Co-operatives and Mutuality

Damian Hinds Excerpts

Thursday 30th June 2011 Westminster Hall

[Damian Hinds (East Hampshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I congratulate the hon. Members for West Bromwich West (Mr Bailey) and for Islwyn (Chris Evans) on securing this important and timely debate, which coincides with co-operatives fortnight. I will talk about financial mutuals, particularly credit unions. This is a promising time for financial mutuals, in the wake of the banking crisis and against the backdrop of the big society agenda and the emphasis on debt affordability at all levels.

Financial mutuals remain large, in spite of what has happened over the past couple of decades, and still serve one in three of the population through building societies, mutual insurers and friendly societies, co-operative financial services and credit unions. Credit unions, sadly, come at the bottom of that list, because it is ordered by number of members or customers or by assets under management. If the list were ordered by number of individual institutions, credit unions would come at the top. There are 48 building societies in the UK, with more than £300 billion in assets. The number of credit unions is about 10 times higher, at 426, but they hold assets of less than £1 billion.

Nevertheless, despite their relatively small size, credit unions in this country have been growing rapidly. Over the past 20 years, from 1990 to 2010, the number of members has grown from 54,000 to 800,000 and assets from £17 million to £750 million. However, there is an awfully long way to go. Compared with other countries such as the United States, Ireland, Australia and elsewhere, the penetration of credit unions among the UK population is small indeed. I see that as an opportunity rather than a problem.

Credit unions are traditionally mutuals owned by their members, who are savers and shareholders, and managed or overseen by a board of directors elected on the traditional one-member, one-vote basis. Critically, the interest rate at which they can lend is capped. It is about the only part of the financial sector that has such a cap. Historically, it was 12.7%, but it is now 27%. That still means, however, that anybody borrowing from a credit union knows that they are getting their loan at a reasonable rate. It is very important, because the market in which they operate features many other operators that charge a good deal more.

Payday lenders are a part of the financial market that the hon. Member for Walthamstow (Stella Creasy) might mention later. They represent an area of growth in the market and have received a lot of attention, but there are plenty of others. Home credits, for example, are a much larger part of the sub-prime market, have been around in this country for much longer and serve many more customers. Other parts of the market may not appear to have the same sky-high rates of interest, but they end up being just as bad a deal in terms of their overall charging structure. I am thinking in particular of some rent-to-own operators.

There are some brilliant opportunities for credit unions at the moment, and some strong and encouraging news from the Government, particularly the £73 million that they are making available in the modernisation fund for credit unions. Many areas of modernisation need to be looked at, but I think that what the sector finds most exciting is the development of the back-office platform and the potential to interface with the Post Office. That opens huge opportunities to bring credit union services to a much larger part of the population and for them to be much more visible in the marketplace.

Another critical piece of the jigsaw is the legislative reform order, for which the credit union sector has been waiting for some time. The issue has straddled the change in Government and we hope that it can now progress with great speed. It will enable critical changes in the sector to facilitate its further development. First, it will soften the common bond requirement—which relates to where someone lives or works, who they work for, or which organisation they are a member of—to become a member of a credit union. Secondly, it will enable credit unions to offer services not just to individuals, as is the case at present, but to organisations, particularly charities and voluntary organisations, although it might also apply to firms. Thirdly, it will enable credit unions to offer a fixed rate of interest to savers, if they wish. That will make them more attractive and enable them to provide a better range of financial services.

There are other issues. The sector looks to Government for a proportionate approach to regulation. They are, relatively speaking, only little and have not had the problems that the big banks had during the crisis. They want an appropriate level of regulation that matches their size and role.

There are also new opportunities, such as the big society bank, which is a wholesale bank that needs organisations on the ground to administer its funds. I am sure that community development finance institutions will play a big part in that, as will credit unions, in a post-legislative reform order world. Not all credit unions will find that appropriate, but some of them may. Credit unions could also play a role with the son or daughter of the social fund, in its new, evolved form. Local authorities will be more responsible for elements of that. They do not have a long history of dealing with crisis loans and so on, but their local credit unions could help them in that regard.

