I just want to start by saying what a privilege it is to be here in Cardiff at the first Co-operative Party Conference in what I believe is a new era of Labour Party politics.

I feel extremely privileged to be here, not just because the Co-operative Party’s strong links with the Labour Party, or the rising profile and contribution that it has been making to Labour Party policy – but because I believe that the values that you represent, have fought for, and continue to fight for, have never been more important than they are today.

Today I am going to set out how I believe we should respond to the coalition’s ‘Big Society’ narrative. For us to truly engage with this debate, I believe that it is not enough for us to expose the policy weaknesses of the coalition on the ‘Big Society,’ however serious and profound they may be. Our response needs to be for us to set out our own vision of how we build a society based on the inherently human values of mutuality, solidarity and reciprocity.

The Mutual Tradition

I want to take a moment to go back to our shared tradition and history.

Against the backdrop of nineteenth century powerlessness, the new working classes realised the need to take charge of their own affairs and stepped outside the control of the state to organise for themselves.

Weary of profiteering and exploitation, they set up a network of organisations dedicated to fair trade, a moral economy and mutual support.

In Manchester, the followers of the early socialist Robert Owen came together to establish a series of co-operative shops – ‘labour exchanges’ for the direct marketing of goods, and trade unions to advance the cause of Labour.

From this culture came the meeting in 1868 of the Manchester and Salford Trades Union Council which set in train the establishment of the Trades Union Congress and, ultimately, the formation of the Labour Party.

And from this same culture came the 1917 formation of the Co-operative Party and its alliance with Labour as a sister party.

This culture was based on a simple premise.

That we do better for ourselves if we co-operate with each other rather than just seeing ourselves as isolated individuals.

And this resonates with the new clause four in the Labour Party – that we can achieve more together than we can alone.

That self interest and altruism are not actually in conflict – but are actually in our own direct interests and those of our families.

That economic and social success can come hand in hand, for our collective mutual benefit and the benefit of others.

The Coalition Government

After just over a hundred days of this new coalition government, we should not underestimate the scale or nature of the challenges that we face as a party if we are to return to government at the next election.

In some quarters of the Labour Party there is a degree of complacency about the current situation. They see the collapse in support for the Liberal Democrats and the government’s forthcoming austerity programme as evidence that we will soon face an unpopular and discredited government.

I would argue that we should not underestimate the task in front of us. We are faced with a confident government, bristling with ideological purpose – determined to undo our legacy at all costs, and risk destabilising our economy and dismantling our public services in the process.

It is a government that seeks to steal our language of fairness, solidarity, responsibility and democracy. That lays claim to our founding values and principles, and presents a distorted version of our vision of society. That cloaks its own regressive actions with borrowed progressive words and limited progressive deeds.

The Big Society

There is no better example of this than in the coalition’s ‘Big Society’ narrative. Based on our founding traditions of collective action and co-operation, and a core part of our mission over the last 13 years, it is a beguiling idea that we should not reject out of principle.

There is much in this vision that fits in with our idea of what a good society should look like.

Communities should feel and be more powerful, and play an instrumental part in the decisions that affect their lives. Power can and should be devolved to the lowest possible level, and give individuals a real say over the organisations that play such an important role in their everyday lives.

There is, however, a profound difference between our visions of how to make society more powerful. For 13 years, we used government action to mobilise our traditions of collective action, self-help and co-operation. In contrast, the coalition’s plans for a ‘Big Society’ risk undermining the very infrastructure that gives power to local communities, because of its commitment to accelerated cuts in front line services and its ideological dedication to small government.

As our audit of ‘Big Society’ cuts has shown, the policies of this government have already cost civil society organisations at least £734 million, a figure that is likely to increase substantially after the Comprehensive Spending Review on October 20th. At the very moment that expectations are being raised, government action is damaging the ability of community organisations to deliver. With further spending cuts on the way, it is highly unlikely that civil society will become “bigger” over the coming months and years.

The Big Society plans for a ‘people power’ revolution will only work if they are applied consistently across government.

Yet the far-reaching reforms in health and education put extensive powers in the hands of professionals and the “market” not communities, and unbalanced by any real influence by patients, parents or the public.

While the coalition talks about parent power in education, the real drive so far has been a modification and acceleration of the academies programme, which hands control of schools largely to head teachers. Plans for NHS reform may have an avowed intent of establishing power more locally, but making GPs and private companies responsible for commissioning does not give patients and the public more say, but less.

This may be turning public service provision on its head, as Mr Cameron claims, but not in a way that puts communities in control. The reforms make schools and health services even less answerable to patients and parents, ending the ability of national and local government to hold them responsible for performance, but do not put any structures of direct accountability in their place.

Yet it is not enough for us to expose the policy weaknesses of the coalition on the ‘Big Society,’ however serious and profound they may be. To be a credible government in waiting we need to do more than just carp from the sidelines, but clearly set out our own compelling vision for how we build a society built on the inherently human values of mutuality, solidarity and reciprocity.

The Big Society is about more than public services

The coalition’s embrace of the ‘Big Society’ is a rational response to a period of profound and unprecedented change in our economy and our society.

In the wake of the credit crunch, the public have made it very clear that they are no longer willing to put their trust in organisations that they feel are not run in their interests and operate outside of their control.

And in response to the expenses scandal, the public have signalled the need for wide-ranging democratic renewal that will provide them with greater power over the issues that matter to them most.

