“Mutualism is the next stage of New Labour”: The Tessa Jowell interview

Tessa Jowell is the Minister for the Cabinet Office and MP for Dulwich and West Norwood. She met Alex Smith on Wednesday 16th December.

On Tuesday you announced a new commission to look into the relationship between ownership and social fairness. Tell me more about that commission. What are its intentions and its remits?
It’s a commission that will be funded by Co-operative Financial Services and serviced by Mutuo, so it will be at arms length from government. We see the best analogy as being with the Commission for Social Justice in the 1990s, which of course came up with some of the most definitive policies for the early stages of the Labour government, particularly the minimum wage, tax credits and so forth. I think it’s important to look at how the arguments have developed over the last 13 years, that we look at the new arguments about ownership that have been thrown up by the economic downturn. That way, we can move beyond the position where we regard ownership as neutral; that the effect is what matters, not the nature of the ownership. It’s particularly important because of the evidence that different patterns and styles of ownership have an impact on the performance of organisations – and indeed have an impact on public preference and public confidence in different kinds of organisations. So a commission on ownership will seek to answer the questions: does ownership matter? If so, why? How do you maximise the beneficial effects of particular kinds of ownership? And what is the kind of ownership structure that builds confidence and trust, both amongst staff and also the people who use the services of a particular organisation.

And it’s going to be chaired by Will Hutton. Why was he chosen?
Will is one of the most prominent progressive thinkers. The great book when we came into power was his The State We’re In and he remains at the centre of the development of the argument about stakeholder capitalism. Actually, his was an idea that was probably ahead of its time, but I think that a commission on ownership – a review of stakeholder capitalism – is now very well timed. It’s relevant now because of the very clear indications from the wider public that, post-downturn, people want a different kind of society; that they’re looking for different kinds of security. I don’t think people will be nearly so tolerant of high-risk, short-term, big gain for particular individuals while the rest of society pays for a small number of individuals to get very rich. We’re not becoming ambivalent about wealth creation – absolutely not – but the argument I’ve set out and the way we want to take it forward is as reflective of the public mood now as was the case with the way Mrs Thatcher developed her appeal over three terms through the late 1970s and ’80s. This will be as iconic for New Labour in its fit with the moment as council house sales were for the Tories at the end of the ’70s.

In your speech you spoke about how this argument and these ideas will transfer to the provision of public services. What will those mutual public services look like in the way that you envision them, and how do you hope people will get involved in these new models?
The model that this argument makes possible is one where the humanity of public services becomes explicit. The ability to respond individually, and to be flexible in the light of a person’s changing needs, is something that a mutual provider organisation has the capacity to do. Take the inevitable growth of home care for elderly people: 400,000 more very vulnerable elderly people will now have a higher level of care in their own homes than has previously been the case – the PBR announced funding for that. What does this mean in practice? Successful home care, for example, will enable elderly people to realise their full physical and mental potential, through stimulation, physio, exercise, mobilisation, getting out and about – not just that they will be contained at home rather than in residential care. One of the ways in which the motivational power for that occurs is through the relationships that elderly people have with the individuals they have daily contact with. In all our story about the reform of public services, we tend to forget or take for granted the unique and profound importance of those relationships. For instance, a single mum at home with her first baby, or a very elderly person who doesn’t have very much family support, who’s at home but who waits for the knock on the door from the district nurse or the person who delivers meals on wheels. So the question has to be: what’s the kind of organisation that best supports that self-confident flexibility in the daily encounter with an elderly person or a mum with a new baby? What’s the kind of organisation that provides people will the very best support they can get so they can go on to make progress?

You’re speaking about social care, but which other services does this model extend to? What about Sure Start or setting up schools and hospitals?
It absolutely extends into Sure Start, and it also extends to people devising their own solutions to whatever problems they have. There’s a lunch mutual in which people who live within two or three streets are provided with lunch by a tiny organisation, a social enterprise. It was set up by somebody who needed lunch cooked every day for their own mother, and who thought: there are lots of people like my mother who live in the streets around here, so why don’t I do something from which everybody can benefit? I know of another woman who is ninety years old and who lives on her own – defiantly so – but who has a combination of friends and homecare and so forth. It really grieves me that the person who delivers her meals on wheels sees her role as only putting the carton on the hall table. She doesn’t ask: are you ready for lunch? Shall I lay a tray for you? Shall I put it on a plate? She has a very important responsibility to this elderly lady, which is to make sure she’s well fed, that her lunch is as appetising as it can be, that she gets it at the right time, etc. If we can build the transaction of delivering meals on wheels into that kind of more personalised service, then it would have a huge impact on the quality of the programme of care that elderly people have. It’s the same for other services. Of course, it takes imagination and a bit more time, but not a lot of extra cost.

