Planning a level playing field for co-ops

Co-ops are too often neglected by government and need regulatory reform, writes Jonathan Reynolds MP

We in the co-operative movement know just what a force for good our sector can be for addressing so many of the challenges we face, from rising inequality to the productivity crisis across the UK. 

But we know all too well the challenges co-operatives themselves face, and what a hindrance this can be to the continued growth of our movement and the wider benefits it could bring as a result. 

For too long, co-operatives have been forced to survive on an uneven playing field, operating under a regulatory framework that puts them at a distinct disadvantage compared to company law. 

In consideration by government they are too often neglected, not given the proper support and recognition that other business forms achieve, and unable to fulfil our full potential as a movement. We saw this in the immediate aftermath of the outbreak of the Covid-19 pandemic, for instance, when the Corporate Insolvency and Governance Bill brought forward by the government made the necessary changes for governance requirements as a result of the pandemic restrictions, such as permitting online annual general meetings in a time of social distancing. 

But in initial drafts, the legislation failed to even recognise co-operatives within this and extend similar permissions to organisations in our movement. It was only through the work of Co-operative Party representatives in Parliament that this matter was addressed and co-operatives rightly afforded the same privileges. 

But it should not have required such an intervention, nor should co-operatives be a last thought in these circumstances. How to cultivate the benefits our movement brings should be at the very forefront of this government’s thinking.

Ultimately, this may come down to the very nature of the government machinery and where co-operatives find themselves within it. 

Despite governance and regulation of other business forms falling within the Department for Business, Energy and Industrial Strategy, responsibility for co-operatives lies with the Treasury. 

It’s no wonder, then, that too often the needs and interests of our movement fall between the cracks of government departmental responsibility. 

I want to ensure co-operatives are at the very centre of our thinking about how we build a more inclusive, equitable economy – and I would look to move responsibility for co-operatives from the Treasury to BEIS as one way of doing just that. 

In doing so, we can begin to level the playing field for our movement, ensuring full consideration is given to the needs of co-operatives and the conditions they need to thrive. 

And as a Co-operative secretary of state for business and industrial strategy in a Labour government, under my responsibility I would help ensure our movement has everything it needs to fulfil its growth potential, and continue delivering in the interests of workers, consumers, local communities, the environment and our economy.