Forward, not back

Following Labour’s third election victory, Peter Hunt argues that mutuality should be at the heart of modern socialism

Months after the ballots closed, memories of the campaign remain fresh. Those of us with the experience of several general elections will have been struck by how under-whelmed the electorate was with Labour; how hard it was for us to inspire any real enthusiasm for the task at hand. How much time did we spend on the doorstep trying to convince doubters that they should vote for us? We listed our government’s achievements, told them how we were making things better. But how many of us ended up reverting to our most persuasive yet ultimately lamest argument – that we were not as bad as the alternative? Who ever imagined that winning a third term would be like this?

After eight years in power, the problem is significant – we still don’t know what new Labour is for. Do we really have a bold vision of the Britain that people can believe in, or do we just offer different management? Simply put, there is no narrative to new Labour, no story to tell. Unfortunately, there never has been. I don’t wish to be mean-spirited about this. I too, experienced the wave of optimism, the spirit of 1997, which brought Labour to power in the first place. Back then, it was more than just about getting rid of the Tories, we believed it was a new beginning for the country.

But what type of new beginning? Even then, we failed to articulate much more than that the election was really about an unspecified better future. We had specific pledges, yet the closest we came to developing a theme was the inference that we were ‘cleaner’ than the corrupt and discredited Tories. The electorate was mainly left to fill in the blanks.

Any salesman realises that they must know their product and believe in its properties if they are to succeed in convincing others of its worth. Doorstepping for Labour in the election was frustrating because the good things we know about our government don’t really impress voters, who are more interested in themes and directions than specifics. What we are selling must be simple, attractive and realistic at the same time. But we must also want to believe in it ourselves. So far we have been blessed with a hopeless opposition. This is luck. Now, we have a wonderful opportunity in our third term to put back what has been missing from the first eight years.

Why we are Labour

Active Labour Party members are attracted to the Party because they believe it is a vehicle for delivering social justice. They believe that Labour governments should do their best to give this to the country. For many years, in the minds of Labour activists, this has translated into a desire for government interventions that seek to deliver equality of outcome. The Labour of the Webbs and Shaw is still alive. It is odd that ideas rooted in the early 20th century were never properly updated to account for our advanced society. Instead, traditional Labour still wants a strong role for state and municipal authorities in ensuring fairness, by providing services directly. New Labour does not.

In the name of quality and efficiency, private businesses have continued to encroach on the traditional role of government service providers. The fundamental weakness is that this ignores the real need for public accountability, which has usually been transferred to unelected regulators.

In seeking to be ‘new’, Labour has thrown out its old baggage to be replaced by ‘what works’. At the core of Labour philosophy, the changing of clause IV may have stripped away outmoded and often failing mechanisms for achieving equality, but it left a void in the beating heart of Labour. This is fine for those who still fear the advance of staring-eyed state socialism, but it is not enough for those of us who need to believe in what we are doing, and draw our motivation from that. No wonder Party membership has fallen through the floor. Evidently, full-blooded socialism is a chimera that never made it into any Labour government. But we should not continue to fear redefining it. We must capture a sense of our Party’s purpose and genuinely try to put it into a modern context, rather than dealing with it as if it were an embarrassing elderly relative.

The Conservatives did better at defining their philosophy over two decades of government. The Tory message that individuals mattered more than society was attractive to many because it was aspirational, rewarding and simple. Everyone knew what Thatcher stood for. It was precisely why we hated her. But her approach remained popular with many voters. Simplistic and selfish though it was, it touched on an innate desire of people to feel they had more control of their lives. The popularity of her privatisations and housing sell-offs showed that there is a deep-rooted appetite for ownership and control in our country. We should not ignore this, but neither should we imitate it. In the cold light of day, the scorecard reads that Thatcher did indeed change society. Has Tony Blair?

Labour needs to stop apologising for being socialist – at least to ourselves – and instead try and define what this means in a relevant and useful way. It may be that social ownership is the key.

So why don’t we just go back to what most people understand to be traditional Labour? The answer is simple, if a little painful for the remaining true old Labour believers – it does not work. Indeed, every Labour leadership – both government and opposition – has found the same thing to be true. Some have ignored it and simply acted pragmatically, but only new Labour has finally admitted that it doesn’t work and shed any continuing loyalty to it. The problem that remains is that nothing has replaced the old statist orthodoxy, which shied away from rewarding successful individuals and levelled down the average in pursuit of equality. When new Labour tried to fill the gap, it came up with a selection box of unsatisfying initiatives that made third way, stakeholding, citizenship, localism and so forth look like more privatisation than anything else. The language is attractive but the substance has been lacking. No-one really knows what this is all about. It need not be like this. There are ideas on the left that could form the basis for an attractive narrative for our government. If we can place our Labour values into this, we can create a story that is every bit as attractive as Tory neoconservatism was in the 1980s and 1990s.

Socialist values

So if ‘socialism’ can motivate our members, can it be made attractive to voters? Clearly, it would be absurd to suggest that we should seek to base our appeal on ideology when there is no evidence that this is in demand. We do, however, need a narrative that is rooted in our socialist values. A new socialism is required that is radical in its application and has real substance. Not one that places the state in people’s faces, one that really puts the people in control. In 1999, a Guardian editorial posed the question, ‘Could mutualisation do for Labour what privatisation did for the Tories – give it a lasting political legacy?’

