The overriding paradox is that a democratic and vocational resistance to modernity, defined as the joint sovereignty of financial markets and public administration is the most efficient, competitive and sustainable modern position. The tragedy is that such a reasonable political position is unavailable within the mainstream of European politics, indeed there are those who argue that it would be illegal and an infringement of EU rules concerning competition.

Over a period of 500 years the City has supported deregulation at every turn. The consequences of this are massive. You had fraudulent products – the cause of the crash – debt being repackaged as an asset and then being used as leverage. The assets they held and credit they generated were on a ratio of 50-1. There was no effective regulation of this, no effective oversight. They have been exposed by the bailout. They have refused more than ten years of requests from us [London Citizens UK organisation] and suddenly they agree to meet. I think they are concerned that the political parties will move to a more manufacturing, less financially-based economy.

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This conference has a very weird atmosphere – it’s a different atmosphere. It’s an atmosphere of a superannuated student union. They’ve just stayed in the student union through a lifetime. Until we have the maturity and generosity to have a genuine understanding of New Labour our growth will be stunted. The present criminalisation and demonisation of Blair doesn’t help us get to that place.

I am working with Unite in Salford to set up the Bank of Salford. It is going well. They have consolidated the credit unions, put money in, the city council will put their pay roll through it to stabilise the asset, the government are supporting it with advice and lowering entry requirements to become a bank that can lend to businesses as well as families. It will be bounded within Salford, there will be local residents on the board as well as institutions, but Unite cannot do it on their own. There needs to be a partnership between the Church and labour that can put some constraint on capital without relying on the state. Relational accountability and democratic governance are key to this. That is how the old bones will walk again, by renewing a commitment to the common good in action. It’s a great thing to do.

Cameron made the Hugo Young speech, where he claimed the co-operative movement, building societies, the mutuals, the early trade unions for the Conservatives, and we were completely silent. That's linked to the excessive statism of Brown. We had to reclaim Labour history. It was also a way of talking about capitalism again, and resistance to capitalism. And working [in London Citizens] with low-paid people, most of whom were women, had reminded me of their concern for their parents and their children, and their commitment to work and not wanting to be on welfare.

Unless there is a decentralisation of power, in the financial markets and in politics, then there can be no negotiations that can transform the present system of domination. Domination by the rich of the poor, by the educated of the uneducated, by the City of the country. Perhaps a simpler but more controversial way of putting it is that the German economy, with workers on the boards, regional banks, vocational labour market entry and co-determined pension funds has proved to be more capable of producing goods than ours. Their system is based upon subsidiarity and vocation, the cornerstones of the Christian inheritance. Secular modernity is not working. It is inappropriate for our times. Here’s a new paradox: Modernity is out of date.

And what is going on is that the SPD (Social Democratic Party of Germany) has lost the trust of working class German voters, is overwhelmingly a party of the public sector, social science graduates and ethnic minorities and won barely more than a quarter of the vote. It has moved its concerns from those of the internal governance of the political economy to a political and legal orientation that requires the passing of laws, external regulation and redistribution. It has not seriously defended the internal virtues of its economic system, preferring to stress external factors such a stimulus and taxation. Justice and rights rather than democracy and the good have come to define the position. I am strongly suggesting the party has become liberal rather than socialist and that is the fundamental problem.

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I would argue for the establishment of unitary city parliaments in all our major cities. The entire population of Scotland could fit into North London and all of Wales into South London with something to spare and yet we fret over our national settlement. Of far more importance is the establishment and linking of institutional power for capital and citizens in a renewed framework of democratic cities and counties. That is one meaning of the Labour Commonwealth.

The story of the Northern Counties Building Society is instructive. Established in 1850 in the North East by dispossessed workers who pooled their funds to retrieve a home in the world it grew steadily over the years. It was part of the local economy and society, that most precious civic inheritance, a trusted financial institution. In 1965 it merged with another local institution, the Rock Building Society to become Northern Rock Building Society. It demutualised in 1997 and became Northern Rock, which sponsored Newcastle United and became the fifth biggest lender in the UK market. An institution that was founded by local people for local people and had partnered its region in good times and bad for a hundred and forty seven years, that had weathered four serious depressions and emerged stronger from each could not last through New Labour’s period in Government.

This is why it is vital that Blue Labour’s vision of a democratic self-governing nation that honours and rewards work, restores institutional integrity to the places that people live and supports family life based upon love and mutual sacrifice becomes Labour’s vision. It is also vital that Blue Labour reasserts its internationalism and makes free and democratic trade unions, all over the world, From Beijing to Tehran, from Havana to Halifax a central role of Foreign Policy.

I would suggest that we use 5% of the bailout money to endow the Banks of England, which would be established in the counties and cities of England and would be constrained to lend within the county or city. The principal of the endowment would be in trust to the people of that county or city, in perpetuity so that it could not be liquidated by its members, and the balance of power in its corporate governance will be held by a third being held by the Bank of England, a third by its workforce and a third by the civic institutions of the locality. These newly constituted ‘Banks of England’ are one of the essential feature of Blue Labour statecraft built upon endowment and institution building.

Miliband has acted strategically in leading the changes required in the three areas over which he has control: party organisation, the policy review, and his own leadership. In party terms, there is a far stronger emphasis on leadership development, and a greater role for organisers in strengthening and brokering the relationships necessary to re-establish Labour as a vital political force in people's daily lives. This is a neglected tradition, but the old bones are beginning to walk again. And it is not just an effective ground game: organising aligns campaigning with a better political position.

The condition of this task is training your own people in organising and leadership so that there can be some governance of the poor, by the poor and for the poor, and not simply a governance of them. This is a move from hosting the peace talks to actively seeking the peace. Pursuing it is a matter of necessity to your own flourishing.

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I realised that over a few years through these London Citizens campaigns we’d developed a more radical political economy than the Labour Party. For me, it was catch up, catch up, catch up. I was always a Labour, secular, left-winger and this was all new. One of the big lessons for me was which people would turn up. If the mosque said 50 people, the Catholic church says 50 people, the local black church says 50 people, they turn up. When the trade unions said 50 people, no-one turns up. So suddenly the crisis of secular institutions and their reproduction came to me.