Looking to the future, I think there will be some blurring of the exact lines between credit unions, CDFIs, social lenders and microfinance institutions. It would be good to see the development of more microfinance institutions of one sort or another in this country, as well as internationally. Technology may also help us to broaden the boundaries of credit unions and to bring more people in, particularly as savers, which will allow them to expand their business. That is also applicable to microfinance and, eventually, to retail investors in social impact bonds.

Two key developments will enable that. They might involve a role for Government, but they might not—they might come from entirely different parts of the social finance sector. The first is the development of a social ISA, which I wrote about some years ago in a Bow Group pamphlet on credit unions and increasing the capitalisation available for them. Others have written about similar things in relation to all sorts of other projects. It sounds very much like an idea whose time has now come, to enable ordinary retail investors to put their money behind socially worthwhile projects and accept a slightly lower financial return as a result.

[Steve Baker]

My hon. Friend has mentioned returns, but at the moment the banking system seems to be failing both savers and entrepreneurs simultaneously. I wonder whether such projects might give a better return to savers while benefiting entrepreneurs.

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[Damian Hinds]

I am grateful to my hon. Friend for that fine point. In fact, it is true now, to some extent, that people will get a better return through a dividend from some credit unions than they would through some high street bank savings accounts. It is also possible to say that interest rates for savings accounts in general are so low that it does not make a whole lot of difference whether one gets a return that is much lower—credit union returns have the benefit of not changing after the first six months and of not having complicated introductory marketing deals. The general principle that I am trying to outline is that there are many people who, for a proportion of their savings, would be happy to accept, on average, a slightly lower cash return, because they know that their cash will be doing something worth while, either in their local area or, as is the case with some people, in supporting microfinance and so on.

I will mention the second development briefly, because I have talked for longer than I had anticipated. It relates to exchanges to bring people together, so that they can find the opportunities. Many people to whom I speak who are relatively well off and who have heard about credit unions, CDFIs or microfinance, say, “I’d love to put a bit of money into that.” The problem is that they do not know where to find these things. How would they? They are not organisations with multi-million dollar marketing budgets, so an exchange could put people in touch with those opportunities.

In conclusion, the future is bright for credit unions. We need the legislative reform order to complement the investment and support that the Government are giving the sector. Of course, credit unions also need to step up to the plate. They need to make sure that they keep their cost base trimmed, that they have a balanced portfolio with a good mix of customers, savers and borrowers, that they continue to develop their financial products, and that they consolidate the sector in the post-LRO world.

It has been a pleasure to take part in this important debate. Again, I congratulate the hon. Members for West Bromwich West and for Islwyn on securing it, and thank you, Mr Amess, for presiding over it.

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[Justin Tomlinson]

I thank the hon. Gentleman for his intervention. In an ideal world, we would have cash-for-cash comparisons if people wanted to borrow money. I echo the comments about doorstep lending. The Minister feels strongly about it, and it really needs to be dealt with. The sales techniques are nothing short of disgraceful.

[Damian Hinds]

Does my hon. Friend agree that despite the apparent attraction of straightforward interest charges being disclosed, they lack something because they do not cover any of the behavioural charges. There is no perfect way, but it would perhaps be slightly closer to perfect to have disclosure of both the set-up costs for the loan, and the interest rate on top. That twin-rate approach is much more reflective of lenders’ cost structures.

[Justin Tomlinson]

I absolutely agree. The key message is that the Government are reviewing the matter, and they should do so with time and patience to make sure that it is delivered in the right way that people can understand. We do not want to fall into the trap of obvious headlines, because that would just make the situation a lot worse.

On public services, I spent 10 enjoyable years in local government, four of them as a cabinet member making key decisions. I fully support the principle of allowing staff with front-line experience, and who are fuelled by their direct passion, to make a difference and have a greater say in how services are delivered, instead of remote politicians—this applies to all of us—without that experience.

