Tuesday, 15 June 2010

Can mutualism be Labour's new big idea?

A new approach could be needed in relation to how Labour sees the concept of social democracy and promoting equality if it found itself back in government in 2015. The Conservatives and Liberal Democrats in government are using the problem of Britain’s deficit as a way to promote a systematic rollback of the State and public services. By 2015 public services could be a shadow of its own self after the expected cuts and job losses. Any incoming new Labour government would find it exceptionally hard to rebuild the decimated public sector in a way that is sustainable and economically prudent.

For local and central government to rebuild trust with the citizen and promote social democracy and higher public spending would be an exceptionally hard task for a new Labour government within the next five years, especially if tax receipts are still weak, economic growth weak, and the deficit still the albatross slung around the collective neck of the cabinet.

In this context, if the above was correct in 2015, how can Labour rebuild confidence in the promotion of social democracy in a new era of fiscal restraint during a time when resources could be bare and money extremely tight even by the time it could return to government?

In Labour's 2010 manifesto it expressed support for the idea of mutualism. It said: “We want to see more local organisations run on co-operative principles with an expansion of Community Interest Companies and third-sector mutual organisations that reinvest profits for the public good.” The manifesto went on the commit to the mutualisation of British Waterways.

‘Mutualism’ can be defined in this case as a partnership between citizens that leads to a valued outcome. It encourages people to work together for the common good. It encourages cooperation, solidarity and the flowering of shared values and beliefs to lead to an end that benefits all. A Cabinet Office paper in 2009 explained that mutualism, or “co-production”, was a way of
“establishing a partnership between citizens and government... Citizens contribute more resources to achieving an outcome, share more responsibility and manage more risk in return for much greater control over resources and decisions.”

Social democrats could nod with approval the line “establishing a partnership between citizens and government”. The State provides the resources and the tools to enable citizens. This is different to the Conservatives’ ideas of a “Big Society”, in which the State is meant to withdraw from the provision of services and let individuals and get on with the job of providing them.


So, can Labour use mutualism as its new big idea? The ideals that mutualism and co-operatives espouse could be embraced by Labour in the post-credit crunch age. Indeed the Labour Party already enjoys a very significant historical partnership with the Co-operative movement, and shared ideas and ideals have contributed to the promotion of co-operatives and mutuals in our society.

But can mutualism promote a good society? Through mutualism and co-operatives, everyone is a stakeholder. Everyone has a voice and everyone has the ability to be part of an prosperous and decent society where power, resources and wealth can be shared more equitably. How? Local (and central) government can influence and encourage the growth of the non-profit sector in some public services. However, it must continue to oversee, monitor, support and regulate the non-profit sector in the provision of services to the public.

A good society could bloom in the public and private sectors through partnership of the State, co-operatives, as well as the voluntary and non-profit sectors to empower the citizen and give them a true voice in the way in which not only their services are run, but what they get out of them.

sure start

One can look at the success of SureStart. This is an example whereby government can provide the means for people to contribute for the common good - a classic example of the enabling State. Government funded SureStart centres, which in turn were provided by local authorities, as well as the voluntary, private and independent sectors.

Could this be the future of social democracy in the modern age where resources are scarce and the means to achieve them are also likely to be scarce? Sweden and other Nordic countries have experimented with housing co-operatives and in other areas. Indeed, the Labour-controlled Lambeth Council has decided to promote the mutualism and co-production by attempting to become the first ‘Co-operative Council’ in Britain. In its White Paper, Lambeth Council outlined that:
“It is vital that services adopt a ‘mixed market’ approach to service delivery. Numerous models already exist, which local areas can draw upon, such as neighbourhood management, contracted services, third sector provided services, public sector provided services, mutuals/co-operatives, arms length management organisations (ALMOs), Tenant Management Organisations (TMOs), foundation hospital trusts...”
Yet social democrats are also entitled to ask the question: what is the difference between co-production and voluntarism? Isn’t both about passing the buck, shifting the role from government to people as a way of washing their hands from responsibility to public services and the vulnerable? Certainly that has been some of the criticisms of foundation hospitals. If Labour was to embrace co-production as its ‘big idea” then how can it gather support for this venture? And, more importantly, can the ideology behind mutualism and co-production translate into viable policy? What areas of the public services can mutualism thrive? And which should be left alone? What is clear, however, that Labour must think anew how it can make the case for a good society.

