Train cooperative on track in SW England?

Paul Gosling reports:

Electrification of the London to Swansea rail line is good news for public transport users in the South West and the Government’s approval for Network Rail to meet the £1 billion cost is a demonstration of real commitment not just to the rail system, but also to combating climate change.

But for many people away from the main urban centres, what is needed is more than just faster journey times to London. They demand connectivity that reduces rural isolation, makes journeys faster, cheaper and easier and improves the economic prospects of smaller towns and villages.

This is where Go! Co-operative comes in, which is not only one of the newest co-ops to be established, but also the most recently established train operating company. Its prospectus for raising capital is about to be published, with the ambition of raising a quarter of a million pounds over the next two years.

Go! Co-op intends to be the fifth train operating company taking advantage of the principle of open access to rail lines that is enshrined in legislation and which is intended to increase the provision of services by sharing existing lines. This provision enables additional services to operate alongside the main rail franchises. Existing open access rail operators include Heathrow Express and Hull Trains.

However, Go! Co-op would be the first open access train provider running as a multi-stakeholder co-operative that brings together the interests of commuters, workers and the communities that would be served, via their local authorities. It is backed by some heritage railway operators.

The co-operative’s business planning is already well developed, thanks to seed-corn funding supplied by Co-operatives UK and the Co-operative Group, through the Co-operative Fund, backed by practical support from the Somerset Co-operative Services.

Go! is looking at various routes, including local branch line operations and longer cross country services. Some of these involve open access services on Network Rail lines, while others would operate in partnership with heritage rail and other independent railway owners.

At this stage, it is not possible to say which routes will be pursued — detailed studies on line capacity and passenger demand are needed first, as well as more negotiation with potential partners.

The chair of Go! Co-op is well known co-operative activist, Tim Pearce — the South West regional organiser for the Co-operative Party until he retired three and a half years ago.

“Existing train services run to London,” explains Mr Pearce. “Our intention is to serve other communities that don’t have good connections to anywhere. Cross-country connections are important. We are looking to potential routes in the south of England on existing rail networks.”

The Go! Co-op initiative has been given extra impetus by the recent publication of the Association of Train Operating Companies’ (ATOC) document Connecting Communities, which supports the principle of much improved connectivity for isolated communities by making greater use of lines that, at present, run few services. “We are interested in underused and also closed lines and closed stations, but that’s a lot of money,” says Mr Pearce.

“We are interested in the electrification, but that is a long time ahead, at least five years. It does raise interest in the rail network and the South West is getting a fairer crack of the whip than it has in the past.

“We want to develop routes in the South, but including the North. We are hoping to develop routes from the South to the Midlands, servicing the West Midlands conurbations, developing links where they don’t exist.

“We are trying to raise money from potential commuters and from councils along the rail lines. We will run it as a multi-stakeholder co-op.

“The communities that benefit will have control over the service. We envisage a scenario where the guy who pushes the trolley can be on the board. I have been very impressed by the results of [societies’] board elections where you get electricians and so on elected to the board.”

Mr Pearce’s involvement in the project arose from a motion put forward to Co-operative Party Conference in 2007, which called for the mutualisation of Network Rail. “We have made some progress there,” says Mr Pearce. “We still hope to get a result from that and are fairly optimistic.

“We then organised a conference last year [on Network Rail mutualisation]. That was successful. It had a lot of rail people and Co-op people there. Basically the idea [for Go!] started to gel about that time and because of that conference.” With that momentum established, one of the founders the project — Alex Lawrie of Somerset Co-operative Services — invited Mr Pearce to get involved.

The timetable for progress is as impressively ambitious as the project itself. The co-op has already been authorised by the Financial Services Authority to raise the funds. It is also working with the FSA to develop rules that allow for withdrawable and transferable Industrial and Provident Society share capital raised from members and outside investors. Outside investors will have enough voting power to protect their investment, but in accordance with co-operative principles the passenger and employee members between them will have effective control.

Go! believes, given the example of the major fund raising achieved by windfarm co-ops, that it can raise the necessary investment. Assuming it does so, it hopes to gain route authorisation some time next year and begin services in 2011.

Ultimately, Go! has aspirations even beyond this — its motivation is to improve connections between communities, not just to run rail services. So it would also like to be involved in running bus services that feed the rail services and perhaps operate bike hire and car clubs.

It is one of the most impressive and ambitious co-operative projects to come forward in many years. But it is also firmly grounded in a sense of realism — it deserves wide support.

