Co-operative and Mutual Businesses

Debate between Gareth Thomas and Jim Shannon

Thursday 27th June 2019 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in support of the motion standing in the names of the hon. Members for Harrow West (Gareth Thomas) and for Wycombe (Mr Baker). I thank the hon. Member for Harrow West, in particular, for the massive contribution he has made, over the time I have been here but also long before that, to support co-operatives and mutuals. We all appreciate that greatly. I concur completely with the sentiments set out in the motion, especially those relating to the contribution that co-operatives and mutuals play in the economy of the United Kingdom, which I believe is much under-appreciated. I therefore want to add my support to co-operatives and mutuals, with a particular focus on credit unions, which I know best, as they feature greatly in my constituency.

Recent years have witnessed an increase in the number of co-operative and mutual businesses being set up in Northern Ireland, after many years when none was established. Analysis by Co-operatives UK in the early part of this decade found that co-operative enterprises in Northern Ireland contributed £35.6 billion to the UK economy—that is over a period of time, but it is still a massive amount of money.

I want to highlight a couple of examples to showcase the growing strength and vibrancy of the co-operative and mutual sector in Northern Ireland, because sometimes society does not appreciate what co-operatives do. The hon. Member for Stroud (Dr Drew) referred to agriculture. As a Member who represents a largely rural constituency, I know how crucial co-operatives have been to the size and success of our local dairy industry. One example is Lakeland Dairies, which has a factory in Newtownards, the main town in my constituency, and employs more than 220 people there. It is part of a cross-border co-operative business that processes 1.8 billion litres of milk a year. It has two factories in Northern Ireland and two in southern Ireland. The co-operative model has served the farmers, who are its members, well down through the years—they contribute to its policy and vision—providing them with an outlet for their production and, importantly, a say in the overall direction of the business. All that experience and knowledge points to the direction we need to go in.

Perhaps the single best example of the increasingly strong and vibrant co-operative and mutual sector in Northern Ireland is our credit union movement, which is massive. I will give some figures because I am not sure that all Members realise just how important credit unions are in Northern Ireland or the massive contribution they make. Credit unions are, of course, common to all parts of our United Kingdom, but they have woven themselves into the fabric of society in Northern Ireland in a way that has not happened elsewhere across our nation. Credit unions are a feature of my constituency, as we now have three or four of them. When one of the branches closed down in Greyabbey, a village just down the road from where I live—I opened accounts there for my three boys many years ago—it integrated with the branch in Newtownards.

People such as my old running mate Tommy Jeffers in Dundonald have given a lifetime of hard work to establish, run and expand credit unions across Northern Ireland. He was the instigation and strength behind that credit union, and although he is now in his mid-70s and no longer a councillor—that is how I first got to know him, as well as through party connections—he is still involved in it. The movement has been built by hundreds and hundreds of hours of work by volunteers. They have made a massive contribution.

[Gareth Thomas]

One credit union that spoke to me ahead of the debate wants to open more branches on the high street, to help plug the gap left by mainstream bank branch closures, and it wonders aloud whether the Government might be sympathetic to the idea of extending business rates relief to credit unions seeking to open business branches. Does the hon. Gentleman think that could also help facilitate the greater spread of the credit union movement in Northern Ireland?

[Jim Shannon]

I thank my honourable colleague for that intervention. I am sure that the Minister is listening and hope that he will take on board that suggestion, which could be very helpful. I wholeheartedly support that suggestion. This is not the Minister’s responsibility, but I have had discussions with other Ministers about help with high street rates.

It should be borne in mind that credit unions are for their members. The members invest their money to lend their money. It is a fantastic opportunity, and a fantastic example of how lending should be looked upon. The big banks should note that example. It should not be all about dividends for shareholders; it should be about the customers—those who are involved.

The Northern Ireland movement is massive in comparison with its counterparts in Great Britain. Statistics collated by the Bank of England in each quarter show the scale of credit unions in Northern Ireland in comparison with that of their counterparts in the rest of the United Kingdom. Of the 437 registered credit unions in the UK, 145 are located in Northern Ireland. A third of all adult credit union members in the UK are in Northern Ireland, and four in 10 juvenile members are from Northern Ireland. We are encouraging our young people to open accounts early—although, to be fair, that will probably be done by their parents or, perhaps, by their grandparents, who open accounts for them to start them off. It is good to encourage young people to be part of a bank, to save money, and thereby to see the benefits of credit unions. As I have said, it is a fantastic opportunity. If Members have not had an opportunity to investigate or gain knowledge of what is happening in Northern Ireland, I suggest that they should.

Jain Community: Contribution to the UK

Debate between Gareth Thomas and Jim Shannon

Wednesday 1st May 2019 Westminster Hall

[Gareth Thomas]

I am grateful for my hon. Friend’s intervention and for his work on the all-party group. When I visited the Potters Bar temple last June, its trustees were at pains to point out the difficulty of getting visas for stonemasons to come and help with the extension. I hope to come back to that issue and, as my hon. Friend suggests, press the Minister for help with getting the Home Office to be a little more reasonable.

