Rebecca Long-Bailey’s speech at Ways Forward 6

Rebecca Long-Bailey MP, Member of Parliament for Salford and Eccles and shadow Secretary of State for Business, Energy and Industrial Strategy, speaks at the ‘Ways Forward 6 Conference: Co-operative Solidarity’ event in Manchester, United Kingdom on February 16, 2018.

“Labour has put co-ops right at the heart of our manifesto”

Thanks everybody, and thanks so much for inviting me here again this year. I was at last years’ conference and we had a fantastic discussion then and I’m really pleased to see so many people at today’s conference. It’s quite clear to me that there’s widespread support and excitement for the co-operative sector, and I know many of the faces that are here today and I’ve spoken to you about some of the great work that you’re doing, and hopefully if you get the chance today please don’t hesitate to grab me on the way out or if you can’t grab me make an appointment and grab me in my office maybe one Thursday or Friday, because it would be great to sit down and just really get a feel for every single thing that is happening in my region in terms of co-operatives.

Now, I’m sure I don’t need to tell anybody in this room that the seeds of the co-operative movement began just down the road from here, when the Rochdale pioneers opened their shop at 31 Toad Lane in 1844. Now those 28 pioneers set out the principles which would determine the operation of co-operatives and the ideals of the co-operative movement for centuries to come, and since then our movement has grown and grown. According to Co-ops UK 2017 report there are now almost 7,000 independent co-ops across the UK with over thirteen million members and 226,000 employees. Now this is an immense achievement and I don’t want to depress anybody but I think we need to go a lot further than this, and that’s why Labour has put co-operatives right at the heart of our manifesto.

Now, why have we done this? Well, Britain’s GDP productivity rates is 18% lower than the G7 average, and productivity growth has not been this bad since just after the Napoleonic Wars. Real wages haven’t grown this slowly since the Second World War. Now this isn’t bad, this is unprecedented, and it shows us that there are deep, structural problems with our economy and the way it’s been run. And I won’t go off on my crisis-of-capitalism speech that I sometimes do but we know the story: we know there was a change in economic thought in the early 1980s that saw a shift away from common ownership and the promotion of the co-operative movement towards a small sector in the South East where a lot of emphasis was put on financial services and there wasn’t any diversity encouraged within business at all, and no mention at all of the co-op sector.

Now alongside this we also saw a culture of short-termism develop in corporate governance, making a quick buck emerging rather than investing for the long-term. Now if you look back in 1950 the average period of share ownership in the UK and the US was six years. Today it’s six months, and that doesn’t even take into account what we see when, you know, we look at the Wolf of Wall Street and programmes like that where we have high frequency trading where it doesn’t even happen on the floor of Wall Street or in the stock exchange, it happens on a computer in a matter of seconds. Some organisations hold shares for a matter of seconds. Now how can they productively be making decisions about the long-term interests of the company and its employees if they themselves have no real, long-term interest in that company.

Now we know that this dramatic turn of events means that shareholders are less likely to make those long-term investments that will lead to longer growth, not just for that particular company but for our overall productivity as a nation. But alongside this corporate culture we’ve also seen inequality booming at a rate that we’ve not really seen since the Victorian era. And I know that many of you feel that in your communities you’ll have seen how bad it’s getting for people out there. Now Friday’s my day that I visit my constituents and have meetings and surgeries and I’ve got a member of my staff in the audience today. I’ve been an MP now for three years and in that three years we’ve seen a dramatic increase in the number of people coming to visit me who were on the edge, who were desperate, and many of these people are in work. They’re in work that pays so little they can’t afford to pay rent, they can’t afford to pay their bills, and they’re being forces to rely on foodbanks. And in one of the richest nations in the world, this is a national scandal.

Now it’s not only income wealth and inequality that are booming, but it’s also the growth in insecure work and the perils of the gig economy. You’ll have heard of the horrific story of a guy called Don Lane who recently died. He was a DPD gig worker theoretically he was self-employed but I think you legally look at this case and he had all the hallmarks of what should have been an employee. Now he was fined by his employer for going to an urgent doctor’s appointment. And he became so frightened after that about taking further time off to go to medical appointments that he didn’t and sadly passed away and his family have suggested that the stress that was imposed on him by that period of employment would have contributed to his untimely passing, and that was absolutely horrific. Now the government had the opportunity to address this, they re-published their response to the Taylor review, I don’t know if many of you heard, a gentleman called Matthew Taylor did a review into modern working practices across the UK not so long ago. Now we as the Labour Party we’ve said that it might have had some of the right rhetoric in there but it didn’t go far enough to tackle the problems in the gig economy and it certainly didn’t tackle one of the root causes which is ownership within companies and an employee-stake within their company to ensure that they have adequate protections and a right to a quality working life.

Now according to the TUC, there are 3.2 billion people in insecure work, that’s 1/10 of the entire UK workforce. And what many people don’t see and don’t understand is that these issues have their roots in the current system, structures of ownership, failing corporate governance and inadequate employment protections. But if we just stop for a minute and imagine what the world could be like. Imagine if the technology that allows us to hail a taxi or order a takeaway via an app was actually shared on those who rely on it for work rather than controlling them. They’d have the power to agree their own terms and conditions, rates of pay, with the profits being shared among them or re-invested in that business for the future. Now imagine if workers could determine the pay of their own executives, their chief executives, then we wouldn’t have incidents like the four of January this year where it was ‘fat cat Thursday’ where FTSE 100 bosses in the first four days of January had earned more than the average UK salary.

