Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Debate between Ben Everitt and Tom Randall

2nd reading & 2nd reading: House of Commons
Friday 11th September 2020 Commons Chamber

[Tom Randall (Gedling) (Con)]

I am grateful for the opportunity to speak in this debate. I appreciate the contributions of colleagues, who have spoken with great erudition and insight into these issues, and I congratulate the hon. Member for Cardiff North (Anna McMorrin) on bringing this Bill before the House and on her passionate remarks in favour of it.

This is a bold Bill and, I believe, a well-intentioned one, but it is not entirely original. Similar legislation has been passed in other jurisdictions, including Australia. The Treasury Laws Amendment (Mutual Reforms) Bill 2019 was passed by the Australian Parliament last year. In the debate in the House of Representatives, Dr Andrew Leigh, the Member of Parliament for Fenner, said:

“Mutuals build trust and reciprocity. They are an essential part of an inclusive society helping to foster empathy for our fellow human beings. Cooperatives and mutuals, as member-owned enterprises… are voluntary associations of people, democratically run for their members, for the pursuit of a common social, cultural or economic goal.”

If I might be forgiven for quoting not only a Labour Member but an Australian Labour Member with approval, I think that is a noble aim that we can all support. We see that very much in our local communities. There are many examples of local co-operatives in our society, and particularly on the high street, where we see Co-op shops, of which there are many in Gedling. I particularly enjoy my local Co-op, and I am grateful to the staff there for their friendly service. Every Co-op that I have ever visited has always offered a range of high-quality food in a well laid-out store. That is perhaps one of the most visible example of co-ops; we have heard many other good examples in the debate.

[Ben Everitt]

I wonder whether my hon. Friend is aware that the birth of the futures market—one of the most important financial parts of our economy—was the inadvertent result of a co-op of French nuns putting together the sale of a harvest that had not yet been sown.

[Tom Randall]

I was unaware of the enterprise of French nuns, but I am in awe of what they can achieve. I am grateful for that fascinating intervention.

The Bill has laudable aims, allowing co-operatives and community benefit societies to gain powers to raise finance by issuing redeemable green shares to external investors and investing the capital raised in an environmentally friendly, sustainable manner. I also appreciate the intention for there to be safeguards in the Bill to prevent the issuing of shares leading to the undermining of a society’s conversion into a commercial company, though I heard the criticisms of that made eloquently earlier.

It is perhaps worth noting, as my hon. Friend the Member for Rushcliffe (Ruth Edwards) alluded to in her speech, that sometimes when things go wrong, they do so quite badly. As my hon. Friends the Members for Northampton South (Andrew Lewer) and for Clwyd South (Simon Baynes) said, sometimes investments do go down as well as up, and it is possible to lose money in a new scheme.

The hon. Member for Cardiff North spoke a lot about community energy. As my hon. Friend the Member for Rushcliffe outlined, in Nottinghamshire we are scarred by the failure of Robin Hood Energy, which recently collapsed with the loss of over 200 jobs. The setting up of Robin Hood Energy was laudable: it was designed to create a wholly owned subsidiary of Nottingham City Council to create a not-for-profit subsidiary to tackle fuel poverty in Nottingham and provide a real alternative to the big six energy suppliers. As I said in an intervention, it had customers way beyond the city of Nottingham, and it did provide energy, but it has now failed at a cost of tens of millions of pounds to an inner-city local authority.

The rather damning report by Grant Thornton into the reasons for the failure of Robin Hood Energy centred around many of the governance arrangements. It said that the arrangements put in place by Nottingham city council for setting up and operating an energy company—a highly ambitious project in a complex, competitive and highly regulated market—were not strong enough, particularly given the nature of the company and the markets. It has been pointed out that there was insufficient appreciation within the council of the huge risks involved in owning and investing in an energy company such as Robin Hood Energy. There was insufficient understanding within the council of Robin Hood Energy’s financial position due to delays in the provision of information by the company, the quality and accuracy of that information and a general lack of expertise at the non-executive board level.

It perhaps would be unfair to judge the entire co-operative movement on the inept leadership of Labour-controlled Nottingham City Council, but it does help to raise the kind of concerns that might arise over the operation of these companies. My hon. and right hon. Friends have outlined those concerns in more detail. I look forward to seeing how the legislation and the ideas develop.