Co-operatives and Mutual Societies

Debate between Angela Eagle and Steve Baker

Tuesday 14th December 2021 Westminster Hall

[Dame Angela Eagle (in the Chair)]

Before we begin, I remind Members that they are expected to wear face coverings when they are not speaking in the debate. This is in line with current Government and House of Commons Commission guidance. I remind Members that they are asked by the House to have a covid lateral flow test twice a week if coming on to the parliamentary estate. This can be done either at the testing centre in the House or at home. Colleagues may wish to know that I have just had a negative one, so I think I, at least, am safe for now. Please also give each other and members of staff space when seated and when entering and leaving the room.

[Mr Steve Baker (Wycombe) (Con)]

I beg to move,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

I am delighted to serve with you in the Chair, Dame Angela, and I am very grateful to everybody who has attended. I am slightly conscious that today’s other business might have distracted some of my Conservative colleagues who signed up to the application. I lament the fact that they are not here, but there we are—I cannot think what else is going on at the moment. I am very grateful to Co-operatives UK for inspiring this debate and for providing an excellent brief, on which I will rely closely.

A free society—one based on a market economy—really must have within it a place for co-operatives, and the Conservative party might not always have embraced that idea as tightly as I might have liked. Given the length of time for which we have been in power, and given how long we will have been in power by the next general election, I hope that the Conservative party can champion and not merely embrace co-operatives as a really important part of a free society. Co-operatives can be harnessed as tools to expand opportunity, wealth, liberty, pride and aspiration more fairly in the UK, both geographically and socially. They are a powerful tool for funding and implementing the UK’s new net zero strategy.

The co-operative economy is diverse, resilient and growing. There are now more than 7,000 independent co-operative businesses in the UK, with a combined annual turnover of almost £40 billion and more than 250,000 employees. They trade in sectors as diverse as agriculture, renewable energy, retrofitting, the creative industries, manufacturing, distribution, wholesale, retail and finance. In 2020, the turnover of the co-operative economy grew by £1.1 billion, and twice as many co-operatives were created as dissolved. Most co-operatives in the UK are consumer-owned, but in recent years we have seen a marked growth in community ownership, worker co-operatives and freelancer co-operatives. Many of the UK’s largest co-operatives comprise other businesses, such as farmers co-operatives.

By international comparison, though, the UK co-operative economy is small and growing slowly. Less than 1% of businesses in the UK are co-operatives. Germany’s co-operative economy is four times bigger than the UK’s, and France’s is six times larger. That might well derive from history, but I say to the Government that now is a moment when we can choose positively to take a path that makes it more possible for co-operatives in the UK to grow. The UK’s co-operative start-up rate is also comparatively low. In recent years, South Koreans have created 12 times more co-operatives per head of population than we in the UK have. Perhaps the co-operative model is underused and is something of a best-kept secret in our society and economy.

Co-operatives are great vehicles for creating and sustaining decent, rewarding and empowering livelihoods. For example, after five years of trading, the average worker co-operative in the UK supports six times more livelihoods and is almost twice as likely still to be trading as start-ups generally. According to a multi-country study, although they are currently far fewer in number than businesses generally, worker co-operatives are on average larger and employ more people. There are examples of co-operative entrepreneurship, for example the taxi drivers in Cardiff who clubbed together to set up their taxi-hailing co-operative, and of participation in existing freelancer co-operatives, such as the new co-operative mutual aid platform, We-Guild, or the creatives’ co-operative Chapel Street Studio.

--- Later in debate ---

[Mr Baker]

I am grateful to the hon. Gentleman for his intervention. I hope to make a few remarks about mutuals, but I am focusing first on co-operatives. I have been involved in the inquiry into LV= by the all-party parliamentary group for mutuals. LV= made quite a compelling case, but the point is that, as he said, it is up to the members what they do. In a free society, we make progress through trial and error. It might well be that that members have made a mistake in rejecting the bid, but it is their right to do so; it is their right to choose.

I am a huge fan of mutuals, because I can see that they are bound to create a set of incentives that support the people whom the business serves. I remember in my youth being very disappointed that so much carpetbagging was going on, with people taking £500 in exchange for demutualising. I was very disappointed at the time, and even as a teenager I could see that it was not a good idea. In the case of LV=, I fear that things are not going where they should. I very much hope that my hon. Friend the Minister will ensure there is a good quality inquiry into what is going on, and into how regulation can better support people’s desire to support the mutual spirit in the future. I think he would agree that we cannot afford to be romantic and exempt co-operatives and mutuals from the realities of commercial life, or the exigencies of things such as competition law.

I turn to performance and efficacy. The principle of mutual purpose and democratic governance is found in all co-operatives, and it has significant advantages. It is a proven way for people with a shared interest to collaborate effectively, achieving things together that they could not on their own. That is a great way to expand liberty.

Liberty is something that should be exercised in community. One of my favourite scholars said:

“Society is cooperation; it is community in action.”

We should remember that entrepreneurship is a great search to help other people; that is what entrepreneurs seek to do. If people make a profit justly, without breaking the rules or exploiting others, that is a good thing. It shows that those people have served others, according to their assessment of what has been produced. I believe that that combination of mutual interest and service to others through a market means that co-operatives should be a crucial part of our society.

