Legacy of Mersey's Militants

Scurrying office workers dodge teenagers and young mothers with tots in tow as they walk through Liverpool city centre. It's a mild early evening, the last vestiges of winter vanishing. At the end of Bold Street, St Luke's Church, bombed and left unrepaired as a memorial to Second World War dead, towers, damaged yet somehow indomitable, much like the city itself.

In a nearby wine-bar, one Scouser, once in the thick of city politics in the Eighties, perches on a bar stool. No, thank you, he doesn't want to be named. But he has opinions, if you care to listen. "They are out to get him, aren't they?" he cackles. "They're out to get him."

He is referring to Derek Hatton - "Degsy". It's a few days before the end of the former city council deputy leader's latest brush with the law. And like Degsy's other legal run-ins, it will end with him walking free from court. He was acquitted last week of carrying out an insurance scam.

For many Liverpudlians, Hatton's return to the limelight awoke a restless ghost that has never quite been laid to rest: memories of the turbulent days when, as the public face of the Militant Tendency-run Liverpool City Council, he led a revolt against government spending cuts. In spring 1985, the council's refusal to set a legal budget marked Liverpool as a hotbed of municipal revolt. In Militant's Liverpool roost it was Mr Hatton who crowed loudest, front-man in a game of brinkmanship against the Tories. Some saw Militant as a beacon of resistance to radical Tory misrule; others said it was a sinister Trotskyite clique, with an iron grip on a town hall, hell-bent on taking on all comers in pursuit of socialist revolution. Public perception of the city has never been quite the same.

"Ten years ago Liverpool was in chaos," says Harry Rimmer, leader of the Labour group, the biggest party on the hung council. "It was dealt a series of traumas, with Hatton and his associates calling the shots. The image of the city was dealt big blows."

Our Scouser takes another slug of beer. "The Militant years have been blown out of proportion. The Militant legacy isn't really the issue here. It was all a long time ago. But feelings still run deep." He suddenly laughs. "Besides, haven't you heard that we're all Texans now?"

Oil and gas have been discovered in Liverpool bay. One oil company, Hamilton Oil, has set up an office. It joins Sony and other businesses that recently arrived in town. The smart money expects a mini-boom.

Christopher Gibaud is chief executive of the Mersey Partnership. His job is to promote the "new Liverpool". He says he has to undo years of Militant-inflicted damage. "A few years ago, the reaction was, `Doesn't Derek Hatton run that place, and wasn't there a riot there a few years ago?'" Gibaud sighs.

Now regeneration projects such as the flagship Albert Dock have replaced some of Liverpool's derelict landscape with gleaming offices, homes and leisure centres. Liverpool's population, which has slumped from 750,000 to 450,000 since 1970, depleting the council's revenue base, has levelled.

Planned regeneration projects are backed by £1.6bn of money from the European Union, the Government, the council and business. The days when the council ferried redundancy notices to staff by taxi, at night, are fading into history - as are memories of how in 1986 Hatton and 46 Labour councillors were surcharged and banned from holding public office.

Not that Mr Rigby is painting Liverpool as Shangri-La. The city has £800m of debt. Its council tax is the highest in the country. Unemployment stands at 20 per cent, twice the national average. The EU money is stamped with an Objective One tag, saying Merseyside is one of the most deprived areas of the union. More cuts in council jobs and services are expected. Scenes of drug-related crime flicker on our television screens.

But a decade after Militant,Mr Rimmer says Liverpool tackles its problems differently. Confrontation is out; the buzzword is "partnership between the council, business and government". Their challenge: to revive a city founded on Empire and Atlantic-facing port trades, slavery and sugar, when today Britain's gaze is fixed towards Europe and hi-tech industries.

Mr Rimmer reckons there is no point taking on the Government Eighties- style, because you can't win, as the "smart-alec Militant ultra-left found out". Spending money you don't have, while taking on an elected national government, is a doomed strategy. This, he says, is the hard lesson learnt from the Militant days.

