The Right To Own

A version of this proposal was published by the LabourList website in October 2010 as part of their Ideas for Electability series. Why ownership matters for Labour The global financial crisis and consequent recession caused our party to revise its approach to regulation, industrial policy, and taxation. The action taken during the crisis stopped a recession turning into a depression, but in last year's general election we lacked a slogan that connected voters' hopes and ambitions with a vision for shared prosperity. As Michael Stephenson, the general secretary of the Co-operative Party has said: If we want to learn the lesson of the past, we have to build a new genuine stakeholder economy. A different type of private sector made up of different types of enterprises, including a substantial number of co-operative enterprises in which members of the public have a say and share in their prosperity. Labour's new generation must put forward and work to implement a policy on ownership which contrasts with the Tory/Lib-Dem coalition's Age of Austerity. The Co-operative Party has started this by raising the demand for the remutualisation of Northern Rock with the slogan The Feeling's Mutual. As a big idea, the Right to Own would not be opposed in principle by our opponents Liberal Democrats have long advocated co-ownership, and the Conservatives have advocated popular capitalism and a property-owning democracy. As opposed to the nebulous big society, the right to own benefits as a slogan from its echoing of an earlier and existing policy which speaks to the aspiration to go beyond earning and establish a greater degree of autonomy. Talking of a Right to Own would also provide a basis for re-framing the debate on regulatory reform of oligopolistic markets in financial services, utilities and transport systems getting beyond the false dichotomy of state or corporate control.

Why ownership matters for economic growth Ownership doesn't just matter for Labour, it matters for the future of private sector growth in the UK economy. There is evidence to suggest that firms are strengthened when workers are also owners. Professor Joseph Lampel & Dr Ajay Bhalla of Cass Business School, and Dr Pushkar Jha from Newcastle University Business School, compiled a report which looked at two hundred and fifty firms and found that: the employee ownership model offers particular advantages to small and medium-sized businesses and in knowledge and skill-intensive sectors, where employee-owned companies significantly outperform competitors. As Professor Lampel observes: Resilience the ability of firms to sustain employment and growth during difficult economic conditions has been neglected as a crucial aspect of company performance over the past two decades. Instead, business strategy and public policy have been dominated by an unremitting focus on maximising share value. In the current economic conditions, business leaders and policy makers should be looking again at the resilience associated with the employee ownership model and how it could benefit the economy as a whole. How the Tories used the ownership aspiration Whilst better representing the interests of big businesses, the Tories have always spoken a language which related to the concerns of small business owners, the self-employed, and more affluent wage-earners, which constitute the squeezed middle. The Tories' right to buy policy, introduced thirty years ago, allowed tenants of council houses to buy their home from the local authority at a below-market rate. It was used as a hook to catch public support for a broader agenda of economic change. To benefit from right to buy, tenants had to accept the corresponding responsibility to contribute to the scheme by paying out of existing savings or taking on a mortgage. Similarly, to be feasible, the right to own would involve a commitment from both individuals and the state.

What would the Right to Own would mean to people The policy would relate to popular aspirations for advancement through earning and owning what has been termed the British Promise of a better life for future generations. It would signal to swing voters that Labour values stable relationships based on mutual responsibility and the party in government would ensure hard work and entrepreneurship are rewarded. How the Right to Own could be realised Labours General Election Manifesto favoured a step change in the role of employee-owned companies in the economy, though how the party would actively achieve this aim was not outlined in great detail. In government, Labour had worked to establish Supporters Direct to help football fans gain a collective shareholding in their clubs. Tens of thousands of fans are now coowners in their club through supporters trusts. This could provide the model for implementing the Right to Own, but there are other ideas for boosting co-ownership circulating amongst Labour's new generation of activists: * Matt Zarb-Cousin has proposed that reform of the banking system could be used to promote new private sector co-ops. The establishment of statebacked investment bank could provide credit to co-operative and mutual forms of enterprise as a priority. * Rayhan Haque has suggested that welfare reform should be based on micro-finance principles, lending to groups of unemployed workers to set up new co-operatives. This proposal combines the objective of promoting new start-up enterprises with the concept of the Job Guarantee which the last Labour government planned to introduce. Our co-operative traditions and our status as the party of labour give us deep roots in civil society and we can make change happen even in opposition. In North America, the United Steelworkers have partnered with the world's largest worker co-operative, Mondragon to establish union co-ops in the US and Canada. This innovative form of good globalisation could be copied in the UK if Labour takes the lead in promoting the Right to Own. Further reading

Will Davies (2009) Reinventing the Firm, Demos. Matrix Evidence (2010) The employee-ownership effect: a review of the evidence, EOA. Cliff Mills (2009) Funding the future: an alternative to capitalism, Mutuo. Christian Wolmar (2011) Co-operative rail: a radical solution, Co-operatives UK.