Co-operatives

Anna Turley Excerpts

Thursday 14th July 2016 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Hollobone. I, too, am extremely proud to be a Labour and a Co-operative MP. I am grateful to my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) for bringing this debate.

It is always a pleasure to talk about co-operative values and principles and the contribution that co-operatives make to our economy. It is not just a dynamic that we see today. The impact historically over a huge amount of time, going all the way back to the Rochdale pioneers, shows that co-operative principles were as relevant then as they are today. Those principles, which we see around the world, are voluntary and open membership, democratic member control, economic participation of members, autonomy, independence, education and training, co-operation and concern for community. Those principles all have a great deal to offer for the economic challenges that we face today. Never have the values of self-help, responsibility, democracy, equality, equity and solidarity been more important.

With those values in mind, it is incredible to reflect that we see more than 7,000 co-operatives in this country. Co-operatives make a huge contribution of £34 billion to the British economy and are a vital part of the economic picture. A quarter of the UK population are members of co-operatives, and the importance of those values should not be underestimated.

Those values are particularly important today because of the climate and the challenges we face with the global economy. Since the crash in 2008, we have seen a lack of trust in our financial institutions, growing insecurity and instability in globalisation, a wealth of unethical practices and a casino capitalism that brought the crash that has had such devastating consequences. The pressures of the global economy have brought huge opportunities as well as that great disruption. As a result and as the Brexit vote showed, particularly in my constituency, many people feel insecure and left behind by the benefits of globalisation.

As we look forward, the technology-driven change that is reforming the world we live in is opening up exciting possibilities to improve the way we live and work, creating new industries and new kinds of work, and bringing down social barriers. However, it also poses real challenges, particularly in this transition period as the status quo in many areas of our society and economy is swept away. The job for life is now rarer, replaced with less secure work and more self-employment. The next generation of automation could see more jobs replaced by robots. For policy makers, that means grasping new means to manage the resulting economic and social change. For those on the centre left of politics, particularly those of us who are co-operators, the task is even greater, as our commitment to working for an equal and just world faces new frontiers. The need for progressive and co-operative policies—that ensure the gains from the changes of the technology revolution are shared, that people are empowered and that those at threat of losing out are protected—is greater now than ever before.

It is often said that globalisation diminishes the power of the state and renders the traditional levers available to Governments less effective. For the political right, that conforms with their deeply held belief that markets work best without state intervention. As a co-operator, my view is that a co-operative state can play an important role in supporting and encouraging better co-operation, more self-help, more mutual support and fairer regulation.

Co-operative and mutual ideals can help to tackle the growing inequality in the global economy and some of the global insecurities that are seeing communities left behind. As co-operators, we would like to see freelancers coming together to form co-operatives for shared services. Colleagues have given examples of music teachers coming together. We know of examples of co-operators in social care locally and in our co-operative councils movement. There is real flexibility and an opportunity for people to come together to share their services. Instead of being self-employed, with all the flexibility and insecurity that that involves, they have an opportunity to work together and support each other.

We would therefore like to see the Government recognise this growing self-employed workforce in an insecure world and develop organising strategies for self-employed workers, bringing together trade unions and the co-operative sector to find solutions. The development of organising strategies should involve consideration of key priorities for action, including the primary sectors, such as the creative industries, care services and the green economy. In primary services, that includes: credit unions for freelancers, the provision of micro-insurance and related services such as debt collection, tax accounting and legal advice, the scope for platform co-operatives and sources of capital for co-operative business development. Those are vital steps that the Government could support to create a better environment for local co-operatives to thrive.

We would also like to see more profit-sharing proposals. The Co-operative party calls on the Government to legislate to ensure that all businesses with more than 50 employees can set up a profit-sharing scheme with their staff, with a minimum profit share pot set aside based on a calculation of annual profits and financial position. We would like to see duty to involve, in which the European stakeholder approach to business would be embraced. Through duty to involve, employees are given a formal role in making decisions about how a company is run, with works councils operating in workplaces. We welcome the commitment and perhaps belated conversion of the former Home Secretary, now Prime Minister, to co-operative values and principles.

We would like to see employees on company boards. The Co-operative party is calling for company law to be modified to ensure that representation is given to employees and other identified stakeholders in all publicly listed companies. We would like to see tax incentives for employee ownership. As it stands, the Government spend £615 million a year on tax incentives for employee ownership, but it is poorly targeted towards individual shareholdings and the remuneration of senior executives. We would like to see tax relief offered to all-employee share ownership schemes, which require employees to purchase and hold shares for a number of years to benefit. That would save the Government £285 million a year. We are calling for £50 million a year to be invested in giving permanent employee benefit trusts the same tax treatment as other schemes, with the other £235 million targeted at schemes that give employees a collective, democratic voice.

We would also like to see tax incentives for community energy and supporter-owned sports clubs and the statutory right to request employee ownership. Employee buy-outs can often be an attractive route for business succession, because they transfer ownership to people with a genuine interest in an enterprise’s long-term success and can increase the likelihood of the enterprise continuing to provide trade and jobs locally.

Those are some of the proposals we would like to see. It is clearer than ever that the principles that we have seen over the last 100 years remain as relevant and vital today, as we face the future challenges of technology and an insecure globalised world, as they were at the time of those great pioneers back in 1844.