Labour’s alternative to the ‘Big Society’ should be a ‘Big Economy’

By Ben Fox

Well, you can’t knock a man for trying. In the inquest into how they won just 36% (only 4% more than in 2005), numerous Tories blamed the insistence of their party hierarchy that they try to sell the ‘Big Society’ on the doorstep. It was vague and vacuous, they said, few understood it and those that did thought it sounded like an excuse to get volunteers to replace public servants. They were right then, and they are right now. Cameron hasn’t really articulated any substantial vision of what the ‘Big Society’ means any further than a few second-rate slogans. But it hasn’t stopped him trying to re-launch it this week.

However, its apparent failings don’t mean we shouldn’t take it seriously and respond. Labour is doing pretty well at opposing the Coalition, but less well in proposing alternatives. I would like to see Labour countering Cameron’s ‘Big Society’ with an alternative political and economic vision for Britain. Cameron has, like it or not, identified a major problem in British society that we did not solve in government. Away from the Westminster bubble, there is a strong sense of a lack of community cohesion, a distance between the State and citizens.

Successive governments since the 1970s have steadily weakened the role of local authorities and organisations and decision making, while weak competition policies and a political economy that has left us grossly over-reliant on the City have meant that political and economic power has become increasingly centralised. So David Cameron does have a point if his logic of his ‘Big Society’ is that we need to de-centralise power from Westminster to town-halls and communities themselves.

One of Labour’s core visions as a party is of the ‘enabling state’ empowering communities and citizens to improve their lives both politically and economically. Our party is, after all, built out of trades unions, co-operatives and self-help – the Workers’ Educational Associations being a case in point.

So, if Cameron has tapped into a concept that could resonate, we in the Labour Party should put the meat on the bones of an area that was once considered our own. For example, there is great potential to invest in commercially viable co-operatives on a mass scale. The Swedish Social Democrats introduced such a model in the 1980s, which saw workers have a portion of their income allocated to regional investment funds, on the board of which workers’ representatives were guaranteed a majority. These boards gave workers the power to ensure that company profits were actually used to benefit them, either through re-investment or improved working conditions.

To those who think this is fanciful, especially at a time when those who question the wisdom of austerity budgets are immediately accused of being in denial about the need to reduce the deficit and when we need to generate economic growth, there’s plenty of evidence that co-operatives – assisted by local authorities or development agencies – create jobs far cheaper than private sector firms and lead to higher productivity.

Meanwhile, the billions of pounds of taxpayers’ money currently in bailed-out banks offers the perfect opportunity to create a financing vehicle – namely, by converting one of them into an Industrial Investment Bank (IIB). Since the crisis, banks have had access to unlimited cheap money but have not passed it on, causing many businesses to stagnate or go bust. The IIB would exist to ensure investment in British industry and small businesses that, despite being commercially viable, are denied the capital they need to get started and then to grow. Unlike the commercial banks, it would have a medium term strategy, and so would have ensured that, for example, the commercially viable Sheffield Forgemasters would have received the £80m they were denied by the short-sightedness of the LibCon’s.

So we should let Cameron have his ‘Big Society’ slogan and criticise his shallowness when it turns into a damp squib. But, we should be grateful to him, too, because he has tapped into an idea that only the Labour party can harness. By re-focusing the ‘enabling state’ on de-centralising and widening economic power to local people, we could both stimulate growth and harness the entrepreneurship of small businesses.