Co-operatives

Catherine McKinnell Excerpts

Wednesday 3rd July 2013 Westminster Hall

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Islwyn (Chris Evans) on securing the debate, which is extremely timely, given that it is being held during this year’s co-operatives fortnight. My hon. Friend is well known and respected for his staunch support of the co-operative movement, and he serves as one of 32 Labour and Co-op Members, some of whom are members of the shadow Treasury team. The debate has included several excellent contributions that put the case for co-operatives and their impact on the economy, and I will mention a few of the most powerful points that were made.

My hon. Friend the Member for Islwyn made a characteristically passionate speech about rebuilding trust in our society and the role that the co-operative movement clearly plays and can play in future. My hon. Friend the Member for Rochdale (Simon Danczuk) rightly and proudly proclaimed the historical roots of his constituency as the birthplace of the co-operative movement. My hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds) talked about not just the past and the present but the future of the co-operative movement, while my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) touched on the potential for the co-operative movement to make a real contribution to many of the challenges that we are facing—not just regarding our energy solutions for the future, but in housing.

My hon. Friend the Member for Corby (Andy Sawford) referred to “sticky money”, which is a useful way of thinking about the contribution that co-operatives make to the economy and the issue of trust to which my hon. Friend the Member for Islwyn so poignantly referred. My hon. Friend the Member for Walthamstow (Stella Creasy) made a late but welcome contribution on the many benefits that the co-operative movement brings in finding innovative solutions to the challenges facing us.

I want to add my wholehearted support to this year’s co-operatives fortnight, the theme of which is “Choose co-operative”. It seeks to raise consumers’ awareness and understanding of the diversity and benefits of co-operatives, most of which are local, loved and trusted firms. The co-operative movement employs almost 100,000 people in 2,800 food stores throughout the country, and I declare an interest as a regular shopper at my local Co-op store, which never fails to impress me with its contribution to the local community and its clear desire to put something back. The Co-op also has a significant work force and a dramatic impact on local economies. The Co-operative Group estimates that it contributed £2.2 billion to national wealth in 2012, while co-operative businesses turn over more than £37 billion a year.

We should focus on what makes the Co-operative Group, one of the UK’s largest private employers and the country’s largest mutual business, different. What makes co-operatives—to use the theme of co-operatives fortnight—local, loved and trusted? The speeches made by all hon. Members have provided the answer: the ethical values and principles underpinning those businesses of honesty, openness, social responsibility and caring for others. My hon. Friend the Member for Corby referred to the clear principles on which the co-operative movement bases its approach. They are powerful in themselves, and together they make an important contribution to the economy.

The co-operative movement is about a different way of doing business. It puts sustainability, the welfare of local communities—in the UK and overseas—and its members at the heart of everything it does. The co-operative sector has grown by more than 20% since 2008, despite turbulent economic times, and has around 15.4 million members. It demonstrates that is possible to run a viable, thriving business while staying true to all the social values and principles that saw the Co-operative Group supporting 12,000 community initiatives. My hon. Friend the Member for Corby referred to some of its important work in that regard.

Under the “farm to fork” programme, more than 17,000 primary school pupils were invited to visit Co-op working farms in 2012 alone. The Co-op plays an important role in meeting the rising challenge of childhood obesity and the importance of linking where our food comes from and how it is produced.

An issue that is close to my heart and that was key in bringing me into politics in my youth is fair trade, and the Co-op is delivering record sales of Fairtrade products. Indeed, with sales up 20% over the past 12 months, the Co-operative Group is the UK’s leading Fairtrade retailer, selling three times the volume of such goods that would be expected for a business of its size.

Crucially for the UK’s current and future economy, the co-operative enterprise hub is a nationwide programme that delivers support and assistance to up-and-coming co-operative businesses. It provides advice, skills and support for co-operatives that want to start trading, that are in their first year of trading, that are experiencing rapid growth, that are planning to move premises, that are developing a new product service or market, or that want to change their management structure. The valuable support of the enterprise hub has helped more than 1,000 co-operatives. I am sure that the Minister will want to commend the hub on that impressive figure and that he will suggest how the Government will support its important work.

I would be remiss if I did not mention that 37% of directorships in co-operatives are held by women, which contrasts starkly with 13% in leading companies. Will the Minister comment on that and explain what the Government are doing to learn from the work of co-operatives in supporting women to get to the very top of decision making?

Let me turn to financial services and the Co-operative bank. My hon. Friend the Member for Islwyn explained that his co-operative values and principles, combined with his background in the financial sector, led him to campaign on the need for greater transparency in banks’ activities and transactions through his Banking (Disclosure, Responsibility and Education) Bill. Sadly, it ran out of parliamentary time last year, but it would have ensured that everyone, regardless of their background, would have equal access to routine affordable financial services and credit. He said that it was time that banks started serving society, rather than the other way round, and we should all support that.

The shadow Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Streatham (Mr Umunna), has said that co-operatives are not guarantees of special wisdom or perfect foresight. It is still too early to make a proper assessment of what went wrong at the Co-operative bank that led to the bail-in that was announced last month, but I want to echo the views of hon. Members, including the hon. Member for Warrington South (David Mowat), that it would be incredibly disappointing if the Co-operative bank’s ethos was lost because of a slight change in the way its shares are bought and sold. I would be grateful for an update from the Minister on that important issue for those Members who expressed concern about it.

I finish by again thanking my hon. Friend the Member for Islwyn for securing this important debate and giving Members the opportunity to mark co-operatives fortnight in a very apt way. I look forward to hearing the Minister’s response to the positive solutions that we have heard today.