Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.
It’s difficult nowadays to imagine that people ever felt affection for a bank. But listen to staff of Northern Rock and residents of the north east and you hear a story of a bank that was seen as a responsive and, in retrospect, even a loved public service.
It’s odd, therefore, to hear the one recent reference to mutuals by a government minister (Tessa Jowell in December) being applied not to overcoming the disasters of finance plcs but to the questionable benefits of breaking up the public sector. This included the laughable suggestion that a mutualised public sector could draw on ‘the efficiency of the private sector’.
Northern Rock’s collapse was the first visible sign of the wider financial crisis, which was the result of precisely the forces of profit maximisation that the mutuality model was designed to challenge. These were typified by the company’s post de-mutualisation CEO, Adam Applegarth, and his £700,000 pay off. Now the profitable parts of the company are set to be sold off to the private sector again. A tragic case of socialising debt and privatising profit.
Northern Rock, saved by a government loan of £26 billion, has been split in two. On the one hand there is now Northern Rock plc, a potentially very profitable high street bank. Insiders reckon that annual profits could be over £250 million within its first year. On the other hand is an organisation that is responsible for the risky mortgages, repayment of the government debt and for the existing staff pension fund and pension shortfall of £60 million. It will remain the responsibility of the government.
But all is not lost. The force of a strong pro-mutual regional tradition is joining with the strength of economic arguments that start from the public good. A growing campaign is underway for the remutualisation of Northern Rock. It began with a report by the Centre for Mutual and Employee-owned Business at Oxford University, which argues, for example, that mutual ownership can counter-balance the short-termist pressures of the City. It also argues that mutuals help to reduce the present concentration of financial sector resources and employment, dispersing wealth and welfare to local economies.
These arguments and more have been taken up by Alliance For Finance, an increasingly active confederation of 15 trade unions and staff associations in UK financial services (with a total of 200,000 members in all). Russell Greig, its secretary, is based in Chester-le-Street, the heart of Northern Rock country.
He feels that the company would no longer exist if it hadn’t been for government aid. So ‘it makes sense that this support should be returned to the community. It can’t be right that the financial support pumped into Northern Rock should simply be used to allow another plc to profit. The new company could be turned into a community-owned organisation serving the needs of the communities and able to re-invest into them.’
When Greig talks of reinvestment in the communities, he means investing the profits into giving loans to more people and on better terms. He also means giving more resources to the Northern Rock Foundation, which, before the crisis, was a major funder of community projects in the North. ‘Instead of pressure from shareholders in pursuit of profits and dividends, the pressure will be from the community for a socially responsible lender, serving the needs of its customers (owners) and wider community,’ he says.
There’s a long term interest for the government here: as the mutual company becomes profitable it would steadily repay the government’s loan. But there’s also a case for the government returning a proportion of this value to the company as a government investment. ‘The government could then use the mutual to provide socially useful banking to overcome financial and economic exclusion,’ argues Russell Greig. ‘It could also use it as a basis to regenerate deprived areas again through the communities where it operates and would effectively serve.’
Some 100 MPs have signed an early day motion calling for Northern Rock’s remutualisation. Does Labour have the courage to apply its rhetoric about mutualisation to the financial sector and build on the century-old success stories of co-operative and mutual organisations?
Compass is currently working on issues of remutualisation, looking at the case of Northern Rock – contact Compass for more details.
