Labour co-opts some mutual friends

The idea of mutualism could yet unite Labour's left and right.

The Labour manifesto has been the subject of two and a half years' work. In the summer of 2007, soon after Gordon Brown became Prime Minister, Ed Miliband began the planning. Last spring the Energy and Climate Change Secretary was joined by Patrick Diamond, poached by No 10 from the Equalities Commission.

At 35, Diamond is a former chair of Labour Students and from the party's "soft left"; he co-edited Beyond New Labour, a blueprint for the future of British social democracy, with Tony Blair's former Europe adviser Roger Liddle. Significantly, Miliband and Diamond are not tribalists. "The manifesto is in safe hands," says one Blairite veteran.

So how far has the document progressed? "The core of the manifesto is well advanced, and pluralism is at its heart," says a source with access to its early drafts. But with just months to go before the election, there remain at least three fundamental challenges. On the economy, "our forward offer must demonstrate we have learned the lesson of the financial crisis, and how to use government intervention to encourage growth in a way the Tories never would". On the role of the state, "we must recognise that citizens - and the Google generation [in particular] - are ever more demanding". And on civil society, "more must be done to encourage local community and tackle the Tory myth of 'broken Britain'".

The John Lewis effect

Now, however, strategists have settled on a big idea that might just help answer all three of those challenges - the idea of mutualism. Labour is focusing on the best-known modern example: the John Lewis model, in which every employee is a "partner" with a stake in the company. Applying this, Labour now believes public bodies can be part-owned by their staff and, where appropriate, their users.

On 8 February, some 30 people gathered around a table at 11 Downing Street. The group was dominated by entrepreneurs with experience of building social enterprises along co-operative lines. There was also a sprinkling of corporate figures, think-tankers and members of the Co-operative Party.

Advocates of mutualism say it encourages enlightened self-interest. As one businesswoman told the Downing Street seminar, the value for mutual bodies is "low [staff] turnover, low sickness and increased commitment".

Listening in and studiously taking notes were Miliband and his cabinet colleague Tessa Jowell. Jowell has been making the case for mutualism since before she became minister for the Cabinet Office last June. Now, it seems, she is getting her way. Seen as a Blairite, Jowell nonetheless uses the language of the left on mutualism. "Most of us believe that we exist as something more than atomised beings . . . Some people are quite embarrassed about talking like this," Jowell tells me.

“The mistake in government is to believe that you make the speech and the change has happened. That [collectivist] rhetoric is what we've all used in our speeches, but this is the means by which it takes root."

To some, this might still sound like New Labour jargon. But mutualism draws on 200 years of history, stretching back to the Co-operative movement and the labour exchanges founded by the 18th-century social reformer Robert Owen. These paved the way for credit unions and savings banks. Indeed, today, mutual public services are used by more than two million people in Britain. Parents and teachers working together at co-op trust schools, the 1.3 million members of the 122 NHS foundation trusts across England, and those in housing co-ops are all part of a mutual.

Tactically, Labour hopes this collectivist idea will help counter Conservative attempts to paint Britain as broken. And after the Tories dabbled with mutualism themselves, it is also a chance for Labour to reclaim it.

Speak by Jowell

Two years ago, as a forerunner to his present assault on "big society", Cameron launched the "Conservative Co-operative Movement". The Tory leader described it at the time as a "resource for Conservative activists and local community groups of all kinds wanting to set up their own co-ops to take over the management of local public services". Yet the movement fizzled out, has no active members and has not held an annual general meeting.

By contrast, there are employee-owned companies already delivering services, such as Greenwich Leisure, London's biggest leisure operator, with 70 public leisure facilities and a £72m turnover; and Sunderland Homecare Associates, a social care provider in the north of England with a £2m turnover and 220 staff.

Jowell's own role in the plan, which she describes as "very big", is intriguing. Just over a month ago there were rumours that she was preparing to resign. These rumours came on the eve of "the coup that never was", led by her former cabinet colleagues Geoff Hoon and Patricia Hewitt. For her part, Jowell insists that she had no intention of stepping down. "Anyone who knows me knows I am not a resigner," she says. Now - perhaps thanks to her renewed loyalty - she is back in the game.

Labour may yet unite around mutualism. It has the attraction of being an idea difficult to label as either from the left or right of the party; nor is it "Blairite" or "Brownite". And it should help define Labour's approach to those three interconnecting election issues: the economy, public services and civil society.

But whether mutualism will capture the public's imagination during the forthcoming campaign is another question altogether.

James Macintyre is political correspondent for the New Statesman.

This article first appeared in the 15 February 2010 issue of the New Statesman, Everything you know about Islam is wrong