I pay credit to the Co-operative shops—my local shop is a Co-op and its cheesy tasty bread is very good—for the way they conduct the elections to their board. Every member—I am a proud member of my local Co-op—is sent a clear booklet, and as we consider creating elected police commissioners and having other elections, that may be a model to consider, especially if we manage to ban political parties from being involved in such things.

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[Tom Greatrex]

The hon. Gentleman anticipates the point I was about to make. My experience—and that of many others involved in supporters’ trusts—has been that at a moment of crisis, when owners walk away from a club because they have lost interest, or are unable to continue because it is more challenging than they thought it would be, they leave clubs in the lurch. One thing that can be said about football clubs is that players, managers and chairmen may come and go, but the fans remain constant. They have a huge amount of concern for and emotional attachment to their clubs, and they will step in. In the past, fans have stepped in very successfully—we could all give examples of trusts that have become involved in running a club, and done it well. The hon. Gentleman’s point is right. I desire to see supporters’ trusts not only getting involved in times of crisis when no one else steps in, but also getting involved in representation and the running of the club, so that there is a direct link to the supporters and communities.

That is why I am concerned about the situation with Supporters Direct. As I know from personal experience, Supporters Direct has provided huge support in getting trusts established, and it has campaigned on some wider issues concerning the ownership of football clubs and other sporting clubs. We need such a body to help co-ordinate that work. I raised that point with the Minister for Sport and the Olympics during questions to the Department for Culture, Media and Sport a couple of weeks ago. He recognised the issue and said that talks would be taking place on Friday. I am not sure which Friday he was referring to, but there have been a couple of Fridays since then and the issue is as yet unresolved. If Supporters Direct, or an organisation of that type, does not take that role, there is the danger that supporters’ trusts that need to be developed will not get the opportunity to learn from others and proceed with development. Instead, the funding will be fragmented and, as hon. Members will be aware, it is a relatively small amount of money given the wealth that swirls around football, particularly at top level.

As I understand, part of the Premier League’s reasoning concerns comments made by the former chief executive of Supporters Direct. I know that the individual concerned regrets those comments; he has apologised fully and since resigned. I hope therefore, that that issue is not still an impediment to the continuation of Supporters Direct. I realise that that is not the Minister’s direct responsibility, but I hope that he will mention the issue to his colleagues in the Government. It is an important aspect of co-operatives and mutuals and there is a great degree of concern about it.

I also wish to raise a couple of specific issues about credit unions. The hon. Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for Islwyn spoke eloquently and passionately about the role of credit unions. I am fortunate in having a number of credit unions in my constituency, and everybody is covered by the bond for credit unions. Blantyre and South Lanarkshire credit union means that the whole of South Lanarkshire is covered, and there are a number of smaller credit unions in Rutherglen, Cambuslang and Hamilton.

On Friday I met representatives from the WHEB credit union—Whitehill, Hillhouse, Earnock and Burnbank—which operates in a small part of Hamilton in my constituency. I raised a couple of issues with them that refer back to the comments made by the hon. Member for East Hampshire, particularly in relation to the potential for credit unions in the future. The ambitious and appropriate programme for future development will do a huge amount of good to the credit union movement and to consumers, but we must be aware of the concerns felt by smaller credit unions that they do not get lost in a drive that could end up with larger credit unions effectively taking them over. I say that because WHEB credit union, for example, is tied to a specific, but quite small geographical area and has a relatively small number of members in comparison with other credit unions. WHEB is trusted in that area because it is seen by members of the community as a sound source of credit and a reliable organisation. I am slightly concerned that in the drive to develop credit unions, some of the smaller and community credit unions could be left behind. I do not want that to happen.