But time is one thing that people don’t necessarily have…
Yes, many people do feel like that, so you need to offer flexibility. But, as my speech said, the number of people who get involved in public services is higher in Britain than in anywhere else in the EU. In my own constituency, there are busy parents who set up the first parent-promoted school at Elm Green – the first in the country – who gave hours and hours to the development of a project that means their kids are educated locally instead of in some cases going to schools on the other side of London. That’s hugely beneficial to them.

Does it concern you that a structural move towards this type of public service provision would most benefit those who already have the means to be able to dedicate the time to these systems, or that some of these types of reforms could occur exclusively in middle class areas?
I can very well understand the flow of the argument, but I don’t think there’s any evidence of that. If I take the example of an estate in part of my constituency – which has a history of violence, a lot of drug dealing, and it’s been very degraded – what the residents have done there is to take over the strips of land between the flats and they’re now turning them into allotments. These are hard-pressed people, who have very little money – but nobody has blown out the flame of ambition and aspiration or the sense that they can take control over where they live. I thought about this last night, actually, and I think it’s a patronising view that this will necessarily belong to the thrusting middle classes. I remember my kids’ PTA – people used to be there making cakes for cake sales, or donating clothes for jumble sales. The key thing is that people feel a personal investment in the benefit they’re going to get in return. This is rarely done out of pure selfless altruism. That’s why public services that everybody wants to use are so important: there is no greater sense of solidarity. Community doesn’t just exist as an abstract. A very natural focus for communities are the shared interests of people who live close to each other and the shared solutions they can develop for their own situation. Look at the internet sites that are now subscribed to by hundreds of thousands of people who share a common predicament or situation – MumsNet, GumTree, and so forth. Similarly, the mutual movement builds on this sense of common interest. So people bring different skills: somebody who’s not working brings time, whereas an accountant may relieve the mutual of all the onerous responsibility of keeping the books and making sure that the finances are kept in order. Some people may put less time in than the mum who’s at home, but there’s a place for everybody in making these organisations work.

It all sounds very idealistic…
You can’t be in politics and not be an idealist.

I agree.
In progressive politics in particular.

So in feeding into the narrative of where the Labour Party is going with this, do you think mutuals can be reconciled with the private finance investment of the last twelve years? Do you think the mutual ideals you’re talking about can easily sit side-by-side in a national system where one area may have PFI schemes, but two streets down the road there’s a mutual providing those exact same services?
Absolutely. I would hate to see mutualism becoming the fad of the moment. It’s been part of the Labour movement’s history for 120 years or more, and it will go on adapting and changing with different circumstances. The idea is for what you might call a mixed economy and a diversity of solutions to the modern challenges of healthcare, of getting a good quality of life for people, of creating communities for young families. If mutuals became the only solution we’d be going backwards, not forwards. What I’m working to develop is the way in which government creates the space within which mutuals can develop.

Sometimes government, and the bureaucracy that surrounds it, can be a roadblock to setting up those types of organisations. How do you empower those local people to set up mutuals? What is it that government can do to enable them?
What we’re looking at is some kind of “entitlement to a mutual” option in circumstances in which the mutual option is considered to be viable. But we’ll come at this in a whole variety of ways. Yes, of course local authorities can be a roadblock, but local authorities can also be the great enablers. Labour Lambeth was the great sponsor of the Elm Green parent-promoted school; the great sponsor of Brixton Green, and so forth. So always assuming that local authorities will operate with the most obstructive motives is the pessimist’s view. You need to provide safeguards against that, but you can begin by assuming that most progressive local authorities will see this as a creative solution to some of the challenges of serving the communities that they do.