The police spend little of their time making arrests, and most crimes are not solved, writes Alex Vitale – their real purpose is social control
Many important things happened on conference floor, reports Alex Nunns – but you wouldn’t know it from reading the newspapers
Radhika Desai says Capital by Karl Marx is still an essential read on the 150th anniversary of its publication
The Spanish state is seizing ballot papers and raiding meetings, write Ignasi Bernat and David Whyte – but it is being met with united resistance
The crunch executive meeting ahead of Labour conference agreed some welcome changes, writes Michael Calderbank, but there is still much further to go
Dipesh Pandya speaks to documentary film-maker Sanjay Kak, who for 30 years has been working outside the mainstream to tell a story rooted in the struggles of those excluded by India’s militarism and its narrative of neoliberal growth
Jeremy Gilbert on how radical Labour politics can be inspired by the utopianism of the counterculture
Disasters have unequal impacts – it's the poor and marginalised who suffer most. David Harvey writes on Hurricane Harvey
#MeToo is necessary – but I’m sick of having to prove my humanity
Women are expected to reveal personal trauma to be taken seriously, writes Eleanor Penny
Universal credit isn’t about saving money – it’s about disciplining unemployed people
The scheme has cost a fortune and done nothing but cause suffering. So why does it exist at all? Tom Walker digs into universal credit’s origins in Tory ideology
Meet the digital feminists
We're building new online tools to create a new feminist community and tackle sexism wherever we find it, writes Franziska Grobke
The Marikana women’s fight for justice, five years on
Marienna Pope-Weidemann meets Sikhala Sonke, a grassroots social justice group led by the women of Marikana
Forget ‘Columbus Day’ – this is the Day of Indigenous Resistance
By Leyli Horna, Marcela Terán and Sebastián Ordonez for Wretched of the Earth
Uber and the corporate capture of e-petitions
Steve Andrews looks at a profit-making petition platform's questionable relationship with the cab company
You might be a centrist if…
What does 'centrist' mean? Tom Walker identifies the key markers to help you spot centrism in the wild
Black Journalism Fund Open Editorial Meeting in Leeds
Friday 13th October, 5pm to 7pm, meeting inside the Laidlaw Library, Leeds University
This leadership contest can transform Scottish Labour
Martyn Cook argues that with a new left-wing leader the Scottish Labour Party can make a comeback
Review: No Is Not Enough
Samir Dathi reviews No Is Not Enough: Defeating the New Shock Politics, by Naomi Klein
Building Corbyn’s Labour from the ground up: How ‘the left’ won in Hackney South
Heather Mendick has gone from phone-banker at Corbyn for Leader to Hackney Momentum organiser to secretary of her local party. Here, she shares her top tips on transforming Labour from the bottom up
Five things to know about the independence movement in Catalonia
James O'Nions looks at the underlying dynamics of the Catalan independence movement
‘This building will be a library!’ From referendum to general strike in Catalonia
Ignasi Bernat and David Whyte report from the Catalan general strike, as the movements prepare to build a new republic
Chlorine chickens are just the start: Liam Fox’s Brexit trade free-for-all
A hard-right free marketer is now in charge of our trade policy. We urgently need to develop an alternative vision, writes Nick Dearden
There is no ‘cult of Corbyn’ – this is a movement preparing for power
The pundits still don’t understand that Labour’s new energy is about ‘we’ not ‘me’, writes Hilary Wainwright
Debt relief for the hurricane-hit islands is the least we should do
As the devastation from recent hurricanes in the Caribbean becomes clearer, the calls for debt relief for affected countries grow stronger, writes Tim Jones
‘Your credit score is not sufficient to enter this location’: the risks of the ‘smart city’
Jathan Sadowski explains techno-political trends of exclusion and enforcement in our cities, and how to overcome this new type of digital oppression
Why I’m standing with pregnant women and resisting NHS passport checks
Dr Joanna Dobbin says the government is making migrant women afraid to seek healthcare, increasing their chances of complications or even death
‘Committees in Defence of the Referendum’: update from Catalonia
Ignasi Bernat and David Whyte on developments as the Catalan people resist the Spanish state's crackdown on their independence referendum
The rights and safety of LGBTQ+ people are not guaranteed – we must continue to fight for them
Kennedy Walker looks at the growth in hate attacks at a time when the Tory government is being propped up by homophobes
Naomi Klein: the Corbyn movement is part of a global phenomenon
What radical writer Naomi Klein said in her guest speech to Labour Party conference
Waiting for the future to begin: refugees’ everyday lives in Greece
Solidarity volunteer Karolina Partyga on what she has learned from refugees in Thessaloniki
Don’t let Uber take you for a ride
Uber is no friend of passengers or workers, writes Lewis Norton – the firm has put riders at risk and exploited its drivers
Acid Corbynism’s next steps: building a socialist dance culture
Matt Phull and Will Stronge share more thoughts about the postcapitalist potential of the Acid Corbynist project
Flooding the cradle of civilisation: A 12,000 year old town in Kurdistan battles for survival
It’s one of the oldest continually inhabited places on earth, but a new dam has put Hasankeyf under threat, write Eliza Egret and Tom Anderson
New model activism: Putting Labour in office and the people in power
Hilary Wainwright examines how the ‘new politics’ needs to be about both winning electoral power and building transformative power
What is ‘free movement plus’?
A new report proposes an approach that can push back against the tide of anti-immigrant sentiment. Luke Cooper explains
The World Transformed: Red Pepper’s pick of the festival
Red Pepper is proud to be part of organising The World Transformed, in Brighton from 23-26 September. Here are our highlights from the programme
Working class theatre: Save Our Steel takes the stage
A new play inspired by Port Talbot’s ‘Save Our Steel’ campaign asks questions about the working class leaders of today. Adam Johannes talks to co-director Rhiannon White about the project, the people and the politics behind it
The dawn of commons politics
As supporters of the new 'commons politics' win office in a variety of European cities, Stacco Troncoso and Ann Marie Utratel chart where this movement came from – and where it may be going