I have a further point, which is relevant to the Minister’s responsibilities. WHEB told me last week that one problem that happens more and more frequently is where people join the credit union and save the minimum amount needed to have access to a small loan. They then take out that small loan and almost immediately apply to become bankrupt, which they use as an opportunity to get over the repayments. I appreciate that insolvency is a devolved issue, and that accountancy and bankruptcy are devolved responsibilities in Scotland, but part of the problem I have described is because of radio adverts, for example, that say to people “We can help you get rid of your debts by you becoming bankrupt”, without explaining some of the consequences. We hear about such things more and more frequently, and we heard during earlier contributions about some of the other advertising that goes on. There are examples of people using credit unions to save enough to be able to borrow money, and they then default on their debts.

That issue was raised with me because, as I have already said, WHEB is a small, community credit union—I am sure there are many others—and it is not well placed to absorb the number of insolvencies that are taking place. I was told that there were seven such cases over the past month. That might not sound like a lot, but for a small credit union in that area it is starting to have a significant impact and causing concern. Perhaps when the Minister responds, he will address the issue of advertising for such services, which, given the way the adverts seem to suggest to people that all their problems could be over, borders on irresponsible. The effect on smaller credit unions is an unintended consequence of that.

[Damian Hinds]

I am conscious that the debate is about co-operatives and mutuals, so I do not want to draw the hon. Gentleman too much further into this area, but does he agree that part of the problem is that, these days, the route that people end up pursuing in an alleged solution to their debt problems seems to be driven far more by which advert they see first, rather than which type of solution is most appropriate to them? In some cases, it will be insolvency, but in many others it is not, regardless of the fact that the specific firm that they go to may have charges that are inappropriately high.

[Tom Greatrex]

The hon. Gentleman makes an important point. I am under no illusion that the issue is an easy one for the Government to tackle, but I wanted to reflect the concern and raise it with the Minister. I am sure that he is aware of it, but I hope that he will comment on it.

Finally, I want to reflect on the importance of mutuals and co-ops. This has so far been a very good debate, covering a wide range of issues. That highlights the wide range of co-operatives and mutual organisations that exist. They are not just an interesting historical relic, but a huge opportunity for the present and for the future. In relation to Supporters Direct, I am pleased that the coalition agreement is explicit about the positive role that can be played by supporters having ownership of football clubs on a mutual basis. However, some contributions to this debate have reflected the fact that there are a lot of warm words on this issue and we now, across the parties, want to see those transformed into action on the specific points that we have discussed. I hope that the Minister will be able to reflect on and respond to those points and give Opposition Members some comfort that the rediscovery of mutualism by a wider range of people means that there is a real, lasting and meaningful commitment to helping to develop mutual solutions to some of the issues that the country faces.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

I welcome the opportunity to have this debate and I congratulate my hon. Friends the Members for West Bromwich West (Mr Bailey) and for Islwyn (Chris Evans) on convincing the Backbench Business Committee to allow it to be held. I also echo the welcome for the opportunity to speak under your chairmanship, Mr Amess.

I am a member of the Co-op party; indeed, I am privileged to chair the Co-op party, and to be a Labour and Co-op MP. I therefore particularly welcome the opportunity to speak in this debate for the official Opposition. As other hon. Members have said, it is taking place during co-operatives fortnight, which runs until 9 July. It is an opportunity to celebrate the considerable contribution that co-ops and mutuals make to British economic and social and cultural life. However, it would be wrong of me, speaking for the official Opposition, not to go further and undertake some scrutiny of the Government’s record to date on providing assistance, or not, to the co-op sector.

First, let me acknowledge the contributions made by hon. Members who have taken part in the debate. My hon. Friend the Member for West Bromwich West, in setting out the scope of the debate, rightly alluded to the stereotypical view of the co-op movement that there certainly was throughout the 1990s and the early part of the current century. It saw co-ops not as dynamic and forward looking, but as things that were associated very much with the past. He rightly drew attention to the considerable change in the fortunes and perceptions of the co-op movement. I am sure that he shares my view that part of the reason for the turnaround in the perception of the co-op ideal in recent years has been the performance of the Co-op Group, notably under Len Wardle as chair and Peter Marks as chief executive.