Some of the newspapers have referred to these ideas as the inevitable next stage in the Labour narrative. Do you think these ideas will be so definitive as to constitute a new Clause IV moment? Does this mean New Labour is dead?
No, no, no. New Labour is the only show in town for the progressive left, but it will adapt and change. Because we’re doing things differently now is the result of the progress we’ve achieved over the last 13 years. We couldn’t have been having a conversation like this about mutuals had the PFI not built 187 new hospitals, had we still got primary schools, like I had in my constituency, with outside lavatories and no teaching assistants. This is the next stage, which is defined by increased public expectation of services as a result of those reforms. People are becoming much more informed and assertive about their entitlements from public services. Ten or twelve years ago, if you had a hospital appointment then you took the day off work. People don’t do that anymore. Now hospitals work much more flexibly: you have a scan and the doctor has the images on their desk in the time it’s taken you to walk back along the corridor. So it’s very important to see it in these terms: not as a reproach to the past, but as a celebration of the achievements that have been secured and the opportunity that those achievements have created to do more and go further and work in different ways.

You talk about people being more assertive with their expectations of what they get from their public services. But all these ideas will be received by some as a top-down initiative, because they come from Whitehall. You can’t impose mutuals from the top, can you?
If I were to say anything as a chorus for these ideas, it would be exactly that. Mutuals have got to grow organically, from communities upwards. You cannot prescribe mutuals. You cannot say, “there in Lambeth or there in Totnes, you will provide your homecare through mutual organisations”. But what we can do is to create the space and the opportunity and to talk about the ideas and the possibilities, to encourage the sharing of the experience and work of mutuals. What government can do – and what the audit commission can do – is to maintain a searchlight on wilful local government obstruction to the development of mutuals where local people feel they represent their preferred solution. I am absolutely categorical about that: you cannot prescribe mutuals top-down from Whitehall. But government can provide the enabling environment in which mutuals can grow.

What would the jurisdiction of the state be in regulating standards of mutuals in public services?
It depends on different circumstances, really. But where, as it already the case, a mutual holds a contract – and that contract is funded by public money – then of course there has to be an assurance by the appropriate regulator that that public money is being spent to buy services of an acceptable standard. That would be part of the negotiation in order to get the contract in the first place.

The Tories have talked quite a lot about devolving public services to communities and about localism. How are these ideas different?
They’re profoundly different. The Tories are like political magpies: they go around snatching bits of ideas. But this is the problem that the Tories have got. They haven’t changed as a party. The Tories of 2010 are essentially the same Tories that gave us the last recession of the early ’90s. They may have a different shop front, but that’s pretty much all. So because they never had their own Clause IV moment – months of internal discussion, debate and galvanising a will to change and move on – they can’t do this. They don’t really understand what we’re talking about because this is not their language. The second profound difference is that their ideal model – the budget airline model, the EasyCouncil – is one where essentially you’re provided with a baseline of service, but whatever you want beyond that, you pay for. Speedy boarding may get you on your flight to Ibiza a bit more quickly, but is speedy homecare really how you want the provision of services for the elderly, or the delivery of meals on wheels? Absolutely not! But mutualism is in our DNA; it has grown with the Labour and co-operative movement and it has adapted to change. I profoundly believe, just as I said in the speech, that the Tories’ share-owning democracy – selling council houses and privatising the utilities – caught a mood at that time. And so modern mutualism captures the public mood of now. So this will be central to the argument at the general election because it is a very good example of how the way in which you do something has a material impact on the quality of what you achieve.

In this mutual moment of financial and democratic deficit, do you think these arguments – if put properly – are powerful enough to tip the election in Labour’s favour?
Yes, absolutely. We will win on our story for the future, and mutuals are an essential part of that story which reflect people’s wish to never again be held to ransom by banks which are not disclosing the risks they’re taking and are putting people’s personal savings and their liquidity and their small businesses in jeopardy. People will never want to go back to that again. I also think progressive values are the values of now. Look at the level of engagement that people have with their children’s schools, with the life of their community, giving time to things that matter to them. People don’t necessarily describe that commitment in the grainy terms of volunteering, but people do want to feel that this sense of interdependence – of mutual aims and mutual support – equals mutual benefit. I think movements inform that sense of identity, and these ideas are a way of capturing that hunger in the way we service the needs of people’s everyday lives through public services.