UK co-operative businesses will find it easier to get more investment whilst retaining their democratic structures, thanks to legislation passed today (16 June).
The Co-operatives, Mutuals and Friendly Societies Bill – introduced initially as a private members Bill by Sir Mark Hendrick (Labour/Co-op MP for Preston) and supported by Labour & Coop peer Lord Kennedy – has passed its final stages in Parliament, changing the law on how co-operatives operate in the UK.
It addresses problems with the types of share capital issued by co-operatives; makes provision about the taxation of mutual insurers and friendly societies which issue deferred shares; permits the capital surplus of co-ops, mutuals and friendly societies to be non-distributable; and amends the Friendly Societies Act 1992.
“This is a first step in the co-operative agenda for the next government,” said Sir Mark. “It’s important because what my biill does is stop demutualisation of co-operatives, which has been a big problem in the past in terms of maintaining assets. There’s much more to do and the co-operative movement is very keen to use this as a basis for a co-operative agenda for the Labour government after the next general election.
“I’m really pleased that it’s gone through, and I’m very optimistic the next Labour government will drive through not just this measure, but many of the other measures that the Co-operative Party wants.”
Co-op Party general secretary, Joe Fortune, added: “This piece of legislation is going to be an important step forward for the way co-operatives operate in the UK. Our movement and Party has a rich history of campaigning to help grow our sector and make sure current co-operatives have the right investment to flourish for generations to come. As a Party, we believe we must double the size of the co-operative sector.”
The news comes on the same day that Andrew Griffith MP (financial secretary to the Treasury) announced a review of the Co-operative and Community Benefit Societies Act 2014 and Friendly Societies Act 1992, to be conducted by the Law Commission this autumn.
Griffith was speaking in a recorded message played at the opening day of the 152nd UK Co-operative Congress, hosted by Co-operatives UK in Manchester. He added that the review would be “the most comprehensive modernisation of the co-operative sector for a generation, [and] will develop a more modern and supportive business environment which sets co-operatives and friendly societies up for, I hope, another 152 years of growth.”