I also echo my hon. Friend’s tribute to Cliff Mills, a solicitor from Cobbetts and an expert on the law surrounding co-ops. When I had the privilege of taking a private Member’s Bill through the House in 2002-03 that, I hope, began the process of modernising co-op law, Cliff Mills was a huge support and source of expertise. My hon. Friend was right to pay tribute to him.

The hon. Member for East Hampshire (Damian Hinds) rightly drew attention to the contribution that credit unions make and to their considerable potential to do more. He drew attention to the opportunity for the current Government to build on the work of the previous Government in encouraging access to credit unions. He gently asked—I paraphrase—why on earth the Government had not got on with the legislative reform order. Perhaps the Minister will be able to tell us when that order might appear before us.

A number of hon. Members drew attention to the difficulties that many people in the community that we represent have in needing to access money. I remember from my time in government the huge concern that grew and still exists today, which no doubt the Minister will want to comment on, in relation to illegal money lending. I pay tribute to my predecessor as the Minister responsible for consumer affairs, Ian McCartney, for, among other things, creating the concept of illegal money lending teams. That resulted in multidisciplinary teams, whose members included police and people from housing associations. They worked together not only to crack down on loan sharks, many of whom were particularly unpleasant individuals—there has been real success in bringing loan sharks to justice—but to ensure that victims had support to get out of the financial problems that had drawn them into the web of the loan sharks. Credit unions were often a crucial part of helping the victims of loan sharks to move towards a more sustainable future. In that context, I will come in due course to a point that my hon. Friend the Member for Islwyn made about access to credit unions across the country.

The hon. Member for East Hampshire raised the issues relating to social ISAs. I would be interested in the Minister’s response to the view expressed by the hon. Member for East Hampshire about their potential. The Minister may be aware of the Big Lottery Fund’s launch of a social impact bond—a particular model that it has backed. Again, I would welcome hearing from the Minister the Government’s view on whether that bond has considerably more potential and in particular whether it has the potential to help co-operatives to expand, perhaps in the way that my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) alluded to in the context of renewable energy.

My hon. Friend the Member for Islwyn drew attention to the success of Tower colliery following its conversion to a worker-led co-operative. I echo his praise of the leadership of the colliery. I enjoyed my visit to Islwyn with him. I very much enjoyed the opportunity to see the Islwyn community credit union. Some fantastic people are involved in the leadership and running of that organisation and are making a real difference to his community. He referred to the considerable success that Wales has had in ensuring that there is access to a credit union for anyone and everyone in Wales if they want to join one. That is surely an ambition that we should have for England. It would be good to hear from the Minister whether the Government share that ambition and what they intend to do about it.

My hon. Friend made a very interesting proposal when he talked about whether we should consider lowering the age at which someone can join a credit union. That might encourage far earlier recognition of the potential of credit unions and thus draw people away from the very high interest rates charged by some of the legal companies. Some of them offer small amounts of money on what are often very high interest rates, relatively.

[Damian Hinds]

I am sure that the shadow Minister knows that the junior savers club mentioned earlier is not the only one. Many credit unions operate junior savers clubs, which allow young people to become more familiar with credit unions and encourage them to get into the savings habit.

[Mr Thomas]

Indeed, but that brings me back to what I said about the difference between Wales and England. Credit unions have a far greater reach in Wales than they do in England. We definitely need to see better access to credit unions in England, and better teaching in our schools about their potential to encourage saving from an early age.

The hon. Member for Hereford and South Herefordshire (Jesse Norman) made a number of important points about the contribution that co-ops have made. He adds to the pressure on the Government to prove their commitment to the co-op sector, as opposed to making worthy speeches about them. I echo his tribute to the life of Robert Oakshott. However, I gently suggest that he needs to do a little more to convince us that there really is a Conservative co-op movement, and that it is not just an oxymoron. We shall doubtless hear more from him on that subject in due course.

