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The Political Appeal of Co-ops and Mutuals

George Osborne announced the Conservatives proposal to mutualise and co-op the public sector, describing it as the ‘biggest social revolution since Thatcher sold council houses’. But their proposal just shows how little they understand the essence of those movements. Mutuals and co-ops operate within the for-profit sectors but instead of paying surpluses over to external shareholders they pay some to their members and accumulate the rest within the business. That’s the whole point. That was how the great mutual financial institutions and building societies got to be so big and so successful. The rape and destruction of so many, almost including the Co-op itself, was sanctioned and encouraged by the Thatcher government.

So how would mutuals and co-ops operate in the public sector with no surplus to distribute and accumulate? What would be the point? Well, George Osborne says, they would be able to work without the central controlling bureaucracy. So, was he saying there would be no central regulation or control? Well, not quite that, Osborne admitted, there would still have to be performance standards. So what did this social revolution amount to, other than confusion? Well, it was a reply to Gordon Brown’s earlier announcement that mutualism and co-ops would be at the centre of Labour’s election manifesto. But not a very convincing reply. No more convincing, in fact, than Brown’s own commitment. It would be rather better if politicians thought through their policies before deciding on the accompanying sound-bite.

Cadbury Directors Acting Illegally

The Cadbury board have the legal duty, according to the Companies Act of 2006, “to promote the success of the company for the benefit of all its members and in doing so have regard (amongst other matters) to a) the likely consequences of any decision in the long term, b) the interests of the company’s employees” as well as the interests of other stakeholders. The board appear to have ignored these legal duties in accepting the bid on the apparent grounds that the share price offered is probably higher then the company would be likely to achieve in the next two or three years if it continued its independent existence.

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