Co-operative and Mutual Businesses

Debate between Barry Sheerman and Stephen Doughty

Thursday 27th June 2019 Commons Chamber

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

It gives me great pleasure to follow that rather enlightened speech by my friend, the hon. Member for Wycombe (Mr Baker). As I said in my earlier intervention, we work together on the FairLife initiative, which shows the children present today that sometimes we work positively across party lines; we do not just disagree over Brexit or other things.

I suppose my admission today is that as a young academic teaching at Swansea University, I got involved in learning about worker co-operatives and wrote an article about them. I got so enthused that I started to set up worker co-operatives. Eventually, someone said to me, “You’re very political and interested in co-operatives; why don’t you join the Co-operative party?”, and I said, “What is the Co-operative party?” The person said to me, “Come down to a Co-operative party meeting at the Elysium buildings”, which were by the railway station in Swansea. It was a pouring wet night—we specialise in those in Swansea—and I got down to this meeting and came out as the secretary. You will understand, Madam Deputy Speaker, how politics works in that sense. I have been a co-operator ever since.

I have also been a bit of a dissonant voice, because I have always called into question the idea of having a single view of co-operation. We all look at Google these days, and when I did I saw this definition of a co-operative:

“A farm, business, or other organization which is owned and run jointly by its members, who share the profits or benefits.”

It is a simple thing, but it is also the most liberating thing I can think of in terms of the politics that I do, because it is absolutely the kind of politics that says, “Politics is not just about general elections, referendums or the big scale; it is about ordinary people deciding that they are going to take control of their own lives and that they are not going to be manipulated.”

I do not want to go too much into the history, but we all know that the industrial revolution pulled people off the rural economy—the farms and the life they knew—and into awful conditions in the factory towns of Britain. They had to shop at the company store: the company not only employed them, but paid them in its own currency so that they could shop only at the company shop. That was called truck. The Truck Acts passed by this House banned the practice of companies having their own currency.

Co-operatives sprung up—one could see at least 50 co-operatives from Castle Hill in Huddersfield. They started as local communities saying, “We are going to be able to buy fresh, good food that isn’t overpriced, and we are going to take control of that by setting up a retail co-operative.” Members will know the old principle: people used to put in a pound and they would have a share, so they were a shareowner in that co-operative. People were then employed to run the co-operative.

I have a criticism of that model. It is a good model, and by the 1950s most people shopped in co-ops. The co-operative retail movement was so powerful that it was the major retailer in our country. Indeed, in 1917, when Lloyd George was Prime Minister and the co-operative shops were not getting their fair share of flour and sugar because the Germans were blockading Britain, people marched down to Westminster Hall and started the Co-operative party. The biggest retail movement in Britain was not getting a fair share. Very soon, the Co-operative party came to an agreement with the Labour party that we would never stand candidates against each other, which is why there is a Labour and Co-operative wing of the labour movement.

That is the history, but let me bring things up to date, because that was an important lesson. People’s lives were in turmoil: the whole social and economic nature of the country changed in the 18th century and into the 19th century. There was radical change, and radical change is now happening again in respect of the assured ways of life. People thought they were going to get a job and probably have it for life, working in the public services or at a big company. In questions this morning there was mention of someone having worked for ICI—Imperial Chemical Industries. I worked for ICI. It is long gone, but many of the people with whom I worked at ICI worked there for life. It was the norm that people joined a company and, although perhaps they would change their job once or twice, by and large the structure of life was stable and secure. That stability and security has largely disappeared for many of the people we represent in this House.

We have to come to terms with things and to change. Human beings are quite good at responding and saying, “This is really difficult; let’s do something to mitigate this and take control of our lives.” What happened during the industrial revolution? Working people set up trade unions to represent them, and housing associations and mutuals—a whole range of things. They set up mutuals and co-ops to make sure that people could have a holiday with their family once a year. They set up mutuals to make sure that people had money for Christmas presents and other big occasions, when they could get their dividend. People set up co-ops for burial, and the Co-op is still today a big player in that sector. They covered holidays, funerals and all those sorts of things. What is the great cause today? It is housing. Young people, and even people on reasonable incomes, cannot get a foothold in the housing market. In the current circumstances, why are we not going back to those mutual and co-operative ideas to meet that need?

