Throughout the festive season, LDV is offering our readers a load of repeats another chance to read the 12 most popular opinion articles which have appeared on the blog since 1st January, 2009. The seventh most-read LDV op-ed of 2009 was by Liberal Vision’s Sara Scarlett, and originally appeared on 11th October …

Opinion: A Cooperative Coalition

The general consensus among today’s politicos is that the dye is now cast for the next General Election. Those at the helm of all “two and a half” major parties are the leaders they assume will take them into the next General Election – the only questions now are “how big will David Cameron’s majority be?” and “what will the LibDem vote share be compared to Labour’s?” And then there’s the ‘C’ word – no not that one. Not that one either…

That’s right: coalition! But with whom? New Labour? Arch-authoritarian, spendthrift, warmongering sycophants… no thanks. The Tories? A party that exists to protect the vested interests of the rich, equally authoritarian and who will most probably crack down on personal freedom like a bitch. Equally unappealing.

If the election goes to a tie break the only party the LibDems should consider forming a coalition with is the Cooperative Party.

Humour me.

I’m in fact an Old Labour hack. And by Old Labour I mean the labour movement circa the 1870s: a golden era of working class political organisation – the inception of cooperatives, mutuals and friendly societies. Free-market capitalism is the best and only moral form of economic organisation. It is the most efficient creator of the wealth that catalyzed the cooperative movement.

Indeed, the labour movement became a powerful mass movement in the nineteenth century largely as a result of it aiding the material and conditional liberation of working people in such areas as health and welfare. By attempting to keep government control and elite politics out of people’s lives, friendly societies, mutuals and co-operatives all promoted the means by which people could own, control and develop their own healthcare and welfare institutions.

The inception of the welfare state ripped the soul out of the working classes and is now used to justify a level of state intervention in our lives that no liberal should find acceptable. ID cards for benefits, for example, or the Tory proposals of giving privileged access to “public services” to people who comply with their health programmes. Despite the welfare state’s good intentions it has replaced a plethora of organic, voluntary, localised and democratic organisations with a single involuntary, centralised and bureaucratic entity enforced by a political elite, and designed to satisfy their own prejudices.

Big government has been a disaster for the poor. After 12 years of a Labour Government social mobility is worse despite the extra money thrown at state education. The quality of our healthcare has only increased slightly despite heavy investment, with the head of the Euro Health Consumer Index stating: “It seems that management of the behemoth NHS organisation is difficult to do under a centralised paradigm.” And to add insult to injury Gordon Brown raided your pensions for £75bn to pay for it all.

Although also descending from the same bright beginnings, New Labour are perversely supporters of the welfare state – the natural enemy of cooperatives and friendly societies. Which is why I find New Labour and the Cooperativists strange bedfellows.

The natural home of the cooperative movement shouldn’t be with a party that has scuppered and continues to disincentivise co-ops and friendly societies. It should be with us: the party of lower and middle-income households, the free market, small government and localism. If the LibDems were to truly embrace the cooperative movement it would send a strong signal that we are serious about cutting centralised bureaucracy and trusting individuals to plan for their own futures.

Smashing the state’s monopoly on welfare provision would mean the individuals managing welfare would no longer be faceless bureaucrats, based remotely from its beneficiaries, they would be directly democratically accountable co-owners of the organisation they serve with a vested interested in managing that organisation’s funds responsibly.

Cooperative and friendly organisations could even work alongside government welfare schemes, where universal state funding was considered necessary. For example, universal health savings accounts could involve a friendly society or co-operative bank of your choice, providing insurance for ‘catastrophic’ health set-backs and a savings account for predictable and low-cost ailments – hence maintaining a health system that would always be treat-first-settle-payment later without the risk of bankruptcy or debt, yet with more choice and less rationing.

National welfare organised this way would encourage different welfare providers to compete and deliver better service. The indignity of the dole would be a thing of the past with every adult of working age having the option of appropriate payment protection cover. Tuition fees would not be an issue with child trusts available from birth and our pensions would no longer be at the mercy of spendthrift Chancellors.

If I were Nick Clegg what I would be doing now (not after the next election, but now) would be approaching the Cooperative Party and asking them to split with the Labour Party and join a coalition with the Liberal Democrats. We set to gain 29 MPs, 12 Peers and 9 MSPs. Although one of those is Ed Balls … you can’t have your cake and eat it… Nonetheless, we would be proactively changing the political landscape rather than being at the mercy of it.

Nevertheless, if the Cooperativists cannot overcome their Stockholm syndrome then let’s embrace cooperativism, mutuals and friendly societies with gusto anyway. Let’s take the best of free-market capitalism and the best of socialism removing the evils of the state in the process. It’s moral, it’s just, it’s Liberalism.

* Sara Scarlett is a member from Surrey Heath constituency where she is the Youth Officer of Surrey Heath Liberal Democrats. She is also Secretary of Royal Holloway Liberal Youth and Director of Development for Liberal Vision. She is writing in her personal capacity.