MPs highlight co-operative contribution to British economy

Labour/Co-op MPs led a Westmindster Hall debate into the economic contribution of co-operative enterprises during Co-operatives Fortnight.

Throughout the debate MPs referred to co-operatives as being a trusted enterprise model, particularly in times of crisis, which was also the theme of this year's International Co-operatives Day.

Chris Evans, Labour/Co-op MP for Islwyn who secured the debate, argued that co-operatives enjoyed a higher degree of trust, having succeeded to show their resilience throughout the economic crisis.

“Unlike almost every other profession and institution in the UK, co-operatives still have one thing that the rest do not seem to have: that simple word ‘trust’,” he said.

Mr Evans said this year’s Co-operative Fortnight was to focus on helping people find co-operatives they love. He praised co-operatives for the positive impact on the local economy and gave the example of Islwyn community credit union, which lent £1 million to local families in his constituency.

“The credit union is an example of the impact that co-operative organisations can have on a local economy, which is why I am pleased the co-operative sector has outperformed the rest of the UK economy since the financial crisis began.

“With every pound spent in a co-operative generating an additional 40p for the local economy, the success of co-operatives can only be a good thing for the communities that we represent.”

Co-operatives can also drive sustainable development, according to Labour/Co-op MP for Corby, Andy Sawford. “The co-operative movement in the UK has been a leading force for sustainability,” he said referring to Co-operative UK’s 2013 report on the co-operative economy.

“The UK is ranked 15th in global GDP, but the UK co-operative economy is the eighth largest globally,” commented Mr Sawford. He also praised the movement for staff volunteering, mentioning that the staff time donated by Co-operatives UK's employees each year is worth £1.7 million.

Co-operatives have an important contribution to the economy and should be protected by the Government, also argued Rochdale’s MP, Simon Danczuk. He referred to the Government’s initiative to remove “co-operative” from the list of sensitive words, saying that this could hurt all UK co-operatives.

A solution to the housing crisis

Chris Evans encouraged the Government to promote co-operatives and mutuals across various sectors, including energy and housing. Although throughout Europe ten per cent of people live in housing co-ops, the figure for the UK is only 0.6 per cent, argued Mr Evans.

MPs have also raised concerns over the ‘Bedroom Tax’. Tom Greatrex, Labour/Co-op MP for Rutherglen and Hamilton West, said the tax would have a considerable impact on West Whitlawburn Housing Co-operative, where 67 per cent of tenants are on housing benefit.

“The policy will have a significant impact on the housing co-operative as a result of rent arrears. The co-operative does not want to evict its members — nobody wants that — but the financial effects of the policy could have a significant impact on what it is trying to do,” commented Mr Greatrex.

Banking

Referring to the current situation of the Co-operative Bank, Conservative MP for Warrington South, David Mowat, said the taking over of Britannia had been problematic for the Co-operative Group. He also asked whether the fact that the co-op movement chose not to bail the Bank could undermine trust.

In response, Jonathan Reynolds, Labour/Co-op MP for Stalybridge and Hyde, warned that the negative publicity could hurt the Co-operative Group. Andy Sawford also said that terms such as “collapse” are not helpful in assuring savers of the bank’s future.

“We ought to recognise that, unlike other banks and financial institutions, the Co-operative Bank has not sought a bail-out from the Government but has righted itself, and we all should support it in what I hope is a sustainable future,” he said.

Catherine McKinnell, Labour MP for Newcastle upon Tyne North, added: “Clearly, the Co-operative Bank is an important part of the Co-operative Group. I was pleased to see last month that the group has committed to strengthening the bank’s position, including through a commitment to inject capital.”

Throughout the debate MPs also mentioned payday loans. “Something has to change. Many of us believe that payday lending in this country is out of control,” said Mr Reynolds. 

A keen campaigner against payday loans, Stella Creasy said credit unions help people not just by giving loans, but also by giving debt advice. The Labour/Co-op MP for Walthamstow said credit unions offered complex services by placing the emphasis on members, not profit.