Co-operative and Mutual Businesses

Anna Turley Excerpts

Thursday 27th June 2019 Commons Chamber

[Anna Turley (Redcar) (Lab/Co-op)]

I pay tribute to the hon. Member for Argyll and Bute (Brendan O’Hara) for his powerful speech. There is always much to learn from our colleagues north of the border, and we have much in common on this agenda. I pay tribute to my hon. Friend the Member for Harrow West (Gareth Thomas) for securing this debate, and I put on record my thanks, and that of all co-operators in this place and across the movement, for his service as chair of the Co-operative party for 19 years. He has been a passionate and loyal advocate and champion of co-operation in this country and across the world. We thank him for his service, and know he will continue to champion co-operatives in any future role. It gives me great pleasure to succeed him as the new chair of the Co-operative party. That is a huge privilege and responsibility, and I am proud to add my contribution to this debate.

This has been a fascinating debate with values shared across the Chamber between people who have taken differing positions on other issues. It is fascinating to see how co-operation has led to many shared views, and I found myself in agreement with the hon. Members for Wycombe (Mr Baker) and for Stafford (Jeremy Lefroy). We may disagree on other things, but we agree about much of what drove some of the anger, frustration and despair that we have seen in our communities over the past few years, and which expressed itself in the Brexit referendum in 2016. Whatever we think about how to fix things, there has been a sense of powerlessness, and a lack of agency and control over people’s ability to influence and shape their lives and the economy in which they live and work.

In my area, SSI, a Thai company, was able to pull the plug on the steelworks, with 3,000 job losses overnight. People have the sense that their lives are being buffeted by global forces over which they have very little control. It is no surprise that the “take back control” mantra that was used by those on the other side of the debate from me held such sway, and it was a huge driving force. For me, the co-operative agenda is all about taking back control, self-responsibility, democracy, ownership, and having agency in one’s life, and it is rare that people feel that about public services or about the wider economy. I think that the co-operative values and principles we have heard so much about today are the solution, and provide many of the answers to the challenges we face in our society and across our world. I am excited to help champion that agenda as we develop our policy thinking in the House.

I wish to focus specifically on the expansion of the co-operative sector, which I believe is necessary for us as a country. Labour Members have committed to at least doubling the size of the co-operative sector, and I am proud of that commitment. The Labour party’s boilerplate is “sharing power and wealth”, which points to why I do not believe the radical growth of the co-operative sector is an end in itself, but rather the beginning of the different kind of economy we seek—an economy that puts people at its heart. To support our growth we are lucky to find strength and solidarity from our movement, values and principles, but there is more to be done. The Co-operative party, working with the co-operative movement more widely, has taken a serious look at our infrastructure needs, and at the supportive environment required to grow the co-operative sector.

I pay tribute to the fantastic report recently published by the New Economics Foundation, “Co-operatives unleashed”, and I recommend it to the Minister as a good read. It sets out a series of steps that a supportive Government could take to support the co-operative sector. We must also consider what legislation we could pass, and we have heard fantastic examples of co-operative action around the world. We must reflect on the fact that our own sector and movement is not at the scale of those inspirational examples, because of this country’s legislative environment.

In many countries across Europe and beyond there is a basic legislative duty on the Government to promote the co-operative model. That will not be a panacea or cure all our issues, but it could signal intent and be a key driver of change to stimulate the co-operative economy. The framework in which co-operatives operate is not subject to constant review and updating in the way that company law is, for example. We have already heard about the Law Commission’s tidy-up job on co-operative and community benefit society law in 2015, which brought many disparate parts of the law together. The situation needs to be corrected, and a more visionary and forward-looking legislative framework should be sought—something we have not seen in this country’s legislative process for many decades.

There are also technical deficiencies in our current arrangements. For example, company law allows companies to act in the way they see fit where the law is silent and there is no guidance. When co-operative law is silent and has no guidance, it reverts to company law, and we could liberate our co-operative movement from that basic inequality. We should take more risks, and take more control of the environment in which the movement operates.

[Stephen Doughty]

I congratulate my hon. Friend on her election as chair of the Co-operative party. It is fantastic to have her in that role. I also pay tribute to my hon. Friend the Member for Harrow West (Gareth Thomas). Does my hon. Friend recognise the issue with devolution? We heard examples from Scotland but there are also some from Wales. Scotland and Wales have wanted to lead the way on much co-operative thinking, but they have sometimes been hampered by the devolution —or not—of powers. When we considered the new rail franchise, in Wales and the borders there was a lot of appetite for putting that in a co-operative or mutual model, but we were unable to do so because those powers had not been devolved by the UK Government. With Welsh Water we have the example of at least a semi-mutual. That shows the advantages of devolution in driving forward co-operatives, but perhaps we need some changes to allow innovation to take place.

