A larger role needs to be provided for mutual businesses in the UK, according to a report commissioned by the Labour Party.
The Hunt Review, authored by Peter Hunt, chief executive of mutual think-tank Mutuo, outlines 37 policy recommendations to aid the growth of mutuals.
Commissioned by Labour leader Ed Miliband and shadow chancellor Ed Balls, the report said a stronger role for financial mutuals is needed to increase diversity in the sector.
One of the key proposals calls for a new Commission on Mutual Banking to establish a significant mutual banking sector in the UK. Such a commission would define the role of customer-owned banking; propose a model for building societies and credit unions to provide full retail services; look at consolidation/restructure of the sector; and look at ways for organisations to co-operate in areas such as shared services.
Government should also remove incentives for demutualisation by allowing mutuals to adopt legally binding protection. It also said businesses, such as the Co-operative Bank, should not be allowed to mislead the public by asking for legislation to protect the ‘co-operative’ name. The law is clear on the use of the terms ‘building societies’ and ‘friendly societies’, according to the report, but ambiguous around the use of ‘co-operative’.
A Mutual Infrastructure Investment Fund has also been proposed as a public savings bond to invest in national infrastructure projects.
Employee ownership also needs a boost, says the report, otherwise without government intervention, the sector will remain small. It should be promoted as a means of spreading wealth and rewarding work, plus existing tax reliefs should be improved. It also proposes that a new savings and investment account – a “working life ownership account” – should be created to allow the proceeds of employee share ownership to be ported between employments.
Peter Hunt said: “All of our major economic competitors, from the US through the European Union to the Far East, make better use of mutually owned business to drive economic growth and spread wealth.
“We know that greater diversity of business types will help to protect our economy from damaging shocks such as the financial crisis, yet the UK still remains fixated on a plc mono-culture.
“Where business operates in the interests of customers and employees, it deserves the support of politicians. There is a positive role for the next government in ensuring mutuals can play their full part in our economy and society. My report provides a roadmap for helping to make this a reality.”
• Read the full report online.