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Tory cynicism on Co-ops

David Rodgers on the new mutualism debate

The battle lines between the left and right of British politics have always been drawn between the role of the state and the role of the private sector. The role of co-operative and mutual enterprise as an alternative to both the state and the private sector as provider of essential services barely figured in the debates which dominated this political front-line.

Times have changed. In the run-up to this general election both Labour and the Conservatives are vying to be seen as the party supporting the ‘John Lewis' co-operative and mutual enterprise approach as an alternative to state service provision. The public manifestation of Conservative support has been the establishment of The Conservative Co-operative Movement by David Cameron and his party's support for public sector workers, like teachers, having the right to quit public employment and contract their services back through the creation of co-operatives. The Labour Party public commitments have been the Cabinet Office's recent publication of ‘Mutual Benefit – giving people power over Public Services', the support for the development of Co-operative Trust schools (of which there are 35 already in operation and unlike the Conservative's proposals, have members drawn from service users are well as providers) and the declaration by Labour controlled Lambeth Council that it intended to become the first Co-operative Borough.

Centre stage

Why is it that the potential of co-operatives and mutual forms of enterprise has moved centre stage? Is it a genuine renewal of interest in the potential of co-operative and mutual forms of enterprise or simply a cynical move by both parties in a closely fought election to glean votes from wherever they can be found? Cynics on the left will warn that Cameron's interest is simply another manifestation of his party's desire to reduce the size of the state. They will point to the editorial in the Financial Times on 16th February, the day after Cameron's announcement of Conservative support for public service co-operatives, which saw them potentially as just as another step on the road to private sector efficiency. They will also point to the fact that the two people who have served as chairman of the Conservative Co-operative Movement (yes, it is the preferred designation, even though the current chairman is a woman) have been appointed by David Cameron; a clear breach of the fundamental Co-operative Principle that co-operatives should be democratically controlled by their members. Cynics on the right will ask why, having been in power for so long, Labour has not done more to encourage the development of the co-operative and mutual sector as provider of public services.

There is, however, a more rational explanation than the cynical clamour for votes. In the aftermath of the global financial crisis politicians of all persuasions are beginning to see that co-operatives and mutual enterprises have a capacity to aid economic recovery. Those with detailed knowledge will know of the report from the International Labour Organisation which shows the resilience of the co-operative business model at times of economic crisis. They will see that in the UK the Co-operative sector contributes £30 billion annually to our economy and in Europe there are two hundred and fifty thousand co-operative enterprises with one hundred and sixty million members, an annual turnover of £300 billion, creating over five million jobs.

Reduced capacity of the state

Whoever leads the next government will lead a government burdened with debt. Whether their view is that this is a necessary debt burden from bail-out of the privately-run banks to prevent the collapse of the global financial system and a full blown depression or the result of unwise spending by the previous government, they will understand that the debt burden reduces capacity of the state to meet society's need for essential services. They will also understand that the global economic crisis has reduced the capacity of the private enterprise sector to fill the void in service provision and destroyed any attraction for what Tessa Jowell, as Cabinet Minister, described as ‘cowboy capitalism'. They will see the potential and necessity of encouraging and supporting co-operative and mutual enterprise if this void in the capacity to provide services is to be filled.

But the most astute of this new intake of government ministers and parliamentarians will also see that co-operatives and mutual enterprises are an essential part of a vibrant and balanced economy. They will understand that mutuality is not a ‘quick fix' way of reducing public expenditure, but a different way of doing business that engages the talents of service users and providers. They will recognise that co-operatives and mutuals are a specific sector or the economy, a sector with which government needs to engage if essential goods and services are to be provided as part of a robust and sustainable economic future.