greatest cities but without an elected city administration. The removal of this overarching tier of metropolitan democracy fitted in with Whitehall’s growing conviction that
quasi-autonomous non-governmental organizations (quangos) could make a better job of strategic planning and encouraging investment than another layer of elected politicians. The experience of
Heseltine’s Development Corporations for Merseyside and London Docklands seemed even to suggest that urban regeneration was made easier without the active intrusion of local democracy.
Certainly, the disbandment of the six metropolitan counties caused noticeably little stir. Created as recently as 1974, they lacked a historic sense of identity, straddling communities that often
felt themselves distinct from one another, and those of their powers that did not transfer to quangos were handed back to the old town and city corporations which more naturally appealed to local
loyalties. The dismemberment of the GLC was different, since it was London itself that lost its unified democratic assembly. Opinion polls suggested that the GLC’s abolition was opposed by
three quarters of Londoners and in the London borough elections of May 1986 the Conservatives were severely punished.
If the government imagined that removing Ken Livingstone’s GLC power base would rid the capital of a leader who combined sneering at the royal family with providing a platform for Sinn
Fein, then they were to be speedily disabused since there were plenty of other municipal socialists ready to carry on the struggle. Lambeth council ruled that none of its publications could include
the ‘discriminatory’ word ‘family’, though it did place advertisements making it clear that some senior council jobs were only open to black applicants. It also caused
considerable irritation by proposing to spend £5 million renaming twenty-eight parks and civic buildings after black activists (Streatham Pool was to be ridd the Mangaliso Sobukwe Pool and
Brockwell Park rechristened Zephania Mothopeng Park). Haringey council launched courses in homosexuality for nursery school children. Brent council began recruiting 180 ‘race advisers’
to sit at the back of classrooms monitoring the ‘progress and attitudes’ of teachers towards their ethnic minority pupils (there were considerably more anti-racism advisers in
Brent’s schools than there were schools) – all at a time when the borough’s education budget was under pressure and senior teachers were resigning over what they claimed was a
culture of politically motivated witch hunts.
20
The Sun
fulminated against the agenda of the so-called ‘loony left’, colouring
the litany by adding some provocations of its own. Yet the reality was that in these councils and elsewhere the Labour vote continued to hold up, the
burden of funding the
policies falling disproportionately on those least likely to benefit from them.
The government responded with a slew of legislative acts clipping and curtailing the areas over which local authorities enjoyed direct control. The introduction of compulsory competitive
tendering forced town halls to award contracts through an auction in which private contractors were able to bid against ‘in-house’ council providers who had previously enjoyed a
monopoly over service provision. The process extended from tendering for constructing and maintaining roads in 1980, to refuse collection, cleaning and catering eight years later. After 1980,
council house tenants enjoyed the legal right to buy their own homes even where their local authority was ideologically opposed to selling them, while, after 1988, those who continued to rent were
given the right to transfer the management of their estates from the council to a not-for-profit housing association, if they so chose.
EN49
Until the
passage of Kenneth Baker’s Education Reform Act 1988, local authorities’ control of the state schools in their area extended to staff appointments and the allocation of resources within
schools. Baker’s act gave heads and school governors the right to manage how their budget allocation was spent and to decide who to appoint. They even gained the right, if parents voted for
it, to opt out of local authority control altogether, allowing them to run their own affairs, with funds provided directly and without interference from Whitehall, as ‘grant-maintained’
schools. There was no rush to embrace this freedom, with only fifty schools (out of twenty-four thousand) choosing to do so by the end of 1990.
21
Yet although grant-maintained status was abolished by Tony Blair’s government in 1997, it was resurrected three years later in the guise of academy schools. Two other facets of Baker’s
act aimed directly to undermine left-wing and ‘trendy’ priorities in the classroom. One was the abolition of the Inner London Education Authority (ILEA) which, under Tony Benn’s
former adviser, Frances Morrell, had particularly prioritized race and gender equality issues and championed such notions as teaching the children of immigrants in their ‘mother tongue’
rather than English. Its competences were devolved to borough level. The other change was the institution of a national curriculum to be taught in all schools, prescriptive in nature and designed
to ensure the basics of English, maths and science predominated in the classroom, with compulsory testing at the ages of seven, eleven and fourteen. A national curriculum along these lines would
permit easier comparisons to be made between succeeding and failing schools, with visits by inspectors and the collation and publication of comparative statistics. With these ‘league
tables’ parents could supposedly make a more informed choice about where to send their children – schools
now being obliged to enrol all applicants unless they
were already full. Establishing a national curriculum and the mechanisms to go with it was a protracted process, however, and it was not until 1992 that the curriculum and the accompanying league
tables were launched.
