Labour Party trouble with the Co-operatives

In “Labour Believes in Britain” the Labour Party says that since its foundation “the Party has been solidly based on our great Trade Union and Cooperative Movements.”

While the Labour Party was in opposition and had a free hand to defend the claims of the Co-operators in such matters as taxation, and to give general support to wage increases, this partnership worked fairly smoothly. Now they are in power rifts are appearing. On the one hand, the Government is antagonising trade union members by the policy of wage-freezing and refusal to allow wages to keep up with the cost of living; and on the other, trouble is brewing with the Co-operative societies on several issues.

First the Labour Government upset the Cooperative Society leaders by the threat to nationalise the Co-operative Insurance Society along with the rest of the insurance industry.

Reynolds News, the Co-operative Sunday paper, in an editorial (30.10.49) had the following:—

“We think it is neither good Socialism nor good sense to absorb the Co-operative system in a State scheme, as Labour proposes to do. A strong case can be made for leaving the Co-operative and State systems to function side by side, to the benefit of the community.”

Of course the Co-operative Movement is no more concerned with Socialism than is the Labour Party and what they are really troubled about is that if the Co-operative Insurance Society is nationalised it would be a bad stroke of business for the Co-operative Movement. A writer in Co-operative News (20th October, quoted in Manchester Guardian, 21.10.49) dealing with this aspect had no scruples about admitting this. He wrote: —“ Our own ‘private’ enterprise in this sphere of investment and activity has been a good money-maker.”

The same writer in the Co-operative News went on to doubt whether it would even be worth while to try to get special exemption from nationalisation, because the Government would be bound to lay down the condition that if the Co-operative Insurance Society remained outside nationalisation it would be on the basis “that all Co-operative insurance profits will go, after administrative and collecting expenses are paid, back to the insured persons.”

Like the ordinary capitalist industrialist and trader, what the Co-operatives are concerned with is profits.

The second row between the Labour Party and the Co-operatives started with a speech by a Labour Peer, Lord Shepherd, that the Government might in certain circumstances set up State retail shops—a threat to the Co-operatives as well as to private traders. Mr. Strachey hastened to soothe the Co-operatives’ feelings but the harm was done. According to the Co-operative News the threat of State shops had caused “consternation in high-up Co-operative circles” (Manchester Guardian, 14.10.49).

Not unnaturally, the Liberals and Tories have hastened to intervene and assure the Co-operatives that they, and not the Labour Party are their real friends. Lord Woolton (Sunday Express, 30.10.49) assured them that they would be safer under Tory Government; while a prominent Liberal, Mr. Arthur Seldon, writing in Co-operative News (27.10.49) implored his readers to desert the Labour Party for Liberalism.

But while the Co-operatives resent those parts of Labour Government Policy that cut across their profit-making activities in the world of capitalist trade and industry, they do not at all mind the Government’s attempt to keep down wages. On the contrary they have given it a warm welcome. The following appeared in the Daily Express (4.11.49): —

“More than a thousand Co-operative societies were urged yesterday by their National Wages Board to resist pressure for more pay. The Board accused some union organisers and branch officials of using tactics ‘which do not square with the promise of restraint.’”

Covering the same ground the Co-operative Reynolds News (6.11.49) under the heading “Wage Tactics: A Warning,” stated that the National Cooperative Wages Board had issued its warning because of “Local trade union pressure on Co-operative Societies, especially in the Central Midlands, to pay more than agreed national rates of pay.”

The warning was that this practice might cause the negotiating machinery to disintegrate.

The whole of this Labour Party — Trade Union — Co-operative bickering is a row about the effects of the capitalist system, not about its abolition and replacement by Socialism. The trade unions, if they are to survive, must defend the workers against the employers, including the Co-operative employers, and the State as the employer in the nationalised industries. They must also oppose the efforts of the Labour Government to solve capitalism’s problems by wage-freezing. The Co-operatives as capitalist concerns have the same interest as other capitalists in striking a good bargain with the Government if their concerns are nationalised, and in resisting trade union wage demands.

The dispute between the Co-operatives and the Labour Party about whether Socialism requires nationalised insurance or Co-operative insurance betrays the non-Socialist outlook of both sides. What insurance exists for is to protect the insured against some evil consequences that arise out of capitalism, that and nothing else. The idea that insurance will be needed under Socialism is ludicrous, an idea that could only be held by those whose talk about Socialism covers a neglect ever to think what it really means.
H.