How co-operatives can be at the heart of economic and business policy

It may not have been made the Leaders’ Debate or hit the front page headlines, but the 2010 General Election did help to put co-operatives and mutuals on...

It may not have been made the Leaders’ Debate or hit the front page headlines, but the 2010 General Election did help to put co-operatives and mutuals on the political map in a genuinely significant way.

All the political parties included substantive commitments to co-operatives, mutuals and social enterprises — more so than for any election in recent decades. The most creative and fertile, not surprisingly, was the Co-operative Party itself, but there was an openness and interest across all the major parties too.

For the co-operative movement, this made it easier to have an influence. Co-operatives UK, as the voice of the sector, was able to win references in party manifestos that made it into the Coalition Government’s programme of commitments — including a commitment to promoting diversity of ownership models in the financial services market and action to promote co-operative models of governance in sport.

Three years on, the lesson is that there is a big gap between election time rhetoric and government implementation. When it came to looking at banking for example, the idea of ‘diversity’ was written out of the terms of reference for the review led by competition economist John Vickers. As a result, there was little recognition that different models of ownership could drive different behaviours.

The commitment to introduce a right for public sector staff to form into worker co-operatives was muddled up with models of privatisation and an ‘anything goes’ mentality in terms of what counts as a co-operative or mutual model. The Government machine does not understand co-operative business and the instincts of civil servants, time and again, are to get it badly wrong. But conversely, where Ministers have understood what is needed, there have been welcome steps to try and open up to co-operative models.

In energy, after concerted lobbying led by Co-operatives UK, Co-operative Group, our members and partners, Ministers ensured that renewable energy co-ops are recognised in the national policy framework.

In welfare, credit unions have been welcomed as long-term ways to support people in need. In business, new initiatives have come forward to support employee ownership — and to consider mutual models for the post office network. From the Treasury, we now have the prospect of a consolidation act for co-operatives on the statute book before the election.

The 2015 election may be one of the most divisive for years. The economy is likely to remain on the critical list. The nations of the UK are pulling in different directions, with the 2014 referendum due on Scottish Independence. The mainstream political parties are less able than before to count on voter loyalty, with populists such as the UK Independence Party waiting in the wings.

In this context, the worst outcome perhaps would be a re-disappearance of co-operative options in the manifestos of the political parties. The sector would be left with a national policy making framework that ignores the social economy, with our work being one of playing catch-up as new policies come forward that assume that all business is shareholder-owned and organised for financial return alone.

What we want instead is to be at the heart of economic and business policy.  This means building a recognition of the key role that co-operation can play in charting a new, sustainable path to recovery for the UK. There are a set of interlocking policies that could help to achieve this.

1. Co-operation is of vital importance in today’s economy and, as such, merits no less consideration and policy attention as the field of competition.  To that end, I would argue that the government ought to have a national Co-operation Policy as a core component of economic and business strategy and as a complement to its Competition Policy.

2. It is time to recognise the co-operative option across all sectors of the economy. Rather than design systems and support for shareholder business alone, regulators ought to be required to consider all business models of ownership when formulating actions and considering markets that they oversee.

3. Employment. In terms of job creation, particularly for younger people, we see space for a £1 billion programme of investment in the wider ‘Social Economy’, including co-operatives. Portugal has a model that shows what is possible through co-operative models for young people and Co-operatives UK is collaborating as a partner in an emerging UK Social Economy Alliance to press the case for a UK approach to this.

4. In terms of greening the economy, the success story of renewable energy co-operatives in Germany — and over a longer period, Denmark — points to the potential of a national Community Energy strategy, joining up UK and devolved nation actions, to make co-operative ownership of renewable energy a dynamic contributor at scale to a low-carbon economy.

5. For business development, we need a systematic framework of national support for co-operative and mutual enterprise — drawing on the model of the Co-operative Enterprise Hub, but with backing from government and economic agencies, such as exists in Scotland in the form of Co-operative Development Scotland and in Wales, with the Wales Co-operative Centre. It is welcome that Chukka Umunna, for Labour, made a commitment to explore this when speaking at Co-operative Congress in Cardiff in June.

These are five steps that could lift co-operative action into the core of the manifestos for the 2015 election. There will be more, much more that can be done and Co-operatives UK will be working with our members to bring together co-operative and mutual proposals for action. We will take the sector’s proposals out in an open way to potential allies, including thought leaders, business networks, the media and political parties.

But for now, as the real manifestos are being developed if only in draft, it is time for the sector to tell our story better than ever.

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