John Lewis Solution or Re-Nationalisation

Published by Graham Tomlin for Credit Union Solutions Ltd in Local Government and also in Central Government, Education, Health, Housing

It was interesting to see that Nick Clegg favours a John Lewis solution to the provision of services. By that I assume that he means that users or workers own and control the management and organisation of the services that they consume.

In my opinion that sounds a lot like nationalisation which only us oldies remember fondly.

Back in the day there was only one electricity provider so no need to switch providers. Now we are free to choose between a cartel of six private companies offering 300 or so tariffs. Still no competition between providers since all prices go up and down together like synchronised swimmers or garden fountains.

We used to have building societies that were owned by their customers. Mortgages were given to members on the basis of their ability to repay and therefore the number of repossessions was very small. Gradually most building societies were de- mutualised and sold to banks resulting in mortgages being given to just about anyone. Verification of the proof of earnings became a note from your Mum and as a result more and more repossessions.

I still remember when the Water Board had responsibility for the delivery of water up to your stop cock. Now alas it stops in the street outside but you can buy insurance to cover the inevitability of a failure underneath your footpath.

As with a lot of Liberal Democrat visions they piggy back on the most recent success story and since John Lewis is successful this becomes the ideal solution to whatever the problem is.

Where I do agree with Nick Clegg is the need to consider many more forms of ownership when looking at provision of services. Inevitably PLCs are not the answer because they look to maximise profit and minimise cost thereby producing shoddy services such as was the experience recently of care homes.

John Lewis is a partnership and this model may be appropriate in some circumstances just as a user coop or a worker coop might be. I believe that British Waterways is to become a charity which hopefully will work well for the users of our canals and waterways.

It was certainly shocking to read over the weekend that the Directors of Tesco PLC, our largest food retailer, in advance of telling us of its poor Xmas trading and the consequent decline in its share price, had taken the opportunity to sell their shares and made a killing as a result. This action did not infringe insider dealing rules but how could anyone justify this morally. Tesco staff may well be holding shares as a profit bonus which is now worth much less than before simply because they did not know what their bosses knew.

I think that Apple Directors cannot sell their shares for ten years which seems a much better way of operating rather than allowing them to ditch stock before a slump reduces their value.

The good thing about John Lewis and coops is that the wages of those at the top have a fixed relationship with those at the bottom. Wages are not paid based upon some kind of international comparison like in banks, but based upon the success or failure of the company.

I look forward to Nick Clegg making concrete proposals for using the John Lewis model although deep down I think that this will be, if delivered, a triumph of hope over experience. Perhaps Nick sees 2012, the international year of the co-operative, as the ideal time to launch his John Lewis strategy, personally I think that renationalisation is more likely.   

At least with nationalised companies you could hold the politicians to account.