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Mutuals and Co-ops Can Be The Very Best Option!

16th May 2016

The Quest for John Lewis Quality Public Services for Wales

Wales has often been characterised by a radical political tradition that exists to promote a vision of educated, articulate, empowered local communities that act on their own behalf rather than having others acting for them. This is central to the idea that in many ways Wales is best encountered from the bottom-up as a ‘community of communities’, rather than from the top down through the state. In this context it is no surprise that the co-operative economic development model, which is today a global phenomenon worth trillions of dollars (the top 300 co-operatives globally are worth more than $2.2 trillion), was developed by a Welshman, Robert Owen, and that we ourselves should have developed a strong co-operative tradition. Sadly, however, Labour lost its fervour for the localism that underpinned this model of economic development long ago, putting its faith instead in state centralisation. While there were those within the Labour Party, like the leading co-operator William Hazell, who bravely spoke out against this, their warnings were largely ignored and, under Labour, Wales has not given appropriate priority to one of our key politico-economic traditions. Rather than leading the way in the UK, the co-operative economy in Wales is smaller per head of population, than that of Scotland and Northern Ireland.

The current challenge is not helped by Labour’s failure to embrace the opportunity of injecting a greater measure of mutuality into the organisation of our public services through the development of public service mutuals. Most people readily appreciate the quality of goods and services from John Lewis, whose operations rest on the mutual principle of employee ownership, of everyone having a stake. Who then would seriously want to pass on the opportunity of exploring the development of public services resting on the same tried and tested foundation and the possibility of ‘John Lewis quality public services for Wales?’ While England has enjoyed the development of 106 public service mutuals in the last five years (providing over £1 billion of public services), however, the same period has not witnessed the creation of any public service mutuals in Wales. Labour’s reluctance to engage with this agenda is not only a missed opportunity to enhance some aspects of service provision. It is also a missed opportunity to embrace policies which, because of our cultural-historical commitment to mutualism, would be particularly Wales-affirming. In both respects there is no doubt that Labour in Wales has missed a trick.

None of this is to suggest that Labour has not previously made some very relevant rhetorical commitments with respect to alternative delivery models in public service reform. Their 2009 Social Enterprise Action Plan specifically said that public bodies should consider whether any aspects of their roles could be better carried out by social enterprises. Moreover, in 2012 the Welsh Government created a Co-operative and Mutuals Commission to make proposals about how to grow the mutual economy in Wales. The Commission reported in February 2014 and supported the extension of mutuals, including in relation to public services. Indeed, the Commission actually went as far as acknowledging that mutuals were superior to state provision when it comes to housing and highlighted opportunities in a number of areas including social care and health, citing examples of public sector mutuals the other side of Offa’s Dyke working in these fields.

Any hope, however, that this would inaugurate a new, forward looking approach to public service provision, were brought down to earth with a bump in March with the publication of the Welsh Government Action Plan on Alternative Delivery Models for Public Service Delivery. It states plainly: ‘We advocate cooperative and mutual models of delivery and other alternative delivery models only as an alternative to ceasing or privatising services, as a ‘least worst’ option.’

This vote of support for mutuals has to be the most underwhelming and overqualified ever. Lest anyone should suggest that it is not really that important, this seems most unlikely given that the sentence is printed not just once in the document but twice, clearly underlining its strategic significance for Labour.

What is most striking about the ‘least worst’ comment is that rather than constituting a step forward, this Action Plan, which Labour saw fit to publish on the eve of the Assembly election, actually presents us with a step back. Unlike the latest Action Plan, the 2009 Social Enterprise Action Plan talked freely about considering whether public functions could be better provided by social enterprises without saying this was only acceptable if the other alternatives were terminating service provision or outsourcing to a private company. Rather than seizing the opportunity of creating a more hospitable environment for the mutual ethic in public service provision, Labour has instead signalled very clearly that, at the end of the day, its sympathies remain squarely with state centralisation.

Given the importance of mutualism to Wales’ identity and heritage, it seems utterly extraordinary that Labour in Wales should have made such a blatant error of judgement. It is shocking to know that in Labour we have a party that sees a mechanism that constitutes an important part of our identity (having been pioneered by a Welshman), as a worse option for public service provision than state centralisation, whose only redeeming feature is that it is not quite as bad as the service ceasing or continuing through a private company. Such a statement profoundly misjudges not only our political economy but also our history and identity as a nation.

The Welsh Conservatives passionately believe that one of the keys to success is securing policies that resonate with and understand the culture. The localism that is so central to the radical tradition of Welsh politics is also central to Welsh Conservative policy and finds expression in our commitments both to promote the mutual and co-operative economy generally and to facilitate the development of public service mutuals where a compelling case can be made for their creation. We will continue to energetically promote our mutuals policy where appropriate not because mutuals are the least worst option but because they are the best option, both for the specific services in question and also because of the way they resonate with and uphold our culture and national identity.

In this article the author sets out key findings from his pamphlet ‘Mutuality: Towards a Renewed Welsh Economy & The Renaissance of a Radical Welsh Politics,’ which has just been published and can be accessed at www.bowgroup.org/policy/welsh-labour-losing-plot-mutuals-says-new-bow-group-report


3 comments on “Mutuals and Co-ops Can Be The Very Best Option!”

  1. Jon Lilley says:

    But what you fail to mention is that you’re not talking about “mutuals” as they’re commonly conceived… Wholly owned by the participants.

    This is simply privatisation by stealth.

  2. alun burge says:

    I can’t help but smile at the Conservative Party referencing William Hazell to justify an argument on mutuals. In reading ‘William Hazell’s Gleaming Vision’ you will have seen the disdain in which Hazell held the Tories. While he was much too proper to have used Bevan’s term ‘lower than vermin’ he would agree that he held them in extremely low regard. Hazell was a socialist. While he disagreed with the form of collective organisation of the coal and other industries used by the 1945 Labour Government, he infinitely preferred that to the free market capitalism which prevailed before and afterwards. As presumably you know from having read the book – but just chose not to say… I wonder why?

  3. Henry Lee Miller says:

    The interest in mutualist economic alternatives to the current dispensation seems to be receiving a steady trickle of attention from ResPublica: as this article indicates, that trickle deserves to become a flood. Co-operatives are the obvious basis for generating movement beyond the entrenched Market/State dichotomy that poisons contemporary political debate. I’d love to see more vocal commitment to this tradition from one of the UK’s major thinktanks.

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