SocialismToday           Socialist Party magazine

Socialism Today 137 - April 2010

The Tories’ cut-it-yourself co-op plan

SINCE HE became leader of the Conservative Party, David Cameron has attempted to portray himself as a ‘caring Conservative’, trying to shake off the Tories’ image as the ‘nasty party’. This opinion is still held by many workers, particular an older layer who remember first-hand the Thatcher government. The Tories’ recent policy paper, Power to Public Sector Workers, which puts the case for ‘Conservative co-ops’, is the latest move of this nature. While reading it, the phrase ‘beware of wolves in sheep’s clothing’ comes to mind.

All of the establishment political parties are unified on the idea that there must be swingeing public-sector cuts to address the budget deficit. And they all have conducted an ideological campaign to attempt to blame public-sector workers for the current recession, which is a systemic crisis of the order they represent. The scale of these cuts was outlined in The Guardian, which argued that "up to 10% of the wage bill must be cut, amounting to up to 170,000 of the 1.7 million public-sector workers employed by councils. They include cleaners, administrators, refuse collectors and care workers". (1 March)

In this context, the idea of reorganising public services so that they are run as "employee owned co-operatives" may seem appealing on the surface. Some workers may see a co-operative as a way to avoid the huge job cuts that are being threatened, reasoning that ‘if we run the service ourselves, we won’t have to cut those jobs’.

This is not the case with the Tory proposals. The policy paper outlines how co-operatives would be funded through a "tariff system which gives fixed levels of payment in return for the achievement of national standards". From this, it is clear that the cuts which are being threatened nationally would continue under the Tory co-op system but the axe would be passed down the line. The supposedly directly accountable co-op management would be the ones forced to swing it. The freedom to manage a local budget without "targets, meddling and managerial oversight" is no freedom when those funds are being centrally controlled and cut.

The policy paper points to the example of Your Healthcare, Kingston (a primary care trust), as an existing ‘social enterprise’, which the Tories’ co-operative proposals would seek to emulate. This is little more than privatisation through the back door, and this PCT has already lined up spending cuts of around 5.2% a year, with this expected to rise to almost 30% by 2013!

When Your Healthcare, Kingston was established in 2009, it was strongly opposed by trade unions in the health sector. A spokesperson from the Unite union commented: "A not-for-profit organisation is set up now but in five years there’s nothing to stop an American multinational coming in and putting in a cheaper bid and you have got privatisation through the back door".

This is also the case with the Tories’ current proposals. As their policy paper explains: "We will give co-ops freedom to go into joint-ventures with outside experts, buying in managerial and operational experts where necessary… joint venture is the best way to grow co-ops without pumping in more state money, which in the present economic crisis we cannot afford to do". So their proposals will create a situation where local services are forced to be cut to the bone or co-ops are forced to go to the private sector to be bailed out – or a combination of the two.

For socialists, it is not simply the form of management or ownership that has to be looked at, but also the direction it is moving in. In the bailout of the banking system, for instance, billions of pounds of our money was used to prop up these rotten institutions. RBS and others are now majority public owned. But we have no control over them and the establishment parties have made it clear that the banking system will be handed back to fully-private ownership as soon as is possible. What we have now is a transitional form of ownership moving back towards privatisation, not towards democratic control.

The same is the case with this policy paper. For all the spin, these co-op proposals would be a step away from accountability and democratic control and a step towards privatisation of whole new swathes of our public services. We support genuine democratic control of resources and public ownership where trade unionists, community groups and service users have a direct say in the running of services. This is not what the Tories are proposing.

The ideological underpinning of their proposals are exposed clearly in the document: "This is the most significant shift in power from the state to working people since the sale of council houses in the 1980s, which gave millions of people across Britain greater freedom, security and control over their daily lives". In reality, the gutting of council house stock has pushed a whole generation into the hands of private landlords and removed "security and control" from millions. In the same way, these proposals swing the balance of power towards private companies whose primary interest is not that of the public but of their shareholders and executives.

The policy paper attempts to present evidence that there is public support for their proposals by citing a survey which claims "The social enterprise model [is] an overwhelming winner. They got 64% of votes, compared to 11% for government, 9% for business and just 5% preferring a non-profit charity". But this poll does not go into detail about how a social enterprise would be run or what the implications of services being transferred to this system would be. What the poll really reveals is an overwhelming opposition to wholesale privatisation, along with a distrust of direct government control because of the poor service and cutbacks that many people have experienced. It is clear from a closer reading of the Tories’ proposals that cuts would continue and private companies’ involvement in service provision would increase, both of which the overwhelming majority are opposed to.

By using the language of co-operatives, there is also an element of daring New Labour to oppose them – the co-operative movement of the 19th and early 20th century came from the working class and was an attempt to provide a rudimentary system of welfare, healthcare and education. Many involved in the co-operative movement were also pioneers of the early Labour Party. What the Tories are proposing is a million miles from what these pioneers stood for. They were organising co-ops before the welfare state had been won. In today’s context, the move is designed to weaken the welfare state.

But the Tories have recognised that New Labour is an out-and-out party of big business. They are goading them to oppose these proposals, but this cannot be done effectively without explaining what the activists of the early Labour Party stood for. Once again, the political debate on a national level is neutered by the fact that the establishment politicians are unified on all key political issues. A working-class political voice is desperately needed to cut through this spin.

Over the next period, the fight to defend jobs and services will have to be stepped up. Part of being able to do this will be the battle to cut through deceptive policies like those outlined in this policy paper and explain the substantive issues. In this instance, if the proposals were to be carried out, it would lead to further cuts and privatisation taking place at local levels. This must be opposed and we need to fight for fully publicly owned and democratically accountable services with the funding necessary to improve and expand, not cut back.

Greg Maughan


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