Steve Richards: The politics of ownership could define the next decade

The government realises that the issue cannot be busked forever

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Tax! Spend! Tax and Spend! Don't Tax and Spend! These are the exhortations that dominate pre-election debates. They are wholly artificial and have little connection with how a newly elected government will proceed to tax and spend. Yet the theme overwhelms all others. Expect charts galore over the next few months showing a cut here, or a rise there, depending on which party is elected.

While every dot and comma is analysed in relation to "tax and spend" another more important theme is virtually ignored before elections and afterwards. Since the late 1980s policies relating to ownership have hardly featured in public debates between parties or within them.

This is odd given how much more than "tax and spend" they shape people's lives and come to define governments, albeit retrospectively. Thatcherism came to be about ownership much more than anything else, with the sale of council homes and the privatisations. The 1945 Labour government is remembered above all by its hyper activity in the opposite direction, most vividly symbolised by the creation of the NHS.

New Labour did not give much thought to ownership because it did not dare to do so, fearing internal rows in which the role of the state might be discussed. The Blair/Brown duopoly preferred silence to any discussion in which the word "state" might be uttered. Shelves creak with speeches delivered by the two of them from the mid-1990s about tax and spend, relations with the City, constitutional reform, crime and Europe. There is nothing on ownership.

As a result the Government had no compass, no sense of where it was going or where it wanted to go, when dealing with the most fundamental issue in politics. The evasion was calamitous in ways that are still greatly underestimated. Brown gave the go-ahead for the catastrophic public private partnership for the London Underground, a costly arrangement that collapsed as many warned it would.

Blair declared at his first cabinet meeting in 1997 that the Government would not change the privatised structure of the railways. A few train disasters later he was taken aback at a meeting with Railtrack when the company's executives told him they were accountable to shareholders and not the Government and would not do what he asked of them.

Confusion turned to nightmarish chaos during Labour's second term after Brown had announced tax rises to pay for the NHS. Blair made "choice" his great mantra and sought to bring in the private sector, partly as a form of competition for the NHS. Some of the subsequent deals cost the taxpayer a fortune without bringing about much improvement. Brown opposed some of them on grounds of practicality and efficiency. Blair argued a range of providers would lead to more efficiency.

They were busking it. The issue of ownership had been locked away and unexamined. The lack of clarity and resolution of awkward internal questions led to paralysis.

Belatedly the Government is beginning to stir, recognising that the politics of ownership cannot be busked forever. This week the Cabinet Office minister, Tessa Jowell, made an important speech in which she raised the possibility of co-operatives and so-called mutuals providing a model for ownership, more John Lewis and less EasyJet, more based on users and employees having a say in the running of organisations and benefiting from the rewards that arise from them.

A report from the independent Innovation Unit for the Cabinet Office points to the urgency of the situation by arguing that public services have become almost as "demutualised" as the banks that lost a fortune in the credit crisis, with both users and staff detached from decisions about how a service is delivered.

The report points out the possible benefits of a co-operative approach to ownership based on research here and in other countries. The benefits include much greater staff satisfaction and less turnover, users moving on from becoming passive "disappointed customers" to active involvement in bringing about improvements, greater innovation and higher productivity. The authors cite models from health co-operatives in Japan to social care in Sweden.

In her speech Jowell sees immediate benefits in areas such as social care, Sure Start and housing. In some of the bigger more contentious policy areas there will soon be 200 co-operative trust schools and there is some evidence of greater patient involvement already in the NHS foundation trusts.

The context of Labour's more active interest as it prepares its election manifesto is both economic and political. The credit crunch has reinforced a sense of powerlessness amongst voters and highlighted the terrible consequences of demutualising building societies in the private sector. Bleak economic prospects also mean that there will be less cash to invest in public services. New ways are needed to get the best out of them.

The politics are more interesting. David Cameron's most senior adviser, Steve Hilton, has also shown an enthusiasm for co-operatives and is known to challenge the idea that they are a left-of-centre concept. The so-called "red Tory", Philip Blond, is quoted twice in the Innovation Unit's report, in which he extols the virtues of co-operatives. Not for the first time Cameron has alerted Labour to an agenda it should have more fully occupied years ago.

The internal politics are also significant. It is difficult to overestimate the intensity of the divide in Labour over ownership as previously identified in the final Blair years. The debate was simplistic, arid and yet tore the Government apart: public versus private, markets versus state. The new focus brings together previously conflicting ideas on the rights of users to choose and the need for services to function as part of a community.

Michael Stephenson, the General Secretary of the Co-operative party is dismissive of the Conservatives' attempts at emulation, pointing out that Cameron made a speech two years ago setting up the Conservatives' co-operative movement and it still does not contain a single member. Cameron got a headline and seems to have moved on. Stephenson stresses that co-operatives are essentially collective whereas the Tories' instinct is to focus on the individual.

I asked him how Michael Gove's vision, where parents will be allowed to set up their own schools in ways that have attracted parts of the centre left, compared with the co-operative alternative. Stephenson argues that Gove's model takes a few schools out of the system entirely. The co-operative alternative means that parents, staff and the local community are directly involved. The schools will also be part of a wider co-operative organisation too and not functioning in self-interested isolation. He wants the model to go further and apply to the BBC and rail companies, where passive viewers and travellers fume impotently at the moment.

There are inevitable problems. The bigger the scale, the more complicated and multi-layered the structures become. Wider involvement is not guaranteed. In some parts of the country it is impossible to get mothers or fathers to attend a parents' evening at a school. New levels of ownership cannot be an alternative to decent levels of investment as some on the right will hope. The Government's embryonic embrace might be killed off by the scepticism of some unions that still pull too many strings in the Labour party.

But ownership, this time in the form of much wider user and employee involvement, is back as a defining theme. I predict it will play as big a part in shaping the next decade as privatisation did in the 1980s.

s.richards@independent.co.uk

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