All that brings me to the second part of my speech, although I do not want to keep the House’s attention for too long. As life is changing radically, the opportunities are changing. I am a long-term social entrepreneur: since I have been in this business, I have started more than 50 different social enterprises. A lot of social enterprise is about asking people for money, and it is difficult. It is tough. As a member of the court of governors of the London School of Economics, I was befuddled, because every time we hired a fundraiser, they did not even make enough money to pay the wages of the fundraising team. Eventually, we hired a young American woman—I think she was called Sally Blair—who raised tens of millions of pounds. People gave us whole blocks of buildings around the LSC in Holborn. She was the most magnificent fundraiser. I said, “Sally, why is it that you have been so successful? She said, “I am an American. If you’re an English fundraiser, you ask someone for some money, and if they say no, you go and sulk forever. We ask seven times, and put a person on the back burner only after the seventh time.”

As a social entrepreneur and a co-operator, I was in the business of asking people for money for good causes, and it was hard. Then we had the big financial crisis. George Osborne always used to say that the Labour party had caused a worldwide breakdown in modern capitalism. I used to say to him that I wished that we were that powerful. The issue was actually something to do with international banking and the corrupt way that banking had emerged.

The point I want to make is that technology has changed the opportunities for raising money for co-operation. I chair the Westminster Crowdfunding Forum. Social media can achieve immediate results. For example, if someone has an idea for a co-operative, they could raise money worldwide. They could identify a particular need in Yorkshire, in Huddersfield, or even in your own constituency of Doncaster, Madam Deputy Speaker. The technology presents us with an amazing opportunity.

[Stephen Doughty]

I thank my hon. Friend for giving way. I completely agree with him about those challenges of raising money to get new social enterprises and co-operatives off the ground. In that regard, crowdfunding is a way forward, absolutely, but it also needs leadership from Government. Does he welcome what the Welsh Government have done in the past few days in announcing a new £3 million fund for the Social Business Wales New Start initiative to kick-start hundreds of new social enterprises and co-operatives across Wales? It was, in fact, launched at a restaurant called The Clink, which is next to Cardiff prison and is itself a social enterprise. Does he agree that that is exactly what the Government should be doing—kick-starting the co-operative economy in the UK?

[Mr Sheerman]

I was amused by that intervention because, of course, my origins in co-operation are in Wales. It is a delight to hear about that initiative. There is also a Clink in London—in Pentonville I think.

The point that I am trying to make is that there are new opportunities. I got fed up talking about co-operation and how wonderful it was. I worked with John Smith, who was a passionate supporter of co-operatives and who started the Co-operative Commission with an international committee on mutuals. We had lots of debates and we set up the Co-operative Development Agency. The problem now is that the co-operative movement is too conservative these days. It clings to the old model, the basics and the values of which are right, but sometimes, I think, we miss the point.

When I went into Co-op shops, I felt that the conditions for the workers were worse than those in Woolworth’s, Asda or Morrisons, which was wrong. I made myself unpopular when I said, “Why don’t we do what John Lewis does?” John Lewis, as I am sure everyone on the Government Benches know, is a workers’ co-operative; it is owned by the workers. They call them partners, but it is a workers’ co-operative; and it works and it is successful. It is still doing relatively well even with all the pressure on the high street. So, we have to be critical about the co-operative model and we have to modify it, but, essentially, we have to energise the workers. Worker co-operation is essential if we are to make an organisation work. That blend of everyone having a share as a consumer along with measures to energise the staff is absolutely the way forward.

Finally, now that we have all these new opportunities— we have not only crowdfunding and crowdsourcing, but blockchain and digital currency—there are real possibilities for transforming the economy big time, not little time. I am not talking about a couple of small shops or a couple of little start-ups; we need massively to change the way that we do things in this country. Most international business people whom I meet believe—partly because of Brexit but not entirely so—that we are heading for another global collapse of the economy, another global meltdown, another major recession. We will need, as never before, co-operatives, new mutuals and new ways of doing business. If those new ways of doing business are rooted in empowering people as individuals and as communities, a brilliant future will lie ahead.

The flag of the co-operative movement worldwide is a rainbow of colours. The United Nations has understood the power of our co-operative ideals to transform people’s lives not only in wealthy countries such as the United Kingdom and in Europe, but across the world. If we are to do something to stop what is happening in central America—the tragic picture of that father and little girl was still in my mind this morning—and if we are to bring wealth and power to people who do not have it at the moment, co-operation must be at the very heart of what we do.

Let me finish by saying that co-operation is wonderful, it must be updated and forward looking, and it has got to be, in the best sense, empowering and revolutionary.