[Anna Turley]

I completely concur with my hon. Friend. We see a lot of passion and commitment for the co-operative sector and its values and principles in Wales, and we should be doing everything we can to allow people the freedom to develop those ideals with a supportive and co-operative approach from the Government.

I pay tribute to my hon. Friend the Member for West Bromwich West (Mr Bailey) who has worked with Ministers to try to persuade them of the need to lift unfair and unnecessary regulatory burdens on small and medium sized co-ops—we heard a great deal of detail about that today. Such burdens should not exist in the first place, and we should endeavour to remove them. One aspect of the co-operative growth agenda that comes up repeatedly within the Co-operative party and the co-operative movement is the need for access to capital, which many other types of businesses can access in a routine way, while co-operatives cannot.

Of course there is a difference in the way the co-operative business model operates, but I encourage the Minister to listen carefully to ideas for new capital instruments as they come forward. In some countries around the world we can see that new capital instruments have been put in place relatively easily, and they are both attractive and maintain the integrity of the co-operative model. For example, I recommend that the Minister look at the developments in Australia, which is leading the way on this issue.

A second aspect of assisting the co-operative sector to grow and develop concerns the development of co-operatives themselves. We often look at small and medium-sized business development and support, and regional and local infrastructures are in place to facilitate that activity. The amount and type of bank lending is often scrutinised, which helps, and specialist support is available for entrepreneurs. It is evident, however, that such support is focused on just one type of private business. There are great co-operative development professionals around the country, but sadly there are not enough, and nor is the infrastructure in place to focus on how to grow more co-operatives around the country. It is clear that we would benefit from a more rigorous and systematic approach to co-operative development.

The wider benefit of co-operatives and mutuals to our economy is clear, and new co-operatives are more likely to last into their second and third years than private small businesses. Too often, those giving professional business advice know too little about the co-operative model, and as a first point of call for advice and mentoring they are highly unlikely to suggest a co-operative approach. All that needs to change.

One route to achieving that, which has already been mentioned today, is through a co-operative development agency for England. Such an agency could be a starting point for advice or grants, and advise Governments on the type of public policy that would help to create an enabling environment for co-operatives. I hope the Minister will take that idea from this debate and work with the co-operative movement to ascertain the best shape and form for such an organisation.

[Jim McMahon]

I congratulate my hon. Friend on her appointment as chair of the Co-operative party; she is a fantastic choice. Is this not a win-win for Government? For a small amount of investment and energy, they could double the size of the sector. She will be aware that the Co-operative Group, the Nationwide Building Society and Co-operatives UK have recently revised up the figure for the value of co-operatives to the UK economy to £60 billion. Imagine what even a small amount of growth could do to the UK’s GDP.

[Anna Turley]

My hon. Friend is absolutely right. I pay tribute to his great history in the co-operative movement and everything he did while leader of the council. We have talked a lot about the social and values-based argument, but there is a huge economic driver here. My hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned the importance of keeping money in local economies, which is of huge benefit to them. We continually see it drain away, particularly in smaller towns, and co-operative economies could play a role in keeping money in local economies. There is a very important economic argument here for the Government.

Another issue I would like to raise with the Minister, which I hope he will look into further, is the shared prosperity fund. Co-operative organisations, including Co-operatives UK, Locality and the Plunkett Foundation, have a campaign called “Communities in Charge”, which calls for a shared prosperity fund to include targeted funding to ensure it is made available for people and in places that need it most; for local people to be able to scrutinise spending decisions through citizens’ panels; and for at least 25% to be controlled by local communities to spend on local priorities. This is a really welcome campaign and I hope the Minister will endeavour to look more closely at it.

In conclusion, I would like to make a point about the type of campaigning, work and activity that co-operatives add to our communities. It is in their DNA to go further than any other business type to add to, rather than take away from, the communities they serve. Their operation and their model lead them to lead campaigns on loneliness, modern slavery, food justice, fair tax, employee safety and community safety—to name just a few. Some of those areas have been championed by one of the largest consumer co-ops in the world, the Co-operative Group, which, I note, recently won the title of co-operative of the year. That is the difference co-operatives make and the wider benefit they bring. It is an inspiration for all of us here who want more. The smaller co-operatives fighting to compete in non-traditional sectors, co-operatives aimed at disrupting exploitative markets, and our larger co-operatives serving members and their communities so well are all part of the fantastic co-operative difference that we are proud to support today.