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International Socialism, November 1975


Peter Martin

The Rates Explosion


From International Socialism, No.83, November 1975, pp.30-31.
Transcribed & marked up by by Einde O’Callaghan for ETOL.


The Rates Explosion: How to Defuse It
A Communist Party pamphlet, 15p.

Mention ‘ratepayer’ to a local government worker and you win send shivers down his spine. Millions of ordinary people pay rates, of course, but the word has become synonymous with those seeking to reduce public spending by cutting services and staff.

Every year there is a storm over rates but this year the clouds have been blacker than ever. What with a shortfall in last year’s government grant and massive inflation, many councils have increased their rates by as much as 80 per cent. For many families this means more than £2 per week – far larger than the rent increases planned by councils for later this year.

At the same time, the government, in its Christmas message of goodwill to the public service (the infamous Circular 171/74, dated 23 December), instructed local authorities to provide for ‘nil growth’ in expenditure. More recently, Crosland has toughened this up. In practice this has meant the withdrawal of certain social services, abandoning housing programmes, increasing class sizes in schools, and freezing recruitment. One London borough raised the price of luncheon club meals from 9p to 2lp and made it a weekly rather than a daily service. One Tory councillor is reported to have said:

‘Because they [OAPs] will only get one a week, they will enjoy it more.’

In certain areas there has been some resistance to the cuts, especially in education: in Richmond, for example, teachers and parents forced concessions out of the council. But, in general, it is the ratepayers’ action groups that have made the running. Aided and abetted by the press (especially the two London evening papers), they have run a campaign which lays the blame for the chaos of local government finance on wasteful expenditure and gross overstaffing. Their main cry is for town hall sackings; and, of course, being dominated by Tory businessmen, they are able to buy those services such as health and education they are so ready to deprive working people of. While the Mayoral Rolls and the Chairman’s reception lay most councils open to justified criticism, it is not here that the real ‘waste’ should be sought. In London the Labour GLC has just abandoned its municipalisation programme, one of the stars of its election manifesto.

Resistance to the decision to slash £50 million from the capital housing budget cost Gladys Dimson her job as Labour’s housing supremo. London has half the nation’s homeless and over a million of its seven million inhabitants live in slums – in homes without a bath, hot running water or inside toilet Labour’s housing strategy collapsed because of the ‘chronically heavy weight’ of interest charges, as the Leader of the Council put it. Of a housing revenue budget of £170 million, £107 million disappears in debt charges. All in all the GLC’s interest payments represent £20 per week for each employee or £20 per year for each Londoner.

The ratepayers’ action groups, however, have little to say about how well their friends in the City are doing out of rates.

In short, the public is getting a fast deteriorating service at greater cost while the workers giving the service are having their conditions, their wages, and their very jobs threatened. Millions of trade unionists – and their children and parents – are affected: the unions under attack – NALGO, NUPE, NUT – are weak in themselves but would be a power to be reckoned with if they could mobilise their fellow trade unionists, the consumers of the services they give. As yet rank and file action has still to get off the ground, although teacher-parent action groups have met with some success.

It is important, then, to see a pamphlet on the subject of rates from the Communist Party, an organisation with sufficient industrial muscle to give such a campaign some weight and direction. Disturbing, then, to read a Communist Party pamphlet which does not mention once trade unionism or socialism. A sign of the times perhaps? The pamphlet does contain some interesting information – facts and figures – on debts and interest charges but mainly concentrates on the unfairness of the rating system, proposing in its place a local income tax. Unfair the rating system undoubtedly is (bearing no relation to the ability to pay and so on) but its reform will not reverse the attack on the welfare state. The pamphlet completely fails to place the rates explosion in its political context. The explosion would have been an even bigger one had so many councils not pruned their budgets. The mounting burden of interest charges and inflation are creating the explosion and no amount of tinkering with the rating system will change the economic situation. Indeed no one would gather from the pamphlet that British capitalism is in deep crisis; and, as we saw in the Thirties, one of the first rallying cries of the right in a crisis is for cuts in public spending.

Labour won’t bail local government out (through a hugely increased Rate Support Grant) because its priorities are elsewhere – in the preservation of the capitalist system. It prefers to spend as much on debt interest and defence combined as on old age pensions and other social security benefits; it prefers to spend approximately the same on defence as on housing, health or education.

Barbara Castle put it in a nutshell when she said that ‘most of the additional wealth which the country creates in the next few years is likely to have to be used to salvage our balance of payments and increase investment.’ Such a statement makes nonsense of the talk in the Social Contract about improving the social wage and this is the central issue – and not rate reform (however much we may support it). An attack on the public service, on the welfare state is a direct attack on working-class living standards, a classic example of reducing consumption to expand production.

While the Communist Party urges ‘affiliated unions and Constituency Labour Parties (to) press the Labour Party and TUC to demand of the government that it immediately decides to introduce a local income tax and set up a working party to prepare the details’, a battle will be waged against the priorities of capitalism. The example of George Lansbury and Poplar Council awaits emulation.

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