It isn’t often that I feel strong emotion of any kind before I’ve had my breakfast on a Monday morning, but I was moved to fury this week when I heard George Osborne on the Today programme announcing the Conservative Party’s latest election-winning wheeze: worker co-operatives to run services in the public sector.
Analysing my anger under the shower a few minutes later, I realised that only part of it was directed at the sheer effrontery of Osborne and his fellow Bullingdon Clubbers for stealing an archetypical piece of grassroots socialism from Labour. Some of it was aimed at Gordon Brown, Alistair Darling and the rest of this Government’s dozy crew for leaving such a glaring opening for Osborne and company to exploit.
To be fair, it is true that Labour ministers have from time to time mumbled about the possibility of engaging in a little co-operative enterprise here and there. No doubt, there is a committee somewhere, charged with looking into it. However, they have seemed half-hearted – to say the least – and few voters would have got the message that this might be a central plank in Labour’s strategy for a further term of office.
But that is the message that Labour should have been broadcasting far and wide, ever since Brown got to Number 10. Co-operative enterprise could easily have been the Prime Minister’s “Big Idea”, ideally suited to the current atmosphere in which so many voters are switched off by the labyrinthine bureaucracy of the state-run machine.
Indeed, many people (including me) have been urging him to adopt it for a new state-run bank based on the Post Office and its shrinking but still extensive network of branch offices. What better use could there be for Northern Rock, now owned outright by you and me, than to be turned into a banking service for working-class people? After all, Northern Rock started life as a boring old mutual building society before greed transformed it into a branch of bandit capitalism.
And thinking about that transformation brought back my breakfast-time anger, this time directed specifically at Osborne rather than poor old Brown. It was the Tories – or, to be more precise, Margaret Thatcher – who changed the rules to enable the bandit capitalists to plunder the building societies by turning them into commercial banks and thus set up one of the conditions for last year’s banking crisis.
I have written about this most outrageous aspect of Thatcherism in this column before, but the story is so shocking that it bears repetition, if only as a reminder of what the Tories are really about. What happened was that, as a result of Thatcher’s rule changes, top brass in many of the building societies saw the opportunity to make themselves rich overnight by converting their mutual societies into commercial banks owned by shareholders.
Up until than, these building societies had been model examples of co-operative enterprise. They had been founded by the Victorians, with the admirable idea that the modest savings of the workers could be put to work as loans to other low income families to enable them to buy homes to live in. It worked admirably, although no one actually owned the societies. They simply belonged to their depositors and their mortgage holders, and the people they appointed to run the enterprise were modestly paid.
So when the greedy bosses and their carpetbagging backers in the City saw their chance to make their killing, all they had to do was persuade the depositors and the mortgage holders to vote in favour of changing themselves into banks. That ought to have been quite difficult, since the punters would have to vote against their own interests. But these guys knew a thing or two about the power of greed, so they harnessed it to their project. Quite simply, they bribed the poor saps with their own money, promising cash bonuses and shares in exchange for voting in favour of the change.
The bribes were quite often pathetically small, but they worked and, one after another, these upright Victorian institutions voted themselves into becoming more-or-less dodgy banks. Scarcely minutes were allowed to pass before the heads of these deplorable bucket-shops voted themselves gigantic pay increases. After all, they were now bankers, weren’t they, so they could hardly rub along on the wages of a mere building society manager.
With such people in charge, what happened later was not surprising. Being banks, they started to push their moneymaking activities beyond the tedious business of mortgage lending. By the time the credit crunch arrived, they were way out on a limb. The most egregious case, Northern Rock, was the first to go under. But one by one the others followed them.
Most are gone now, swallowed up by one or other of the big banks. The few which stayed as mutuals have also suffered a battering, but are still mostly standing.
It is a ghastly story – and one which ought, as a matter of taste, to have deterred George Osborne from re-entering a field so heavily heaped with Thatcherite ordure. But then, perhaps he is just too ignorant to know about it. He is, after all, nobbut a lad.
