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Thirty years ago Neil Kinnock gave a defiant speech at the Labour Party conference in Bournemouth. Famously, Kinnock warned the militant left of his party that their time was up; ‘impossible promises’ to their local electorates had led to ‘grotesque chaos’ within some Labour-led councils.

Such chaos was most notable in the Labour councils of Lambeth and Liverpool, although others also tried to hold out against the efforts of Conservative government to curb local government spending. In Lambeth the councillors responsible for not setting a legal budget were required to make compensatory repayments and were disqualified from office. In Liverpool, 31,000 of its staff were eventually issued with redundancy notices as the city effectively went bankrupt.

While arguably designed to buy time with central government in negotiating a funding settlement, it was this tactic that Neil Kinnock attacked directly when he addressed then Deputy Leader of Liverpool Council, Derek Hatton:

“I’ll tell you what happens with impossible promises. You start with far-fetched resolutions.  They are then pickled into a rigid dogma, a code, and you go through the years sticking to that, out-dated, misplaced, irrelevant to the real needs, and you end in the grotesque chaos of a Labour council – a Labour council - hiring taxis to scuttle round a city handing out redundancy notices to its own workers".

Neil Kinnock, Labour Party conference, Bournemouth, 11th October 1985

Thirty years later, the Labour Party’s centre of political gravity is shifting back to the left. The Party’s electorate now has over 610,000 full members, affiliate members and registered supporters ready to vote in the leadership contest next month. Of its 280,000 full members, 82,000 have joined since the election defeat of May 2015 – including one Derek Hatton, who rejoins the party after being expelled in 1986.  Speaking on BBC Radio 4 last year, Hatton recalled: "There was a lot of anger around...Thatcher had come to power and was taking more money off the local authority. So there was a mood in city, which was saying, 'Hang on a minute! What's going on here?'"

Fast-forward to 2015 and the same logic drives the success of Jeremy Corbyn’s leadership campaign. Corbyn has ignited a revival amongst activists within the party, many of whom, after decades of Blairite ‘modernisation’, feel their time has come again.

“There is a clear choice: to accept the Tories' race to the bottom on cuts or to set out a vision of a modern, innovative country.  We cannot cut our way to prosperity.”

Jeremy Corbyn

Corbyn is most popular with 18-29 year olds, who are thought to account for half of new members. While this is a welcome surge in youth engagement, the rapid ideological polarisation of our politics threatens a darker undercurrent.  By posing a binary choice between cuts or no cuts, there is a real risk that a hard left-leaning Labour party launches a purge on its candidates, where only opposition to austerity will do.  Aspiring councillors will be selected according their public commitment to make the ‘clear choice’ against cuts. Pragmatism or deal making won’t wash.

Where will this leave the devolution agenda? If local Labour councillors, elected mayors and MPs are selected and elected on a strict ‘no cuts’ platform will we see local authorities fail to agree legal budgets?  Will we witness the same kind of brinkmanship that took Liverpool and Lambeth to the wire with a Tory majority government in the 1980s? How will Osborne uphold his commitment to devolution to the city-regions (nine out of the ten largest of which are Labour led)? It would be politically untenable for him to allow such dissent and would inevitably result in a tightening of HM Treasury control, rather than a loosening of Whitehall’s centralised grip.  Previously I’ve argued that this government should demonstrate its commitment to devolution and localism by removing the trigger referenda and incentives for local authorities to freeze council tax. These steps would be nigh impossible if the Treasury felt under assault by Labour-led local authorities, and we must remember that rate capping and the poll tax were a deliberate response to the militant councils of the 1980s.

What about the collaborative efforts of Greater Manchester, which leads the way on newly devolved powers for growth and public services? Will the beating heart of the Northern Powerhouse, comprising nine Labour and one Conservative-led borough, weather the storm of internal party politics?  Even when striking its devolution deal in November last year, pressure from national Labour figures on Greater Manchester’s local authority leaders nearly served to derail talks at the 11th hour – largely on the grounds of cuts.

This blog isn’t an endorsement of cuts and austerity, or of one Labour leadership candidate versus another.  It’s a plea for local authorities to seize the biggest opportunity they’ve had in 30 years for devolution of strategic economic development and public services. Publically funded resources will inevitably be limited. Now is the time for canny pragmatism, collaboration and locally-led innovation.

Now that the chance of devolution is finally on the table, don’t blow it. 


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