A Precious Inheritance

Jon Cruddas writes:

If you hold a Co-op bank account because you wanted an alternative model of banking you might be wondering where to turn next. The bank is subject to five reviews.

Many fear they will reveal that it strayed so far from the tradition of co-operative banking that it shared all the vices of the normal banking sector and none of its virtues.

And now the latest problems at the Co-operative Group risk squandering a precious inheritance.

At stake is the Co-operative party, which has a historical link with the Labour party.

The Co-operative Group is running a Have Your Say campaign as part of the discussion about the future strategy of the business.

It is a matter for the Co-operative Group and its members to decide if they want to support the Co-operative party.

It's an important debate in a democratic organisation about the relationship of politics to society.

The Co-operative movement grew when millions of working people were involved in mass self-help movements.

The learning societies, libraries, shops, the funeral parlours, the friendly societies were an economy made by and for working people.

This movement was a profoundly civilising influence because it fought for the political representation of working people in the government of the country.

But today many people have lost trust in our political institutions and political parties.

They don't think politicians can sort out the problems of the country. They feel powerless to make their voices heard.

We have to rise to the challenge and make the case for why democratic politics matters for the good of people.

The greatness of the Co-op Bank was the trust of its members and, through the Co-operative Group, their shared governance of their own money.

That is what needs to be rebuilt in the economy and in politics; devolving power so that it lies with people who belong to associations for their mutual benefit.

We need more power to people in our politics and in society and we need the Co-operative Group and Co-operative party to lead the way.

More than ever, we need a robust mutual sector, and a co-operative movement to assert, in practice, that it is good to associate, pool resources and have a stake, so that businesses and other institutions serve your interests and those of others.

The beneficial constraint of mutual responsibility served our financial sector very well for two centuries, giving incentives to virtue and prudence in the governance of banks.

It worked, in its patient and responsible way, but it could not compete with what turned out to be illusory rates of return in the City and we reaped the whirlwind with the financial crash of 2008 when we bailed out the banks.

Not a single one of the demutualised building societies is now autonomous.

Capital centralises every bit as much as the state and we should always remember that.

The problem with our economy is the concentration of ownership and a lack of a diverse ecology of institutions characterised by effective accountability. 

Labour's Policy Review, which I run, is about bringing together different interests to build a coalition for national renewal from the bottom up and in the process transform how we will govern the country.

We need to create powerful cities and revive the democratic life of our country.

As Ed Balls has argued, that means devolving economic power to innovative cities and regions to spread wealth more fairly across the country.

And if we are to rebuild public trust in the democratic process we must revive strong, democratically accountable bodies at a city region level.

In our global world, it is the local that will be the agent of political change, the place of belonging, the source of identity.

One nation Labour under Ed Miliband is building a consensus around the devolution of power to people. It is about strengthening solidarity and subsidiarity.

These are values that have always been at the root of the co-operative tradition.

We need the Co-operative party driving forward this agenda.

In Karin Christiansen the Co-operative party has an imaginative and dynamic new general secretary, working with a talented group of MPs.

Many of them are actively building co-operative values into our policy-making and one nation politics.

We are exploring co-production and democratic models of commissioning in public services; ways we might give local areas more say in the running of the railways; and how we better support co-op building and community land trusts because it is cheaper to build houses together than alone.

Over the last 80 years, the partnership between the Labour party and the Co-operative party has been a source of strength to both the co-operative movement and the labour movement.

It will be in the next.

Out of crisis comes renewal.