Co-op movement calls for change at G20

Social enterprise has joined the calls to Put People First and to consider the model of co-operative ownership:

Co-operatives UK is asking members to support calls on G20 leaders, when they meet in London on April 2nd, to put people first by providing decent jobs and public services for all; ending global inequalities of wealth and power, and creating a green economy.

In a week of action in the run up to the G20 Summit, development NGOs, trade unions, faith groups, anti-poverty campaigners and international social movements are uniting to make their voices heard.

Pauline Green, Chief Executive of Co-operatives UK, said: “Co-operatives are founded on values of equality and solidarity and they believe in social responsibility, caring for others and protecting the environment.

“The G20 Summit in London is a terrific opportunity to get our message across that more should be done to end global inequality, provide fair employment opportunities for all and help protect the planet.

“The experience of the world economy over the last few months has highlighted the inadequacies of the financial and economic system and lessons need to be learned. Co-operative businesses, like all businesses, are being affected by the economic downturn and more co-ordinated action needs to be taken by governments.

“This is the best opportunity for a generation to learn from the mistakes of the past and to create a more inclusive global system that offers fairness and opportunity for all. This isn’t the time for retrenchment and protectionism, but for reaching out to create a new global system which rewards self-help and recognises the importance of community.”

Added Dame Pauline: “Co-operation as a business model is recognised the world over as a sustainable and people-centred way of doing business that understands the importance of ‘fair globalisation’.

“It provides a means of helping developing countries maximise their potential and thus helping their people live better lives.”

Co-operatives UK is also supporting calls for change from the International Co-operative Alliance (ICA), whose members represent over 800 million individuals in co-operatives around the world. The ICA has issued an Open Letter to the governments of the G20.

Iain Macdonald, ICA Director General, said: “The ICA is particularly concerned that the G20 examines every option in seeking to overcome the current financial crisis.

“We are asking the G20 governments to give serious consideration to the advantages of the co-operative model of business. With over 150 years of commercial success in all economic fields, it is our conviction that co-operative enterprise, with its unique set of values and principles, can provide possible solutions particularly in promoting stability in the global economy.”

The bailout has failed – time to nationalise the banks

Word is that the Treasury is thinking of bailing out the banks again.

The Prime Minister denies its a priority, preferring to talk about how he’s going to create jobs to curb rising unemployment.

But it’s clear that the stated aim of the bailout – to increase lending to businesses and to new start-ups and small businesses in particular – has failed.

And without strong action, the recession will deepen – schemes to curb unemployment will have no effect unless they are matched by efforts to stop jobs being lost in the first place.

The only solution to the credit crisis is spelled out in the latest edition of Red Pepper:

Rebuilding banking

Leo Panitch argues that what is needed is for the banks to become a public utility

First, let’s be clear about capitalism – and with it the character of the state under capitalism. There is a conventional assumption, a leftover of the cold war perhaps, that somehow capitalism is essentially about the market and socialism is essentially about the state. In fact, a central historical feature of the state in capitalist societies is the role it plays as guarantor of private property and, most importantly for the smooth running of the financial markets, that it will always honour its bonds – that is, its borrowing from the private banks.

Because of this guarantee – the promise to pay others back from taxation revenue in the future – government bonds, whether issued to finance war or to finance welfare, constitute the least risky form of lending. As such, it forms the foundation of financial markets’ role in sustaining the ability of capitalists generally to accumulate – to continue to invest and make profits. This centrality of the state for capitalist accumulation is most notable with respect to those dominant states, like the USA, whose bonds are the foundation on which all calculations of value in global capitalism are based; states that host and support the main centres of international financial markets, such as New York and the City of London.

Understanding the role of the state in a capitalist society helps us to see why, when a government bails them out with public money, the bankers do not see this as the start of socialism. On the contrary, they see it as the government fulfilling its duty to the financial markets – whose smooth running it both depends on and sustains, by providing the basis of confidence in the credibility of the banking system.

So it is misleading to see government involvement in the banks – whether it be the pure bailout of the original Paulson program in the US, or the subsequent non-controlling equities taken by the US, British and other governments – as per se a move away even from neoliberalism. (It is also misleading to see neoliberalism as being about the withdrawal of the state from the markets – and therefore this current involvement of the state as a defeat of neoliberalism. The state under neoliberalism has been very active in promoting the vast expansion of financial markets and facilitating their volatile growth; and, as this volatility inevitably led to repeated financial crises, in keeping the financial system going from moments of chaos to moments of chaos.)