I turn to the contribution of the hon. Member for Chatham and Aylesford (Tracey Crouch). She made a number of references to the role of co-ops in the south-east, and I am sure that that will have been appreciated by the members and leadership of those co-operatives. She also alluded to the possibility of Conservatives standing under the banner of the co-operative movement. I understand why she would want to tone down the Conservative brand at the next election, but I doubt that that will be enough to help her.

My hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) spoke about the role and contribution of supporters trusts. He and the House may not be aware that the two greatest football teams in Wales and England, Swansea City and Arsenal, both have supporters’ trusts, and both have been helped by Supporters Direct. My hon. Friend will know, as will some of my other hon. Friends—but not Government Members, I suspect—that Supporters Direct was originally proposed by the Co-operative party and taken up by my right hon. Friend the Member for Leigh (Andy Burnham) when he worked for Lord Smith of Finsbury.

I join my hon. Friend in urging the Premier League and the Government to sort out the funding problems for Supporters Direct. It would be a terrible tragedy if the misjudged comments of someone who has now resigned from the leadership of Supporters Direct were to undermine the concept of football supporters’ trusts and the ambition of giving fans ownership and some further involvement in the running of football clubs. Perhaps the Minister can give us an indication of the Government’s thinking on that, and say whether they have been able to sort out future funding for Supporters Direct.

A number of hon. Members referred to the contribution of the Rochdale Pioneers. It is worth restating that, in opening their first shop on 21 December 1844, they were responding to the acceleration of mechanisation implicit in the industrial revolution. They put forward fairly radical ideas, typical of the traditions of the centre-left, in challenging the status quo to make things better for their community. In part, they were driven by the terrible poverty in the community and the need to provide people with affordable food. Some Members praised the contribution made by Robert Owen and the other community examples of co-operation in action that took place before the Rochdale Pioneers set up their first shop; they were right to acknowledge that co-operative spirit.

Today, the global co-operative movement has about 800 million members. It employs 100 million people and secures the livelihoods of some 3 billion people—half the world’s population. Indeed, there are 20% more jobs in co-operatives around the world than in multinational corporations. If only the same attention were given to the needs of co-operatives as is given to multinational corporations, the co-op movement would be in even better shape.

My hon. Friend the Member for West Bromwich West identified the traditions of collective self-help and the entrepreneurial spirit as driving influences in setting up effective co-operatives. As we heard, the UK has almost 5,000 successful co-ops, with almost 13 million members. The turnover of UK co-ops has risen by some 25% over the past three years. Perhaps the best-known example of co-ops in the UK is the Co-op Group, of which the Co-op bank is an essential part. Its move into renewable energy was mentioned by others. There is also, of course, the excellent John Lewis Partnership. If I may crave your indulgence, Mr Amess, I praise also those who are part of the Rainbow Saver credit union, in which I declare an interest, and those who run the excellent Harrow and Hillingdon credit union.

As I said, I had the privilege of piloting a private Member’s Bill through the House, which enjoyed the support of a huge number of co-operatives, including those running Labour clubs, rugby clubs and even armed forces clubs—and, surprising to me at the time, those running Conservative clubs. They all supported my Bill, which helped me to get it past the then Member for Bromley and Chislehurst, one Eric Forth.

Ministers have made a number of positive speeches over the past 12 months or so about the potential contribution of co-operatives, but the Government’s record over that time suggests that the apparent enthusiasm for co-ops shown by the coalition is not backed up by the reality.

The hon. Member for Cardiff North (Jonathan Evans), who is no longer in his place, and my right hon. Friend the Member for Cardiff South and Penarth (Alun Michael) have, on many occasions, raised the issue of the possible remutualisation of Northern Rock. Indeed, Co-op Members on the Opposition Benches have been pushing for some time for the Government to give serious consideration to the case for remutualisation.

