MPs debate on co-ops and mutuals to mark Co-op Fortnight

Members from all parties praised the contribution of the sector to communities and to the economy

MPs discussed the contribution of co-ops and mutuals to the UK economy yesterday, to mark Co-op Fortnight.

And they passed a motion brought by Labour Co-op MP Gareth Thomas: “That this House welcomes the contribution of co-operative and mutual businesses to the UK economy; notes that they provide substantial jobs in Britain, generate significant tax revenues and involve consumers and employees in decision making; and calls on the Government to review what further steps it can take to help grow that sector.”

This included a call for a more favourable financial and regulatory climate for credit unions and start-ups.

In response, Labour/Co-op MP Barry Sheerman said: “Co-ops are, in fact, dangerous. They undermine the existing order, and empower people to take charge of their own lives. They are dangerous, and they should be.”

Mr Thomas said: “I have always believed that co-ops and mutuals are the future: that they spread wealth and power more fairly, that they strengthen British-owned business, that they provide competition and choice for consumers in a range of critical markets, that they create diversity and enterprise, that they take a long-term view, and that they are a counter to the short-termist, riskier business models loved by City editors.”

In response, MPs made a number of supportive remarks about various sectors of the movement, including Labour MP Chris Ogmore highlighting the building society as a high street “mainstay” while conventional banks close branches. Labour’s Kerry East pointed to the work of agricultural co-ops, and said she regretted that “countries such as the Netherlands and France have far more of them than we currently have in the UK”. And Labour Co-op MP Steven Doughty pointed to the recent launch of Drive, a taxi co-op in Cardiff.

Labour/Co-op MP Adrian Burley said it was harder for start-up co-ops to access finance, despite the model being more resilient that conventional businesses, and called for reform. Mr Thomas agreed but also highlighted the work of development organisations like the Hive and Stir to Action.

There was also a call for more favourable planning rules for community land trusts, from Labour / Co-op MP David Drew, who said they can provide more affordable housing.

Support from across the floor of the House came from Conservative MP Steve Baker, who said: “It is pretty obvious that, in so many countries around the world, there is a crisis of political economy and a lack of faith not only in the institutions of government but in the institutions of market economy.”

He said there was a need to recapture some of the radicalism of the co-op movement. “It is about free individuals in society standing up not only for themselves but against entrenched interests and entrenched power better to serve their families and their communities,” he added, and said that, as a free-market Conservative, he had “something to learn from the traditions of the left”.

Mr Baker said the Tories under Thatcher had “never got as far as embracing mutuality”, adding: “For too long, we have been afraid of some of these ideas of the left, and a more communitarian and voluntarist Conservative Party should be embracing this idea of equality and market participation, not exclusively but as an important component of our society.​”

He said he regretted the 2010 legislation on co-ops by the coalition had only been a “tidying up exercise”, and urged his government to deliver “a meaningful bill that brings the legislation up to date”.

Fellow Conservative Jeffrey Lefroy also paid tribute to the movement, noting the resilience of co-ops around the world, including Swiss retailers Migros and Coop, Danish dairy co-op Arla, and Netherlands’ Rabobank.

MPs also highlighted efforts to deliver support for co-ops in Wales, with Mr Doughty pointing to the new £3m round of funding for Social Business Wales; in various cities, Labour/Co-op MP Gareth Snell praising the Co-operative Councils Innovation Network; and his colleague Luke Pollard detailing community wealth building efforts in Plymouth, including the development of a regional mutual bank.

Labour Co-op MP Jim McMahon pointing to last week’s launch of Co-op Party manifesto for Northern Ireland – a move welcomed by the DUP’s Jim Shannon, who praised the work of co-ops and credit unions in the country.

And the SNP’s Brendan O’Hara said his party was committed to supporting the movement, adding: “in the last five years, the number of employee-owned companies operating in Scotland has more than trebled”.

Labour Co-op MP Anna Turley called for more of this support for the sector, noting the Communities in Charge campaign by Plunkett Foundation, Co-operatives UK and Locality to put post-Brexit development funds into community control.

In response to the debate, economic secretary to the Treasury John Glen said the government is “committed to ensuring that capital requirements are implemented proportionately in order to support smaller lenders, such as building societies”.

He also announced the 15 credit unions selected for a two-year pilot of a new prize-linked savings scheme – East Sussex, Lewisham Plus, London Capital, Clockwise in Leicester, Nottingham, 1st Alliance, Merthyr Tydfil Borough, Riverside in Liverpool, South Manchester, Central Liverpool, Bradford District, Westcountry in Portishead, Commsave, Police, and Plane Savers.

The government is also conducting a comprehensive review of social investment tax relief to better understand its impact on access to finance for social enterprises.

And, after a meeting with the mutuals sector hosted by Co-operatives UK and Nationwide, Mr Glen said Treasury officials will host a mutuals workshop with Co-operatives UK in July to investigate the barriers faced by mutuals.