Does this mean that this present crisis of the financial markets is not an opportunity to debate and press for alternatives? And where do we start?

It is an opportunity because in this crisis it is clear that what has been misleadingly billed as the ‘free market’ has failed and is seen to have failed, and also because it is clear that states have been responsible for promoting what has now failed, and that they now need to come to the rescue of the banks. This concentrates the minds of most people on the problem: their pay cheques are deposited with banks, their pension savings are invested in the stock market, their consumption is reliant on bank credit, and is the roof over the heads, as heavily-mortgaged home owners.

It is notable in this respect that going back over the last century, alongside the various movements that arose to struggle for the vote for working people, there has always been pressure to control the financial system, and even to bring the banks under public ownership, reflecting a certain common sense that the financial system ought to be accountable to or even belong to the people – that money should be become a public resource and banks a public utility. Indeed, this democratic pressure system was not without results: some of the regulations that states did put on the banking system after previous crises were also a response to demands from below that people should not be fleeced by the bankers.

For example, the nationalisation of the Bank of England was meant to bring the government’s agent in the financial markets under democratic control – although in fact the Bank of England now acted inside the state as the voice of the City within the state, representing the power of financial capital.

The lessons began to be learnt in the wake of the rise of the new left and the crisis of the Keynesian welfare state in the 1970s. It was recognised that the only way to overcome the contradictions of the Keynesian welfare state in a positive manner was to take the financial system into public control. (The best popularly written example of this, and still worth reading today, is Richard Minns, Take Over the City: the case for public ownership of financial institutions, Pluto 1982.) The left in the British Labour Party was able to secure the passage of a conference resolution to nationalise the big banks and insurance companies in the City of London, albeit with no effect on a Labour government that embraced one of the IMF’s first structural adjustment programmes. We are still paying for the defeat of these ideas (and the industrial strategies referred to by Stuart Holland on page 22). It is now necessary to build on their proposals and make them relevant at the current juncture.

The scale of the crisis today provides an opening for the renewal of radical politics that advances a systemic alternative to capitalism. It would be a tragedy if a more ambitious goal than making financial capital more prudent was not on the agenda.

It is hard to see how anyone can be serious about converting our economy to green priorities without understanding that we need a democratic means of planning through new sets of public institutions that would enable us to take collective decisions about allocating resources for what we produce and how and where we produce the things we need to sustain our lives and our relationship to our environment. The reasons why trading in carbon offsets as a solution to the climate crisis is a dead end are shown in this financial crisis. It would involve depending on the kinds of derivatives markets that are so volatile and are so inherently open to financial manipulation and to financial crashes. (The recently published Green New Deal begins to address these questions.)

In terms of immediate reforms – in a situation where the only safe debt is public debt – we should start with demands for vast programmes to provide for collective services and infrastructures that not only compensate for those that have atrophied but meet new definitions of basic human needs and come to terms with today’s ecological challenges.

Such reforms would soon come up against the limits posed by the reproduction of capitalism. This is why it is so important to raise not merely the regulation of finance but the transformation and democratisation of the whole financial system. What is in fact needed is to turn the whole banking system into a public utility so that the distribution of credit and capital would be undertaken in conformity with democratically established priorities rather than short term profit. This would have to involve not only capital controls in relation to international finance but also controls over domestic investment, since the point of taking control over finance is to transform the uses to which it is now put. And it would also require much more than this in terms of the democratisation of both the broader economy and the state.

Of course, without new movements and parties that can rebuild popular class forces this will fall on empty ground. Crucial to this rebuilding is to get people to think ambitiously again. However deep the crisis, however confused and demoralised the financial elite inside and outside the state, and however widespread the popular outrage against them, this will require hard and committed work by a great many activists. We will need to put our minds to the hard questions of what the new institutions of democratic public finance would look like – and what kinds of movements would be needed to build them.

Leo Panitch’s book Renewing Socialism is published by Merlin Press. A further article on ‘The Current Crisis and Socialist Politics’ by Leo Panitch and Sam Gindin can be read online at http://www.socialistproject.ca

TUC calls for a worker-friendly new year

TUC new year message

In his new year message to trade union members published today (Tuesday), TUC General Secretary Brendan Barber said:

‘2009 has to mark a decisive turning point, away from the neo-liberal market-always-knows-best conventional wisdom that brought our economy to the brink of a catastrophic collapse, towards a fairer, more balanced economy delivering sustainable prosperity.