The Government have clearly rejected that option, but it is important that they publish the work that one hopes has been done on that subject by United Kingdom Financial Investments Ltd. That is necessary not least because, when the Government said that they intended to sell Northern Rock to the highest bidder, there was much media speculation, presumably briefed by Treasury sources, that the Government did not expect to receive in full what they had injected into the bank. Will the Minister assure the House that all the paperwork that UKFI has produced on the feasibility of remutualisation will be published urgently, so that the House can assess whether UKFI and Deutsche bank, its advisers, did a thorough piece of work?

The Minister will be aware of the real concern about other aspects of the financial mutual world, particularly about the new European capital requirements to enable financial services businesses better to absorb losses, and how they will impact on building societies following the introduction of the new Basel standards. They do potentially pose a threat to the future of building societies. I recognise that the Government have acknowledged that and have been in discussion with European partners. I would welcome an update on that and further reassurance from the Minister that the Government are on the case to ensure that these new requirements do not prevent successful mutuals such as Nationwide, the Coventry and the Principality from being able to play an important role in the financial services sector in future.

The Minister will also have been briefed about the concerns about the future of friendly societies and the way in which the Financial Services Authority has revisited its own rule book and used a piece of legal advice. A former Minister, who was re-elected to the House in 2010, introduced the legislation on which that legal advice is based, but has said that it should not be applied to mutuals. None the less, that legislation is being used by the FSA as the basis of a piece of legal advice, which it will not publish, that is causing a series of friendly societies to face the prospect of demutualisation in the long term. It cannot be in the interests of the country to have an important part of the financial mutual sector facing such a threat.

I appreciate that both Hector Sants, the head of the FSA, and the Financial Secretary to the Treasury, who has responsibility for financial mutuals, have come to the all-party parliamentary group on building societies and financial mutuals to answer questions on the issue. As yet, though, there appears to be no serious effort by the Treasury and the FSA to find a resolution to the problem. I urge the Minister, who has made positive comments about co-operatives and mutuals in the past, to use the influence of his position to turn that situation around.

Furthermore, will the Minister explain what on earth has gone wrong with the coalition’s support for co-operative schools? Schools that want to become co-operative trusts have traditionally been funded to the tune of some £5,000 to help with the process. Currently, there are more than 100 schools that want to become co-operative schools. Given the success of that programme, why has the Education Secretary decided to end funding for that programme?

My right hon. Friend the Member for Cardiff South and Penarth mentioned that the previous Labour Government had intended to announce the mutualisation of British Waterways. Will the Minister explain how it will become a genuinely mutual organisation that involves people other than just a select group of trustees in its running?

The Minister has done much work on the future of the Post Office and has announced plans for it to become a mutual. One of the concerns that has been expressed both on the Opposition Benches and outside the House is about whether or not there is a viable business plan. I welcome the mutualisation of the Post Office, but there needs to be a viable business plan if it is to be successful. Will the Minister provide further clarity on that matter?

Will the Minister explain why the Government have decided to scrap the funding that supports the development of community pubs? The previous Government worked with the Plunkett Foundation to set up a programme to support such pubs. The scrapping of the funding can only hasten the demise of pubs in many communities across the country, making it far more difficult for people to come together and organise themselves.

My hon. Friend the Member for Liverpool, Wavertree talked about the failure of the Government to encourage community energy projects. Given that the Minister is a member of the same political party as the person who is responsible for that dismal record, will he pledge to take back to the Secretary of State for Energy and Climate Change the concern of the Chamber over his lack of commitment to co-operative energy projects?

Lastly, in terms of a critique of the coalition’s record on co-operatives, will the Minister explain to the Chamber why the Secretary of State for International Development is refusing to fund again the International Labour Organisation’s project for helping co-operatives in Africa? That programme has had considerable success in helping to strengthen the co-operative model, particularly in the financial sector in Africa, and such a decision seems somewhat at odds with the coalition’s commitment to both international development and co-operatives.

This has been an interesting debate with some important contributions from all parts of the Chamber. None the less, the only conclusion that one can draw after 12 months of the coalition Government is that there have been a lot of fine words about support for co-operatives, but not much action. I hope the Minister will give us some clarity as to when that situation will change.