The growth of mutuality in this country over the last few years is evidence of a quiet revolution. The mutualisation of a range of public services, from leisure to health, housing to childcare, shows how it is genuinely possible to re-engage the end user, the citizen, with the services they need. The success of new mutual community businesses, such as football supporter trusts, show that ordinary people, properly motivated, are prepared to join and contribute to collective enterprises.

There are now over 110 football supporter trusts, with 75,000 new members; 31 NHS foundation trusts so far with many more in the pipeline and a membership already exceeding 400,000; 20 new producer-led GP out-of-hours mutuals; the prospect of large social housing mutuals following stock transfers; new mutuals in child care through Sure Start programmes; and there’s continued growth in leisure service mutuals. In all, there are already more that half a million more citizen members of new mutuals – a real growth of co-operative organisations and membership. What makes them special is that their members are entrusted with the social ownership of these bodies.

Ownership matters

To be able to engage ordinary people in large enterprises, it is essential to foster a kind of ownership that enables citizens to feel that institutions in which they have a stake are run on their behalf, and not for someone else’s vested interest. Over 150 years ago, progressive thinkers invented mutual structures – membership organisations that were committed to the members they served, often very large sections of the population. Many of these mutuals continue to thrive today, playing a distinct role in the market place.

In a modern context, this very structure is ideally suited for the provision of many public enterprises. Modern community mutuals can include all stakeholders, including government, by making management accountable to a board comprising employee, customer and government representatives, along with other stakeholders. Of course managers must have the freedom to make tough decisions, but this structure of accountability ensures that these decisions are made with the right interests in mind.

As well as addressing the weakness of the decision-making process in the traditional company structure, these models also provide many benefits in their own right, such as local community control, a constitutional role for employees, the encouragement of citizenship and the promotion of long-term thinking in the interests of the community. They achieve the basic objectives of efficiency and flexibility, but they also connect with their stakeholders far more effectively than many proprietary businesses. There is a host of examples of mutual enterprises in Britain (not to mention Europe and north America) taking on some of the old functions of the state far more efficiently and cost-effectively than the private sector ever could.

Who cares anyway?

This does beg the question of whether people really care about these things. The public can be offered all the opportunities in the world to participate, but these opportunities are worthless if people can’t be bothered to use them. Gordon Brown said recently: ‘One of the challenges we face is to find new ways of giving power away, so that local people can take decisions about their communities. Mutuality provides a practical way of ensuring that citizens have rights to go with their responsibilities and are enabled to play an active role in the decisions that affect their lives.’

The aim of mutualism in public enterprise is to blend the entrepreneurialism and responsiveness of the private sector with the social purpose of the public sector. This is achieved partly by giving a number of stakeholder groups an ownership stake, thus by-passing the tendency – manifested in both private and public sector organisations – to serve only one entrenched interest group, and partly through the granting of extra freedoms from day-to-day interference from government.

Staff, users and local specialists would have more of an input in deciding how standards could be improved and the particular needs of local communities met. This is done by making management accountable to an elected board, comprising employee, customer and government representatives. It is how it works in the examples above.

The honest answer to the question of whether people care is ‘sometimes’. It is fair to say that if things are running smoothly there is a natural tendency to leave well alone. However, when things go wrong everybody has a view on how to fix it, or at least an interest in berating those charged with sorting out the problems – ask any commuter. Once a crisis passes, interest wanes. Consequently, few people want to engage with any issue all of the time. We should probably be suspicious of those that do.

But one of the main causes of things going wrong or becoming unpopular is that providers are out of touch with their users. Keeping in touch with a cross-section of these important people, and hopefully not always the same ones, should be a good idea in principle.


American independence fighters famously wanted representation in return for their taxes. They didn’t all want to be MPs, but they needed the opportunity to be consulted through their representatives, with the sanction of changing them if they felt the need. It is the same today with public services, but parliament is too far removed from the provision of these services to be a meaningful body for accountability.

The things people care about from time to time, such as hospital waiting lists, residential care and transport systems, are those that have become too personal to be satisfactorily dealt with by distant politicians. MPs don’t run hospitals or trains, but the public pay for them and want from time to time to influence those that take the decisions that affect them. Consultation without rights is just a favour – which can be withdrawn as easily as it is given. The public must feel that they have the right to demand to be heard. The only way to guarantee this in a capitalist society is to confer rights of ownership on individuals. Ownership rights in our society are indisputable and offer the only guarantees that stake-holding is going to be meaning- ful. The time has come for real community ownership of our public enterprises.

Social justice

Soon enough we will be back to the doorsteps again. Before then we have the opportunity to use the next few years to turn the language of new Labour into something meaningful, relevant and attractive, but most of all real. There has never been a better time to turn to this co-operative socialism. It is rooted in Labour values. It is not spin or jargon loaded. It simply works. More than that, it gives us something higher to work for – the genuine empowerment of our citizens. It establishes a storyline by which we can be judged. It will help our members to feel part of a movement again and will allow voters to understand what Labour is for, how it wants to change society. Labour has a real chance to deliver social justice by sharing power with the people.

Peter Hunt is National Secretary of the Co-operative Party. This article was originally published in Renewal