Sunday, 13 June 2010

Why New Labour failed in forging the case for social democracy

Labour needs to return to a mature, respectful, modern social democratic agenda. New Labour tried to do this - it tried to marry the ‘traditional values’ and place it in the ‘modern setting’ that John Prescott alluded to. But New Labour did not succeed in marrying the timeless traditions of the party and placing it in a pragmatic setting. Of course the increased investment in public services, 600,000 children out of poverty, giving dignity to old-aged pensioners once more, the minimum wage, the Human Rights Act, civil partnerships and the equalization of the age of consent, aid to Africa and much more were wonderful successes of the last government. We should not forget these brilliant things.

Yet New Labour did not do enough to challenge the conservative orthodoxy with relation to the relationship between the individual and the state. It did not give clear credence to reminding people - especially high earners - of their responsibilities to society. Bankers earned huge bonuses whilst playing casino capitalism through the lax regulation of financial markets that hit ordinary people with repossessions and job losses when the chickens came home to roost during the recession. Tax rates were left unchanged at the top for the majority of the time Labour was in government. Any increases in indirect taxation, National Insurance, and other ‘stealth taxes’ only undermined the progressive taxation cause with which Labour should have shouted from the rooftops until it was red in the face. It also undermined the trust that citizens had with government, and as a result, trust in the State.

When citizens feel that the State is not listening, they do not feel empowered, and when they do not feel empowered then they feel that the government is on their back and turn to attack its very being. The whole purpose of social democracy is to empower those people who feel shut out of society. Solidarity with others. A collectivi st society. Promoting fairness and equality. That New Labour was aware of the feeling people still felt the State was not listening to them it is probably safe to say, but during the years of plenty - in respect of high tax revenue, economic growth and electoral success - it chose not to break a good thing and challenge and confront directly what Tony Blair promised to: the “forces of Conservatism”.

That New Labour did not attempt to radically re-alter the relationship between the citizen and State only undermined its cause. Using the State to make people feel fearful, concerned and worried when instead it should have been reassuring, respectful and tolerant by the promotion of ID Cards, the DNA database as well as numerous anti-terror laws and control orders only weakened the ability in peoples eyes of the state to be a force for good. It played into the hands of right-wing and conservative critiques of the ‘overbearing state’ and ‘big government’.

New Labour should have been more confident of its own mission and more confident of the ability of social democratic ideology to challenge conservative dogma about the State. If it did, it could have made the case confidently for being more progressive in dealing with the recession by rebalancing tax rates further so that indeed ‘those with the broadest shoulders’ did bear the biggest burden by making the new 50% rate permanent. It could have introduced the Future Jobs’ Fund earlier, therefore embedding the importance of using the State for positive ends and using government to help people when the private sector couldn’t. Financial regulation should have been tightened earlier. VAT could have fallen earlier together with increasing tax allowances for those on the smallest sums, thus making the tax system fairer on the worst off and balancing it with higher taxes in other areas (such as corporation and capital gains tax, which fell under Labour). It could have made the case more strongly for using the minimum wage to secure the basis for a living wage and eliminating low pay altogether.

While repeating the mistakes and disasters of the early 1980s must be avoided, Labour should use the current situation at Westminster to reinforce the ideological differences between the ‘ConDems’ and us. This means being more upfront and honest about that fact that Labour is the only party of progress that exists in the mainstream of British politics now. We should seize the moment. The Conservatives and LIberal Democrats are going to use the current situation with regards to the deficit as a way of solidifying the concept of the role of government as “bad” and will use public sector cuts, in the name of economic prudence, as a way of rolling back the State and reducing the importance of the public sector to a level that could bypass the damage done of the Thatcher years.

Whoever is the new leader of the party should remember the triumphs but also the mistakes of the New Labour years and attempt not just to rebuild the internal structure and morale of the party, but also look at the wider picture and be more brash and confident at forging a social democratic agenda for change together with making the case for the State as a force for good.

God Bless Dennis Skinner

This is the YouTube video I published a few weeks ago showing the Beast of Bolsover at his best, just before David Laws resigned. Over 6,000 views so far. Not bad for someone of pensionable age, as Gideon reminded us...

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