The Potters Bar temple is magnificent. It was built with ancient techniques and crafts. No steel was used; 1,300 tonnes of Indian marble from Makrana were shipped to London after being beautifully carved by more than 450 specialist craftsmen. Almost 6,000 carved pieces were used, including for the amazing intricate ceiling of Indian marble, which was assembled like a giant jigsaw puzzle in just 15 months. That is why stonemasons need to be brought in from India, with the specialist expertise to which my hon. Friend rightly referred. I have also had the honour of visiting the Jain temple in Kenton, which is slightly nearer to my constituency and is attended by many Jains who live in Harrow West.

Jainism was founded in the 6th century BC. Jains trace their history through a succession of 24 Tirthamkara, or enlightened teachers.

[Jim Shannon (Strangford) (DUP)]

The hon. Gentleman always brings topical and important subjects to this Chamber, and I am usually here to support him. Does he agree that the 65,000 Jains who live and work in the UK, including in Northern Ireland, are more than welcome, and that their religious view must be respected at every level by every person in all the regions of the United Kingdom of Great Britain and Northern Ireland?

[Gareth Thomas]

The hon. Gentleman makes an important intervention about the need for respect for the Jain community. He is right that there are Jains in Northern Ireland too; I am sure that they will have appreciated his intervention.

The first Tirthamkara was Rsabhanatha, who lived millions of years ago; the 24th was Lord Mahavira, who lived in about 500 BC in what is now Bihar in modern India and was a contemporary of the Buddha.

There are three major principles that most Jains recognise. The first is ahimsa, which my hon. Friend the Member for Ealing North (Stephen Pound) mentioned; it enshrines non-violence to all life in thought, word or deed. The second is aparigraha, which requires Jains to minimise their environmental impact through the non-acquisition of material goods; it discourages them from employment in sectors such as mining that can have a negative impact on the environment. The third principle, anekanta-vada, promotes tolerance through the acceptance of a multi-sided view of reality; it encourages the recognition that others have a right to their own point of view.

The principles of Jainism are believed to have inspired the idea of non-violent protest. Mahatma Gandhi was certainly aware of them; he spoke of his debt to Jainism. The principle of non-violence has led Jain culture to be vegetarian, and indeed often vegan, with fasting observed by many at key points in the year. In April and October, followers of Jainism mark Ayambil Oli, a biannual weekly festival of prayer and limited diet that celebrates discipline, austerity and self-control. In August and September, the Jain community celebrates Paryusan, an eight-day festival of fasting, prayer, repentance and forgiveness. Lord Mahavira’s birth is celebrated in April, and his final liberation is celebrated during Diwali in October and November.

I pay tribute to the Institute of Jainology, which provides the infrastructure to support Jain communities throughout the UK.

Catholic Sixth-form Colleges

Debate between Gareth Thomas and Jim Shannon

Tuesday 5th March 2019 Westminster Hall

[Gareth Thomas]

I should not have allowed the hon. Gentleman to intervene, because he has stolen a line from later in my speech, but he makes a good point and I will return to it later.

[Jim Shannon (Strangford) (DUP)]

I apologise to the hon. Gentleman for being unable to stay and make a speech in this debate—I have a meeting with a Minister—but I want to make this point. Does he agree that, given the fact that schools are increasingly becoming secularised, parents must have the option to have their child educated with faith as a cornerstone and to have an input into spiritual teaching, and that the Government cannot and must not ignore this point but instead must take it into consideration when allocating funding? Spiritual education is so important in this day and age.

[Gareth Thomas]

I recognise the continuing and strong support for spiritual education, and it continues to be a striking feature of many of our communities that there is strong support for faith schools. In the context of the debate, there is strong support for this Catholic sixth-form college, which inspired me to seek Backbench Business Committee approval for this debate, and I am sure that there is also strong support for the other Catholic sixth-form colleges across the country. The hon. Gentleman makes a good point.

[Jim Shannon]

To re-emphasise that point, when it comes to parents seeking a school for their children to go to, it is so important that they have a choice between secular teaching and faith-based teaching. When it comes to funding and assistance, we obviously look to the Minister for some support, but it is important that people have that choice and that that choice is available in Members’ own constituencies as well.

[Gareth Thomas]

The hon. Gentleman makes an important point about choice. I suppose the essential point of this debate is to say that there needs to be a level playing field in funding. A child who wants to go to a certain type of school or college should not see that there is better funding for one particular institution than there is for another down the road. I am sure that is a point he will agree with.

