The Co-operative and Community Benefit Societies and Credit Unions Bill was introduced into the Lords by Labour and Co-operative peer Lord Tomlinson following its passage through the House of Commons last month.
The Bill will provide enormous benefits for the co-operative sector by reforming the regulations that apply to co-operatives, community benefit societies and credit unions. It complements the review of Industrial and Provident Society legislation undertaken by Treasury last year.
Speaking in the debate, Lord Tomlinson said: “Today we are at the end of a period of decline as regards the significance of co-operation. We are now in an era of resurgence — a renaissance — of co-operation and mutuality.
“As the co-operative and mutual sector is enjoying a resurgence, the Bill, if passed, will help the modernisation and rebranding of such societies, while simultaneously making an improvement in corporate governance.”
However, Tory Peer Baroness Noakes strongly criticised the mutual sector: “Noble Lords may know that I have often expressed scepticism in your Lordships’ House about mutuality in general.
“I have concerns about a mutual model in which ownership pressures are not sharp-edged. I can see that mutuals are popular and that they reach parts of society that financial services organisations generally do not, but I have never found any evidence that they are the most efficient way to deliver financial, or indeed any other, services.”
She added: “If we look at building societies, we see that there are two big stories from the last century. The first, to which the noble Lord, Lord Tomlinson, referred, is the demutualisation of the larger building societies, which was largely followed by their disappearance into larger banking groups. I do not regard that as an act of vandalism. I believe that there were sound economic reasons for what happened.”
General Secretary of the Co-operative Party Michael Stephenson told the News he was dismayed by the Tory peer’s approach.
He said: “Labour and the Co-operative Party have put in place massive reforms for the Co-operative Movement. It is very disturbing that a senior Tory is fiercely against mutuals and their values.”