In the post-banking crisis, post-expenses Britain, people want to feel a sense of ownership and control: something which both free market fundamentalism and remote and centralised statism are unable to meet.

This is partly expressed in a greater desire for more power over the public services that we rely on, to ensure that they can influence how those services are delivered.

But creating a real ‘big society’ is not just about what we do with our public services, however important, but about changing the nature of power and forging new bonds across our economy as well.

Because, whatever David Cameron would have you believe, the origins of the Financial Crisis and our subsequent economic difficulties did not arise as a result of the size of the state.

Nor can our present economic difficulties be merely explained by a misunderstanding of risk, under regulation or the greed of a small number of individuals, however important these were.

They were also about a corporate culture that was too focused on short term enrichment.

Where there was a lack of accountability between firms, their customers, and their ultimate owners.

Where businesses were too often run in the interests of the very few – and left the many to pay the price of their short term judgement and errors.

And the consequence of this approach has been a decline in the value of Britain’s biggest businesses by an average of 18% since September 2000 – despite the fact that the British economy has grown by more than 40% in the intervening years.

As well as the fact that too many of our companies are out of step with our needs as workers, customers and citizens of this planet.

So the creation of a truly ‘big society,’ requires us not just to rethink the relationship between the individual and the state, but our relationship with business as well. The type of society that Keir Hardie envisaged decades ago when he declared that we should not merely be subjects to pushed around by the state, nor commodities to be bought and sold by the market. A society in which our principles of mutualism, self-help and collective action not only form the way that we organise our public services but also the way that we do business.

A New Economic Approach

And there is no better living, breathing example of this economic approach than the co-operative and the wider mutual movement.

In banking, where trust has been severely hit, co-operative banks, mutual institutions and building societies stand out as ethical, values-led businesses, behaving responsibly in an industry where too many have not.

The transformation of the Co-operative Group’s business in recent years has also been dramatic. No longer is it the retailer where corporate structures were deemed more important than whether or not the shelves were empty. Through reconnecting with its core values and mission it has risen once again to meet the aspirations of the people that it exists to serve.

And you will not need me to tell you that recent years have seen the Co-operative Group double its market share in food, create a new Super-Mutual with Britannia and deliver record profits and sales through what has been a difficult time for us all.

All at the same time as maintaining an ethical and sustainable approach to all of its different operations.

And the fact that John Lewis was named as ‘Britain’s favourite retailer’ again this year testifies to the way in which the public is willing to get behind a company where employee ownership generates greater engagement, loyalty and co-operation amongst its staff and greater trust with its customers.

People trust the ethos.

And as a recent report from the International Labour Organisation has shown – at a time when businesses are struggling across the globe, co-operatives across the world are showing tremendous resilience.

Financial cooperatives remain financially sound; consumer cooperatives are reporting increased turnover and worker cooperatives are seeing growth as people choose the co-operative form of enterprise to respond to new economic realities.

From some of the smaller credit unions in Canada, to the Co-operative bank in Taiwan, and the retail giant that is Rabobank in Holland – there is evidence that the co-operative movement is thriving across the world.

Changing the way that we do business

Clearly part of our new vision has to be for us to support the creation of a much larger co-operative and mutual sector in our economy.

Not reliant on the capricious nature of capital markets, investor mood swings or complicated investment instruments – mutuals are sustainable businesses that put everyone with a stake in their success at the centre of their operations.

Fundamentally this comes down to their reason for doing business – driven by a belief that people can achieve most when they work together, and that business should seek to serve wider social ends than short-run profitability.

This is why I believe that a strong and vibrant mutual sector must be a key feature of our banking system in the years to come, and that we should start with Northern Rock. A return to mutual ownership would put the bank back in the hands of its customers and allow it to take a long-term view of its members’ interests. As we collectively count the costs of short-term thinking in banking, this could provide some much needed stability to help ensure that we do not repeat the mistakes of the past.

And it’s for this reason that your work as our sister party has been so important in informing the direction of Labour Party policy in other areas as well – leading to our manifesto commitments to extend employee ownership, build new forms of co-operative housing and use our ‘collective power’ to save money on our bills and tackle climate change.

But we also need to accept that within a growing economy there will always be diversity in our economic structures, and that is something that we should celebrate.

And for the foreseeable future, it is likely that most significant enterprises will continue to be owned by shareholders.

So our vision of a good society cannot be built through the creation of new mutuals alone – but this must also be accompanied by a fundamental change in the corporate culture that underpins many of our largest businesses.

A corporate culture that is as much about values as it is about outputs. That cares about its customers’ experiences as much as their wallets.

That devotes the same attention to cutting emissions as it does to cutting costs.

In short, a corporate culture that seeks to act in all of our interests – as employees, customers, investors and members of the society that we live in.

A fundamental change in the way that we do business – based on the co-operative values that we can see thriving in this room and across the breadth and depth of the country.

A Labour vision of the ‘Big Society’ Let me be clear: the coalition’s vision for a ‘Big Society’ is fundamentally flawed, due to their misunderstanding of the important partnership role that the state and local government can play with civil society.

But we should seize the challenge to set out our own vision of the good society, where the values of your movement are brought not just into the public sector, but our wider economy as well.

So we cannot just set out a compelling vision of a better future for this country, but begin to build it to.

Ths originally appeared on LabourList.org