Others are more ambivalent. "There was a negative legacy and a positive one," says Professor Michael Parkinson of Liverpool's John Moores University. "We are still paying for some of the financial deals that were done by the council then. But the really important part is that it frightened people here. It made them say, `We really must stop blaming other people for our problems. We must put our own house in order'. "

Not everyone agrees with the new approach. "The current state of Liverpool, and its finances, is an absolute scandal," says Tony Mulhearn, president of the Liverpool District Labour Party during the Militant era. "If this is post-Militant tranquillity, give me the Eighties." Mr Mulhearn was one of the Militants surcharged, banned and then expelled from the Labour Party in 1986 during the town hall rebellion.

David Cotterill, Militant organiser, says: "There is a legacy in concrete terms - we built 5,000 houses and leisure centres - and in terms of raised consciousness. We created 15,000 jobs in the local building industry. We never reneged on promises." Mulhearn and Cotterill are at least willing to defend their policies. Michael Bolland and Frank Hegarty, the two Militant Labour (as Militant was called after the expulsions from the Labour Party) members still on the council simply refuse to return calls.

Scousers remain grateful for the Militant-built homes. "I was born in tenements, one of 13 children," says Madeline Gilbertson, a middle- aged woman. She lives just south of the City centre, in district L1, on an estate of prim council bungalows and flats. "If it wasn't for Militant, I wouldn't be living here."

Militant had to borrow from foreign banks to fund itsschemes. It plunged Liverpool's rate-capped council's finances into the red, in which they still languish. Some add that today the council is still picking up the tab for largesse dispensed to cronies by Militant 10 years ago.

"There was a lot of revenue that was never collected in the old days," explains David Williams, director of the Open Eye Photography gallery on Bold Street. "We had contacts with Militant and we got zero-rated."

"Militant poked their fingers in many pies," says Michael Postlethwaite, who works for a top building surveyors' firm in Liverpool. Despite allegations of sleaze, however, the police probes and court cases resulting from them have drawn a blank.

But as Mr Hatton walked free from court last week, trailing the past behind him, a problem likely to test the council's new approach was dominating the present. "There has been an unholy row about how the Objective One money should be spent," says Professor Parkinson. "It's a storm in a teacup ... but it's a big storm."

Mike Storey, leader of the LibDem opposition on the council, has railed against "hidebound government bureaucrats" providing EU backing for suspect projects and then keeping approved schemes waiting for money for up to a year. On a recent visit, Michael Heseltine, the President of the Board of Trade and former "Minister for Mersey" after the 1981 Toxteth riots, rebuffed claims by local business that the public sector had hijacked the EU scheme.

And there is simmering discontent in Labour ranks. In the Eighties, Keith Hackett fought against Militant's grip on Merseyside. Their strategy, he says, was Militant first, Liverpool second. Two weeks ago Mr Hackett quit the council. "I resigned over the appalling state of services and the complete failure of the council to do anything to sort out the dreadful mess over Objective One," he says.

EU regeneration guidelines have been torn up, Mr Hackett says. "The council is allowing the Government to do anything it pleases with the funding, to piss it against the wall, which is what's been done with all the regeneration money that's come into the City through other schemes." He says people living in his Abercrombie ward, next to Toxteth, have not benefited from regeneration. Helping local people is too low a priority. The business of business rules.

As for Liverpool, Mr Hackett argues that the town is in thrall to an old-style, right-wing Labour Party machine, of the sort that often dominated the city long before Militant. He doesn't think much of the city's much- vaunted progress. "The system has reinvented itself," he shrugs. "It's as secretive, manipulative and ruthless as ever."

Back in Bold Street, two young men, one with long hippie hair, the other clean-cut, slide up to a dustbin, kneel down and cagily stick on a poster. They look a little spaced. "The Militant legacy?" says the clean-cut one. "I don't know about that. You mean the Derek Hatton sort of thing. I haven't a clue. Young people don't really talk about it, but the older people do." He shrugs. He and his mate move on, looking for the next bin.