John Harris

Journalist & Author

From John Lewis to workers’ co-ops: these Tories love wrongfooting the left | John Harris

The vision Maude and co have for the public sector challenges Labour: what’s your alternative – the 1945 way, now and for ever?

So, we now have the measure of the government. They’ve come to lay waste to the welfare state and trample the lower orders – and they’re incompetent to boot, lurching from crisis to crisis with only a busted Thatcherite compass to help. All this is settling into comfy groupthink, and feeding into the complacency that grips most of the Labour party: faced with a mixture of mishap and evil, the opposition need only keep its ship steady, it seems, and all will eventually be well.

But enough already. Give or take those rather stagey Tory/Lib Dem fall-outs enlivening the buildup to the May elections and AV referendum, this is indeed a turbulent phase of the government’s progress. Yes, its policies are driven by an all too familiar quest to push back the state’s frontiers, for which supposedly urgent deficit reduction creates the perfect opening. A lot of the energy behind its project comes from people who do not much care what replaces public provision, given that the market supposedly always provides.

But another strand runs through government thinking – the more enlightened, almost exotic school of Toryism that defined Cameron’s pitch to the public when he first became leader, and which endures. This tendency may mistrust the state, but it wants to replace it, at least partly, with something altogether more creative than the brute market. And it delights in wrongfooting the left, something worked up to an Olympic standard.

Its representatives include Cameron’s barefoot consigliere, Steve Hilton, and Rohan Silva, a senior Downing Street policy adviser recently heard paying tribute to that not exactly Tory thinker EF Schumacher. That accredited moderniser Francis Maude is keeping the flame burning, as is his Cabinet Office colleague Oliver Letwin, still one of Cameron’s most important allies. Their outriders include the brilliant Tory MP Jesse Norman, who anyone interested in the more imaginative aspects of modern Conservatism should follow closely.

Out in the shires, you see something of their spirit in a low-level conversation – taking place well beyond the Conservative party – about the implications of the localism bill and the prospect of an anarchic revival of grassroots government, all town hall meetings and serial referendums. But a more breathtaking embodiment of their ideas lies in proposals that will be decisively laid out in the public service reform white paper due next month. We’ve heard about an imagined “John Lewis model” of public services for years: now the plan is to break up sizable chunks of the public sector and turn them into employee-owned mutuals – or, to put it another way, workers’ co-ops.

Some of this has its origins in limited moves made by the last government in the NHS. Labour claims that its own vision of where mutualisation might have gone next was hugely superior to what’s now planned, emphasising the involvement of service users rather than producers – but it was voiced as part of a deathbed conversion in early 2010, with no realistic chance of anything happening. By contrast, with Cameron having banged on about mutuals since 2007, this government wants us to believe that its plans are of a different order altogether. Maude, long the policy’s evangelist-in-chief, claims that if you go mutual, you “reduce absenteeism, improve performance management, encourage innovation, and increase productivity” – and he wants such miracles to affect up to a million state employees by 2015. According to one insider: “He thinks it’ll be transformative. That’s a word he uses a lot.”

There are, however, a lot of negatives. All this arrives not just in the midst of cuts, but an explosive drive to open up the public sector to an unprecedented level of marketisation and private outsourcing, whose gravity seems to explain why the aforementioned white paper, originally scheduled for February, has been delayed until after the forthcoming elections. As far as the accelerated mutualisation of parts of the NHS is concerned, it’s impossible to separate questions about how this will work from the miserable chaos currently surrounding Andrew Lansley’s plans. Not surprisingly, among the non-Westminster people overseeing the great mutuals drive, some sound very cautious indeed; one insider told me that ministers are doing what ministers tend to, and willing the ends but not the means, too often unsure about what exactly they are trying to do.

How wages and conditions – and, crucially, pensions — will compare to those in the public sector remains unclear. What happens if staff want to stay in the public sector is already a red-hot question, with some accusing the government of the quasi-Stalinist ploy of “empowering” people against their will – witness the fate of scores of civil servants at the Department for Work and Pensions who see to 1.5 million public sector pensions, and are set to be transferred to an “employee-owned mutual” locked into a joint venture with an unspecified private firm.

Organisations cracked up to be mutuals, then, might actually turn out to be sinister Trojan horses, and there are serious concerns that even examples of the real thing could quickly be bought out by private-sector sharks, demutualised and rendered indistinguishable from the likes of Serco, Capita et al. Other fears extend into the distance. When I spoke to the LSE academic Julian Le Grand, the Blair-era reform guru who now heads the government’s mutuals taskforce, one of his most telling verbal tics consisted of repeated acknowledgment of “dangers” and “worries”.

But in the midst of plenty of unease, the idea’s advocates point to success stories. In children’s social services, they claim, a handful of new co-ops have restored morale and confidence to a blighted profession. “Pathfinder” projects also include social care, FE colleges, help for the homeless, and more.

All this, they say, will be extended to every corner of the public sector. And implicitly the Tories’ more unreconstructed opponents are presented with some pointed questions: by way of an alternative vision, what have they got? The 1945 way, now and for ever?

Last week, I spoke to Katie Collins, a podiatrist and rep for the trade union Unison. She works at a hospital in Colchester, now part of a freshly created community-interest company called Anglia Community Enterprise, another “pathfinder” whose embrace of mutual-esque practices has been encouraged by the Cabinet Office. I had expected her to sound very sceptical about the government’s plans, if not actively hostile – but although everything she said came with caveats, there was still a cautious fascination about what might be on its way.

She and her colleagues, she explained, would soon be given the status of shareholders, and a new staff council guaranteed a say in major decisions. “If they involve us like they’re say they’re going to, it’ll be very interesting,” she said. “They say there’s going to be more consulting, and much more innovation. I suppose the fear is that further down the line, we start losing contracts. If that happens, will they change their mind and start becoming more business-minded? But potentially, this could be quite exciting.”

Yeah, reply the tired ranks of the left. Whatever. Same old Tories, masking old tricks with new sophistry. They can’t possibly mean a word of it.

But what if they do?

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