"When the third verse arrives, the mood shifts: “I’m going to make a good sharp axe/ Shining steel, tempered in the fire/ We’ll chop you down/ Like an old dead tree.” The axe represented the Communist Party. The dirty old town was capitalism, which the singer wanted felled.'

That makes sense because MacColl was an active Communist

"prostitutes who would start appearing the streets when weather permitted" does not make sense because prostitutes needed money regardless of the weather.