Meanwhile, the government pushed ahead with devising a mechanism it hoped would spread more widely the financial burden of Labour’s remaining town hall priorities and, in the process, make
the Labour spendthrifts unelectable. The lever would be gradually to replace the rates with a poll tax, paid by every adult regardless of circumstances (save for the disabled, who would be
exempted). It was bizarre that a proposal comprehensively dismissed in the Department of the Environment’s white paper as recently as 1983 should have been resurrected so swiftly, but the
catalyst for the volte-face came from the Scottish Tories. Rates were calculated by valuing properties and assessing their rentable value. Home improvements and rising house prices therefore served
to put up the rates, and for this reason no revaluation of English and Welsh properties had been carried out since 1973. In Scotland, however, it was a legal requirement for a revaluation to be
held by 1985 (the last one having taken place in 1978), and there was widespread outrage among middle-class Scots as the new tax demands arrived; in Edinburgh the rates increased overnight by 40
per cent.
22
Such was the sulphuric mood against the rate rises at the Scottish Conservatives’ conference in May 1985 that it convinced the
Scottish secretary, George Younger, that the system should be replaced with a poll tax. Similarly shaken by the extent of anti-rates feeling was the deputy prime minister, Willie Whitelaw, when he
attended a meeting in the affluent Glasgow suburb of Bearsden. He promptly went to see Thatcher and told her something must be done. That Whitelaw’s opinions tended to be guided by a
perceptive instinct for the popular mood, rather than ideological zeal, made his judgement of particular value to the prime minister. Days later, a Cabinet committee began considering the problem
and in October came out in favour of the poll tax. What was more, if the new system was good enough for Scotland it was presumably good enough for England and Wales too (though not for Northern
Ireland, which remained immune from the reform). After all, a revaluation could not be postponed forever south of Berwick-upon-Tweed, and the longer it was put off the worse the English and Welsh
rates rise would eventually be. On 9 January 1986, the Cabinet approved in principle the poll tax. Officially it would be called the ‘community charge’, a term to which only its most
dogged defenders stuck in the increasingly bitter debates that attended its introduction.
During the fateful Cabinet meeting of 9 January, spirited opposition to the new tax might have been mounted by the former environment secretary, Michael Heseltine. Unfortunately, the ownership
of Westland helicopters
preceded the poll tax discussion on that day’s Cabinet agenda. Heseltine chose Westland’s fate as the cause over which to storm out of 10
Downing Street and announce his resignation to startled BBC reporters on the pavement outside, thereby losing the opportunity to influence the debate over the poll tax. The other sceptic who might
have taken a lead was Nigel Lawson. This was not surprising, given that its guiding principle that every able-bodied adult should make at least some contribution to the cost of local services ran
counter to the Chancellor’s efforts to remove the high marginal income tax rate on the low-paid by lifting the threshold so they would not pay any direct tax for the central government
services they used. The one aspect of the new proposal that Lawson did support was the nationalization of the business rate, which would thenceforth be fixed centrally and not at the whim of local
councillors. It was the change to how residents would be taxed that, he warned, ‘would be completely unworkable and politically catastrophic’.
23
However, he assumed its impracticality would become apparent before it was implemented, ensuring a U-turn and a proper examination of his own counter-proposal (which
resembled the council tax that was eventually introduced in 1993). His assumption was wrong because once the Cabinet’s approval had been secured for the poll tax it gathered its own
momentum.
What was not true was the notion that the new tax was the idea of a right-wing cabal. Although the free-market think tank the Adam Smith Institute produced a paper advocating a poll
tax,
EN50
this ran alongside the proposal being drawn up by government ministers rather than directly inspiring it. The two ministers most responsible
for devising the tax were Kenneth Baker and William Waldegrave, who came, respectively, from the centre and centre-left of the party, while the early enthusiast George Younger leaned towards the
‘wet’ wing of the Cabinet. Of the two environment secretaries responsible for the later stages of the policy, Nicholas Ridley was a ‘dry’ and Chris Patten – though
never a great enthusiast – was a ‘wet’. Blame for the poll tax thus crossed the Tories’ ideological divide, and far from being bounced into agreeing a policy they scarcely
understood, the rest of the Cabinet had ample time to register any doubts. It was, as Lawson pointed out, the product of ‘no less than two and a half years of intensive ministerial discussion
. . . Nor is it true that ministers were uninformed about how the tax would work in practice.’
24
They were given a full briefing at a
conference held at Chequers on 31 March 1985, during which none of them raised substantive objections; nor did they do so in the months thereafter while the detail was picked over in Cabinet
committee. A further three years elapsed before the poll tax was implemented in Scotland, and four years before it came in in England
and Wales, during which time no Cabinet
rebellion manifested itself beyond demands for greater ‘transitional’ relief grants from the Treasury to soften its impact. The responsibility was collective.