Water Industry

Debate between Gareth Thomas and Jim Shannon

Tuesday 22nd January 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this debate. Ofwat imposes no penalties on managers who break their commitments. Does he agree that legislation must be put in place to ensure that—after loading Thames Water with debt and flooding the Thames valley with excrement—the water body faces more than just a fine that is less than the amount it would take to dispose of the water in the appropriate way? In other words, the fines do not match the crime.

[Gareth Thomas]

The hon. Gentleman makes an extremely good point. Given that we are in the middle of the latest pricing review, if Ministers had the gumption they could put pressure on Ofwat to use its existing powers to bear down on those exact issues. I agree with the hon. Gentleman’s general point that we need a full review of the powers available to Ofwat. I am sure that they need to be increased.

Thames Water’s credit rating is the worst in the industry, according to Standard & Poor’s. Thames Water’s tax bill also declined during the period in question, as it regularly paid no corporation tax on its £1.8 billion turnover. Thames Water is, by its own admission, failing to meet targets to reduce the number of properties experiencing chronic low water pressure; failing to reduce the number of complaints; and wasting almost 700 million litres of water annually through leakage. It is failing to meet basic standards in 17 out of 41 key areas. That dismal record also includes record fines for poor performance.

In comparison, Scottish Water, which is publicly owned, has debt levels 5% lower than 17 years ago; its interest payments have remained consistent; and, with no dividends having been paid out, all the profit has been reinvested. It is worth pointing out that, adjusted for leakage per kilometre of pipes, Scottish Water performs just as well as an average English company, with 10.2k litres of leakage per kilometre as opposed to 22.1k for Thames Water, 10.8k for United Utilities and 9.5k for Yorkshire Water.

Thames Water is not alone in poor performance. In truth, more than 20% of all water is currently lost through leakages from water pipes. In total, it is estimated that some 7.5 trillion litres of water has been lost through leakage, which is equivalent to the total volume of water currently in Loch Ness.

Capital Needs of Co-operatives

Debate between Gareth Thomas and Jim Shannon

Wednesday 25th April 2018 Westminster Hall

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

I beg to move,

That this House has considered capital needs of co-operatives.

It is a privilege to serve under your chairmanship, Sir David. It is a particular delight to be able to talk co-operatives with the Treasury Minister twice in two days. For those of us who want the co-operative and mutual sector of our economy to double in size, fixing the difficulties that co-operatives have in accessing the capital they need to expand is critical. Co-operatives UK, the co-operative movement’s trade body, has done an excellent job in recent years of championing community shares as one way for local co-operatives to raise significant but comparatively small amounts of capital to grow. Lottery money is currently being used by Co-ops UK’s community share unit to support community shares offers, but more could be done if the Government renewed their previous interest in this area. It would be good for Ministers to explore what else they can do to encourage the further expansion of community shares.

More recently, Co-ops UK, working with retail co-op societies, has begun to explore whether fixed-term withdrawable share capital could be developed, allowing more established societies to raise patient and engaged equity finance from members and non-member investors, up to a £100,000 maximum individual shareholding limit. The Financial Conduct Authority does not always get a good press, but it has been very supportive of that work, and I hope the Minister will encourage the FCA and Co-ops UK to continue to champion that new potential source of capital for many co-operatives. The chief executive of Co-ops UK, Ed Mayo, deserves praise for his skill in getting this work so far down the road.

Other parts of the co-operatives and mutuals sector of our economy—notably building societies, friendly societies and mutual insurers—have been subject to legislative changes permitting them to raise much larger amounts of additional capital. These reforms are yet to apply to the co-operative world.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for allowing me to intervene—I sought his permission to do so beforehand. Does he agree that co-operatives should be allowed to invest in social housing? It is the very essence of what a co-operative seeks to do. Benefits are involved. I gently suggest that the Minister should consider revisiting the ability of co-ops to invest capital funds directly in social housing.

[Gareth Thomas]

The hon. Gentleman makes an extremely good point. If he can use his not inconsiderable influence on the Minister to support what I will say, we might be able to accelerate the addressing of some of the problems co-ops face in investing in social housing. Unless co-operatives can raise additional capital, they cannot expand or develop to their true potential. At worst, they are at risk of demutualisation, as I will set out. Co-operatives do not issue shares in the same way as investor-owned companies—to do so would mean demutualising—so bigger co-operatives can face considerable difficulties raising additional capital at the level they need. Their growth inevitably is limited and their ability to compete on equal terms is reduced.

In short, legislation is needed to fix this problem—legislation that protects that unique governance model of co-operatives, but allows them to issue permanent investment shares. Such shares could allow consumer co-ops to grow by acquisition and by developing new business offers for their customer members. Football supporter-owned clubs could fund the development of new stadium facilities, grow their businesses, serve their communities and consolidate their income streams. Co-operative-owned energy generators could attract long-term investment to build even more energy infrastructure of the sort we need in this country. A lack of capital limits a co-operative’s growth and ability to develop new services. The growth rate of that co-operative is constrained by its relative inability to add significant capital through retained earnings.