Now imagine if the direction of a company was decided by the workers who a long-term interest in that companies’ success, they weren’t just speculators trying to make a quick buck. There’d be no more Philip Greens sailing off into the sunset on their super yachts while people’s pension funds are decimated, that’s for sure. And what I’m trying to say and I know that I’d be surprised if there was anybody who put up a red card in this point, putting power in the hands of the people is a fundamental tool in creating an economy that works for the many, not for the few. It’s not just about distributing wealth, it is about making sure that the control of that wealth is addressed as well.

Now one way of doing that is through supporting the co-operative sector, and John McDonell, the Shadow Chancellor, has already pledged that the next Labour government would introduce a right to own, offering employees first refusal on firms which are changing hands. And we also said in our manifesto last year that we’d aim to double the size of the co-operative sector, which would be supported by our National Investment Plan and regional development banks. We also advocated community wealth building programs to promote local co-operatives and businesses. We also looked at the Preston model, a way of harnessing our local wealth and making sure that that local wealth, through anchor institutions is used to procure services for local co-operatives and those organisations that deliver a real economic and social benefit to our communities.

However, we also recognise that the next Labour government needs not to just encourage new co-operatives but we’ve got to make it easier for co-operatives to grow. Now the Alternative Models of Ownership report published last year highlighted some of the hurdles co-operatives faces and if you haven’t had a change to read it yet do go on the Labour party website and have a read of it, it’s about 50 pages long and it’s a good night time read before going to bed. It gives you loads of examples about co-operatives but also looks into the Preston model and municipal ownership, and all the different possible permutations that you can think about. And when I talk to people because we go to speak to business events as well and there is a real need to diversify business ownership, it’s promoting the co-operative sector but it’s also looking at things that we may not have thought about before, that empower workers and empower local communities to deliver their own services and have a real stake in their economic future.

Now some of the hurdles that we identified were access to finance through conventional institutions, the ability of workers to buy out their company, a lack of protection from potential buyouts by private companies. And last weekend we had a great conference in London, we had an alternative models of ownership conference to explore how we can explore the ideas contained within that report and when the next general election is called, set out a clear roadmap to the booming creation of more co-operatives to a level that many of us will have never seen in our lifetimes.

Now John announced there, the commissioning of a new report to investigate the legislative changes needed to clear away these hurdles and to allow the co-operative sector to flourish. This report was commissions by the New Economics Foundation, working with the Co-operative Party, and it’s aimed to give a detailed analysis of the current co-operative sector, a vision for substantial growth and actions that policy-makers would need to take to realise this vision. And we expect that to be a real consultation with yourselves so that you can have an input into that report, you can tell us what your real-life examples have been, what your hurdles have been, and what you would like to see in terms of support for the co-op sector in the future.

Now we also announced that working with the Co-op Party, an expert of group of activists and co-operators would be brought together to form an implementation group which would engage with the co-operative movement, road test ideas, and provide feedback.

Now, I know that there are probably a number of questions that you want to ask or you might want to let me know what your potential policy ideas are so I won’t talk too much longer other than to say that our co-operatives embody a forgotten truth about the world: wealth is created collectively, not by some small minority group but by workers, the community. When we talk sadly about wealth creators however we don’t mean those people who created the wealth in the first instance, it usually means the wealth controllers and the wealth owners. But we know the reality is that the resources of our world are created collectively and we want that to be reflected in the way our wealth is owned and managed, and that is why we are dedicated to expanding the co-op sector and making sure that in the future we all feel that we have a real stake in our economic future.

And then I’ll just end on this point: there’s a lot of talk about the fourth industrial revolution, one of my other hats is industrial strategy. Now this is a pace of technological change that we haven’t experienced in our lifetimes. Even the lowest skilled jobs, over the next 10 years, will require an immense level of expertise. And yes, we will see certain jobs in some sectors eradicated. Now as the Labour Party we recognise that our economy isn’t there for us to be servants to the economy, the economy is there to provide us with quality of life. So if we want to benefit from the qualities of life that further atomisation, and digitisation can bring into increasing productivity in businesses and co-operatives, that’s fantastic. But we also want to increase quality of life. And to do that, we need to make sure that workers have more of a stake in how their companies are run.

Now we talk about the dream, Harold Wilson did the white heat of technology speech many, many decades ago and he talked about this quality of life principle, and he talked about the then industrial revolution which was a complete revolution in manufacturing where people were worries that the machines were coming to take their jobs. And he said then, this is an opportunity that we need to embrace. Why can’t we use this as an opportunity to mean that people have less working hours, they have more leisure time, they spend more time on the quality pursuits such as art and drama and reading and music and the things that make us whole as a person. Because we don’t just live to work, we work to live and we need to recognise that. So thank you very much again for having me today, it’s been a real pleasure, and if anybody’s got any questions or any suggestions then please don’t hesitate to let me know. Thank you.

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