The last 18 months have been a period of profound and unprecedented change for our economy, and as a consequence, our wider society. In the wake of the credit crunch and the near meltdown in the banking sector, people have made it very clear that economic recovery should bring with it different and stronger relationships between the public and organisations that exert influence in their lives.
In confronting the big challenges ahead of us, whether it’s rebuilding our economy, tackling climate change or protecting frontline public services – the need for collective action is greater than ever. This is a moment for mutualism, which offers us the opportunity to take collective action in step with individual aspiration, drawing on the values and practices of the cooperative movement and today’s Coop party.
Underpinned by principles of trust, reciprocity and common ownership – co-operative and mutual organisations exist solely to provide a service for their members, placing long-term social returns ahead of short-term private gain.
As democratic organisations they are accountable to all those with a stake in their success – giving users, employees and the wider community a real say in how they are run. At their best, they combine the virtues of the private and public sector – efficiency and values, delivering power into the hands of the many and not the few.
While we can rightly be proud of our record in government, such as the creation of more than 120 NHS Foundation Trusts and more than 50 co-operative trust schools – it is time for mutualism to take centre stage once again in Labour’s vision for the future.
I want to pay tribute to the work Tessa Jowell did in promoting these issues while we were in government – and I’m pleased this work is continuing through the commission on ownership, which she launched.
As the Labour and co-operative movement begins the process of mapping out a new agenda for reforming our economic, public and civic institutions I believe mutual and co-operative principles can play an important role. Two areas I’d highlight in particular are our financial and broadcasting sectors.
Our economy is still in a fragile state – with the recovery put at risk by the Tory-Lib Dem government’s reckless budget. If we are to rebalance our economy, we do not only need to reduce the deficit in a way that promotes jobs and growth, we must also learn the lessons of the past by reforming the private sector consistent with our values.
Cooperative banks, building societies and credit unions all embody the best of the mutual tradition – meeting the needs of consumers while also promoting a model of ethical, values-led businesses, behaving responsibly in an industry where too many have not. This is driven by a belief that people can achieve most when they work together, and that business should seek to serve wider social ends not short-run profitability.
This is why we believe that a strong and vibrant mutual sector must be a key feature of our banking system in the years to come. A starting point should be the future of Northern Rock. A return to mutual ownership would put the bank back in the hands of its customers and allow it to take a long-term view of its members’ interests.
As we collectively count the costs of short-termism in banking, this could provide some much needed stability to help ensure that we do not repeat the mistakes of the past. It would also help bring valuable diversity to the financial services sector.
We should also be looking at other major organisations that shape public life in Britain that could be candidates for a different relationship between organisations and their users.
The mutual principle could also play a role in strengthening the democratic accountability of the BBC, as one of most treasured and important public institutions. Owned by the British public and paid for directly through each household’s TV licence, it is only right that ordinary members of the public should have a real say in how it is run.
Under a mutual model, membership of the BBC could be open to everyone who pays the licence fee. Members could have the right to elect representatives to a members’ council that would elect a majority of members of the BBC Trust. This would give licence fee payers a way to democratic voice in the priorities of the BBC.
Greater public engagement with members could also take place via the website, to ensure the BBC was providing responsive services. With those running the BBC directly accountable to their members, they would have a clear mandate to canvas licence fee payers on all major policy decisions. Ideas like this should be considered as major questions about the future of media policy are confronted in the coming months and years.
These are just a couple of examples of how the principles of mutualism – in the best co-operative traditions of our movement – offer Labour a guide to reshape our institutions according to our values. The moment for mutualism has arrived, and it offers us an opportunity to fundamentally recast the way that both our economy and our society operate around the inherent human values of equity, solidarity and reciprocity.
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