‘This is going to be a grim year. Unemployment will increase every month. Some predict it will hit three million, but in truth no-one knows.

‘First because we have little experience of a recession driven by a financial collapse, and secondly because we do not know how bold our Government – and as importantly, other governments meeting together as the G20 in April in London – will be.

‘Government therefore has three priorities in the year ahead:

* it must take every action necessary to make the recession as short and as shallow as possible;
* it must develop the proper policy response to mass unemployment;
* it must use these and other policies not just to ensure that we do not repeat the mistakes that led to the financial collapse, but also to ensure that we emerge from recession as a fairer, greener and more sustainable economy.

Action to tackle the recession

‘The Government must be prepared to take further bold action to counter the recession and to save jobs.

‘The roots of this recession lie in the failure of the finance and banking sectors, and while the Government deserves praise for setting the international pace on the bail-out of banks, we do not yet have a banking system that is truly serving the interests of business or household borrowers. Banks are putting building up their own balance sheets and paying back government loans as their top priorities. But they also still hold high levels of ‘toxic’ debts which prevent them from dealing with other banks in a normal way. The Government and the Bank of England must therefore consider injecting even more support into the financial system to get credit flowing again.

‘The Government cannot be expected to come to the aid of every company that faces difficulties but it must be prepared to look at providing short term assistance to strategic companies in sectors vital to the future of Britain.

‘The Government should consider a further stimulus package in the Budget. Barack Obama’s team are already talking of a big package to boost the US economy. The UK should follow suit – and also use the April G20 summit in London to create a coalition of the willing to wage war on unemployment, poverty and recession.

‘As well as bringing forward planned infrastructure projects, ministers should be fast tracking new projects to ensure that further work can start when these finish. The UK is still suffering from a lack of investment in the key infrastructure a modern low-carbon economy requires.

Action to help the unemployed

‘Too much government policy towards the unemployed still tends to be trapped in the idea that there are enough jobs to go round, and that the unemployed either lack the skills or the motivation to get work. While of course with rights come responsibilities, the thousands of people losing their jobs every week throughout 2009 should not be treated as potential scroungers but victims of economic forces well beyond their control. They will need help through benefits and support through training and job search.

‘Despite its tough presentation and some objectionable policies such as workfare, there were some good proposals in the welfare reform Green Paper to make Job Centre Plus services better tailored to individual needs. Mass unemployment will make it even harder for those who normally find it more difficult to get work such as disabled people and those juggling child care and work. There needs to be specific help for such groups – such as an increase in child care, which in turn creates jobs.

‘The TUC has already called for better benefits, higher statutory redundancy pay and a bigger tax allowance for redundancy pay to provide more help for the newly unemployed. We now look for action in the Budget on these issues.

Action to create a fairer, greener and more sustainable economy

‘2009 is going to be tough, but it can still be made positive if it becomes a turning point – the year in which we set out to build a deliberately different kind of economy.

‘That first means recognising the mistakes of the past – made not just by this Government, but by governments and the economic and political establishment almost everywhere.

‘We have given far too much weight to the interests of the finance sector, and began to believe it could create wealth simply by moving it around, rather than through long-term investment in the goods and services that people want and need.

‘The challenges we face are clear. Even before the recession we were scarred by poverty, particularly child poverty. Our society was coming under increasing strain from growing inequality as a new class of the super-rich escaped their responsibilities to pay a fair share of tax. We had neglected important sectors of the economy as we gave preference to financial services. We have failed to do enough to meet the environmental imperative.

‘This challenges us all to put the measures we will need to beat the recession to a longer term purpose of building a better greener and fairer economy that can emerge the other side of the downturn.

‘This will require:

* a new kind of industrial strategy – not a return to picking winners and easy hand-outs, but strategic support to the sectors where we are already strong but could do better. Some will be in manufacturing, but others will be in services and parts of the economy often neglected in such discussions such as the creative sectors.
* A green industrial revolution that recognises that many industries will have to adapt to survive, but that also that the environmental challenge can generate thousands of productive worthwhile jobs, and build on the strength of our science base.
* An intensification of efforts to make society fairer – the recession should encourage the government to speed up efforts to eliminate child poverty.
* A fairer tax system. The government is right to increase borrowing to maintain the strength of the economy. But this borrowing and decent public services will have to be paid for, and 2009 must see a real debate on how to make the tax system fairer. There is a real demand for the super-rich to pay a fairer share. President Elect Obama has been a long-time supporter of a crack down on the tax havens used by multi-nationals and the mobile super-rich to avoid tax.
* A new kind of banking system that no longer threatens international economic stability and instead serves the rest of the economy and society. Britain’s banks already look very different. Some are now state-owned, some have large public stakes and all have received substantial help from the Bank of England and the taxpayer. At the very least we will need new regulatory structures to enforce stability but also to protect the consumer in a sector with less competition.

