Municipal socialism is the fallback of the Labour left. If the hope of a left wing Corbyn government has gone, maybe activists can fight for left wing councils instead.
These can make positive changes in people’s lives, the thinking goes, and demonstrate an alternative to both Tory rule and Keir Starmer’s Labour leadership. They could become a new left wing stronghold inside Labour.
The main example is Preston, where the Labour council has what it calls a “community wealth building” strategy.
This involves procuring services from local businesses with conditions such as paying a living wage.
The council also enlists “anchor institutions”—Lancashire County Council, Lancashire Police, Preston College and the University of Central Lancashire—to follow its lead. And it wants to set up a regional co-op bank alongside “community‑owned” businesses.
Delegates at Labour’s conference earlier this year voted to support community wealth building. A new left wing electoral challenge to Labour in Liverpool also points to Preston as an example to follow.
But there are some not so proud sides to Preston council’s record. It still makes cuts—£600,000’s worth this year alone.
That’s because the municipal socialism of today’s Labour left is a strategy designed to dodge direct confrontation with the government or state. Instead, it’s about trying to use the market for the left’s own ends.
But the priority for businesses—even small ones, local ones, community-owned or cooperative ones—is profit.
They all must compete to survive and make as much money, often against the multinationals they’re supposed to be a break from.
There’s a very recent warning from perhaps an unlikely source—the Tory takeover of Liverpool council this year.
Liverpool was run by a right wing Labour leadership, but it also tried to award council contracts to locally‑based companies.
Some of this was apparently corrupt. But the council also had its own company to run previously privatised services.
The Tories moved in earlier this year to take over the council, slamming the preference for local businesses as “at worst, an attempt to stifle healthy competition”.
It recommended that all services be opened back up to the market.
What could a municipal socialist council do if a Tory government declared war on it? Preston council says it works well within legal demands for “social value”—a law brought in under a Tory government that rests on privatisation and austerity.
But how far can you get working within the law—especially when it’s wielded against you by a Tory government as in Liverpool?
The Labour left of the 1980s also took refuge in municipal socialism. They had control of many more councils than the left does now, including the Greater London Council.
They also tried a strategy of supporting “community‑owned” businesses and co-ops. The Greater London Council set up an enterprise board—known as Gleb—to do just that.
In practice, it created very few jobs. As its chair Tony Milward wrote, “In most cases Gleb’s ‘investment’ offered a temporary reprieve before commercial pressures took their toll and the companies were forced into liquidation.
“On a number of occasions it found itself supporting atrocious employers and business people of dubious financial integrity.”
Meanwhile in the major confrontations with the Tory government, the councils shied away from a fight.
As the Tories pushed austerity, Labour councils said they had a policy of no cuts, no rent rises, and no tax rises. They all ended up doing all three.
They put staying in office ahead of breaking the law. Their strategy—focussed on elections, council meetings and institutions—had done nothing to build up workers.
Today’s Labour left looks to the municipal socialism of the 1980s as an example to follow.
But if it is time for something different, that means no repeat of the failed strategy of the Labour Party.