I am conscious of time, so I will wrap up. The Co-operatives UK brief makes a number of suggestions to the Government, including that there could be more co-operatives, and some particular policy suggestions. There are three themes: to have better tailored business support and enterprise finance for existing co-operatives, co-operative entrepreneurs and the conversion of existing businesses to become co-operatives; to have legislative and non-legislative action to provide a more enabling corporate framework, through law, regulation and processes; and to have tax support for investment in co-operatives and co-operative development. I will not go through the full brief, but Co-operatives UK intends to publish it after the debate.

I appreciate this opportunity to hear from Members from all parts of the House about co-operatives. We can all enthuse about co-operatives, even as we remain, as I am sure the Treasury will do, robustly pragmatic rather than romantic. As the Conservative party softens and become more inclusive and society minded in the 21st century, we ought to say that co-operatives and mutual societies are an important part of our society that should be fostered in everyone’s interests, particularly as we come back from coronavirus. We need to build up the mutual relations of interdependence on which we all rely.

[Dame Angela Eagle (in the Chair)]

It is my intention to call the Front-Bench speakers from 10.30 am, so you can do the maths yourselves in order for everybody to get the chance to speak.

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[Mr Baker]

I have immensely enjoyed this debate and everybody’s contributions to it. It is an honour to be the person who happened to have their name on the top of the application, so it is with some humility that I speak last. I particularly want to say how much I enjoyed the remarks of my hon. Friend—and on this issue, he certainly is my hon. Friend—the Member for Plymouth, Sutton and Devonport (Luke Pollard). The sheer enthusiasm he has for the contribution of co-operatives to his community said more than any number of statistics that any of us might have cited. That is the reality of co-operatives and mutuals in our society. They are deeply loved institutions, precisely because their members feel part of them: “It is my mutual. It is my co-operative. I am part of it.” I only hope that all of us might aspire to the degree of earnest and heartfelt support for those institutions that the hon. Gentleman has put on record, and I hope he will not mind me embarrassing him by expressing such gushing support.

I am very grateful to my hon. Friend the Minister for what he has said. He has been very clear that the Government want to support mutuals and co-operatives. I will write to him later today with the Co-operatives UK brief, which is quite extensive, and will specifically draw its recommendations to his attention, in the hope that he might be able to take up some that do not conflict with his justified pragmatism and his desire not to be too romantic. I know that my hon. Friend would not want to be accused of an excess of romanticism.

I am extremely grateful for this opportunity to sum up the debate, and to all hon. Members who have spoken. On a day like today, it is a treat to have spoken in unity rather than in division.

[Dame Angela Eagle (in the Chair)]

I think romance is always required in politics.

Question put and agreed to.

Resolved,

That this House has considered the contribution of co-operatives and mutual societies to the economy and public life.

Coronavirus: Job-Support Schemes

Debate between Angela Eagle and Steve Baker

Tuesday 7th July 2020 Commons Chamber

[Ms Eagle]

I absolutely agree. This crisis has forced us to look at how our labour market works, and we need to come back to that very strongly indeed.



Tomorrow, I want to hear that the Chancellor is doing something to help the freelancers who power much of our cultural industry but who have thus far been excluded from the help available. I want to see him announce a strategic sectoral approach to job retention to ensure that the economy thrives. The OECD estimates that the UK could suffer the worst covid-19 related damage among the advanced economies, with a decline of 11% in national income and UK unemployment rising to 9% this year. Despite the labour market having been sheltered from a complete meltdown by the furlough scheme, there are ominous signs of a huge strain like a dam waiting to burst. The recent announcement of many thousands of job losses in retail, aviation and leisure could be just the tip of the iceberg if the Chancellor does not take decisive action.

The Government must now switch quickly to a more strategic and tailored response that will enable stabilisation and economic recovery. Certain sectors will continue to be affected because of social distancing rules, and they must be helped. Local authorities and schools, for whom the Chancellor promised he would do “whatever it takes” to fight the virus, should have their costs fully reimbursed. To date, they have received back only a third of what they have spent.

The Chancellor exhorting people to spend, spend, spend, as he did at the weekend, risks entrenching the old debt-fuelled consumer economy in place and squandering the chance to lay the foundations of greener, fairer, more sustainable future prosperity. The Prime Minister blaming everyone but himself, exhorting us to “build, build, build” and trumpeting a Roosevelt-like new deal while promising to spend 0.2% of UK GDP, whereas President Roosevelt spent 40% of US GDP, would be a farcical response to our predicament if we were not in such a perilous situation.

[Mr Baker]

I remind the hon. Lady that she stood at the Dispatch Box 10 years ago accusing us of being Hooverite in our liberalism. Although that was historically questionable, it is where she was 10 years ago. Surely she must feel that the references to Roosevelt are an improvement.

[Ms Eagle]

Clearly somebody in the Conservative party has moved on, but when we look at the difference between 0.2% of national GDP and 40% of national GDP, we can see that a few lessons are yet to be learned.

Coming back to a point made by my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier), the labour market is key. Many vulnerable people in the labour market have been left with nothing as a result of the effects of coronavirus. Many in the labour market have also been put at great risk of contracting the virus, and perhaps have to think about a choice between earning and being ill, which is why we need to look more closely at how our labour market is regulated—and crucially, at the 46% cut to the Health and Safety Executive, which enforces labour market rules. The Prime Minister exhorting us to “build, build, build” is all very well, but it would be a farcical response to our predicament if the country were not in such a perilous position; the comparison is ridiculous. The Chancellor and the Prime Minister need to drop the hype and begin to deliver. Our future economic prosperity depends on it.