‘2009 will not be easy year, but it could be the turning point that will make 2010 not just the start of recovery, but the first steps in building a new economy.’

Two protests, one headline

I am against a third runway for Heathrow and for a referendum on the EU consti-treaty.

I’d be happy if both of yesterday’s protests were at the top of the news agenda, but it seems that only if you do something shocking (like, get on top of the House of Commons) does your cause get mentioned.

You can understand, given the slight attention paid to the “I Want A Referendum” demo, why people think marching has no effect…

From the Star:

Pro-referendum Parliament lobby
(Wednesday 27 February 2008)

DEMOCRACY campaigners held a mass lobby of Parliament on Wednesday urging MPs to back the call for a referendum on the neoliberal EU treaty.

The I Want a Referendum group’s action took place a week before MPs vote on a Tory amendment to the Treaty Bill, which calls for a referendum.Ministers claim that their 2005 “promise” of a vote on the EU constitution does not apply now as the treaty is different. But I Want a Referendum campaigners have pointed out that it is the original constitution in all but name.

Spokesman Neil O’Brien said that he wanted a vote for the good of democracy, adding: “I want to stop the government from wriggling out of the promise to hold a referendum.”

The cross-party campaign has also gained support from Labour veteran Tony Benn, who has written to all 646 MPs urging them to defy pressure to ratify the treaty in a Commons vote.

“The treaty transfers important powers to others in Europe. This decision must be made by the British people,” Mr Benn insisted.

Liberal Democrat leader Nick Clegg was cautioned by Speaker Michael Martin on Wednesday after attacking “clapped-out, 19th century procedures” in the Commons, which he said were preventing a vote on a referendum on Britain’s EU membership.

His foreign affairs spokesman Ed Davey was ordered from the chamber on Tuesday after repeatedly protesting that his party’s bid for a referendum on EU membership was not selected for debate and vote.

At Prime Minister’s question time, Gordon Brown taunted: “Welcome back. I hope this time you can stay long enough to hear the answers.”

Heathrow activists reach for the skies
(Wednesday 27 February 2008)

by DANIEL COYSH

ANTI-HEATHROW expansion activists confounded Westminster security on Wednesday with a dramatic rooftop protest at the Houses of Parliament.

Five members of campaign group Plane Stupid unfurled two huge banners, one reading “No Third Runway” and the other – in a reference to the cosy relationship between airport operator BAA and new Labour – “BAA HQ.”

Plane Stupid said that they gained access to Parliament as visitors, walked through the building, got into a lift and then simply climbed onto the roof.

The daring demo took place on the final day of the Brown government’s “sham consultation” on expanding Heathrow airport.

Protesters charged that “the democratic process has been corrupted” and that the aviation industry “has taken full advantage of a weak Prime Minister to get the Heathrow consultation fixed.”

They made paper aeroplanes out of confidential Whitehall documents obtained under the Freedom of Information Act, which they glided into the MPs’ car park below.

Speaking from the rooftop, activist Richard George said: “We’ve come to this symbolic home of democracy to make clear that the consultation process of the third runway at Heathrow has, from the beginning, been a sham.

“These Department for Transport documents prove that the British Airports Authority wrote sections of the consultation and that there has been a BAA official within the consultation committee pushing forward their agenda at the expense of the 70 per cent of Londoners who don’t want the runaway.”

He stressed: “We’re taking direct action as a last resort because we don’t believe that the consultation has been a democratic process.

“This is the beginning of a campaign of direct action that will not cease until we feel we’re being listened to and until we’re satisfied that it’s Londoners’ views, rather than BAA, that the government is paying attention to.”

Hayes and Harlington Labour MP John McDonnell – who has led local protests against the runway plans and whose constituency contains Heathrow – warned that “direct action is an inevitable consequence of government refusing to listen to communities under threat and to the threat to our planet from climate change.”

He revealed that “no minister has visited my constituency to meet the people who will lose their homes and communities as a result of the proposed third runway – although Transport Secretary Ruth Kelly visited Heathrow to meet aviation businesses.”