Co-operative and Mutual Businesses

Debate between Jim McMahon and Anna Turley

Thursday 27th June 2019 Commons Chamber

[Anna Turley]

I completely concur with my hon. Friend. We see a lot of passion and commitment for the co-operative sector and its values and principles in Wales, and we should be doing everything we can to allow people the freedom to develop those ideals with a supportive and co-operative approach from the Government.

I pay tribute to my hon. Friend the Member for West Bromwich West (Mr Bailey) who has worked with Ministers to try to persuade them of the need to lift unfair and unnecessary regulatory burdens on small and medium sized co-ops—we heard a great deal of detail about that today. Such burdens should not exist in the first place, and we should endeavour to remove them. One aspect of the co-operative growth agenda that comes up repeatedly within the Co-operative party and the co-operative movement is the need for access to capital, which many other types of businesses can access in a routine way, while co-operatives cannot.

Of course there is a difference in the way the co-operative business model operates, but I encourage the Minister to listen carefully to ideas for new capital instruments as they come forward. In some countries around the world we can see that new capital instruments have been put in place relatively easily, and they are both attractive and maintain the integrity of the co-operative model. For example, I recommend that the Minister look at the developments in Australia, which is leading the way on this issue.

A second aspect of assisting the co-operative sector to grow and develop concerns the development of co-operatives themselves. We often look at small and medium-sized business development and support, and regional and local infrastructures are in place to facilitate that activity. The amount and type of bank lending is often scrutinised, which helps, and specialist support is available for entrepreneurs. It is evident, however, that such support is focused on just one type of private business. There are great co-operative development professionals around the country, but sadly there are not enough, and nor is the infrastructure in place to focus on how to grow more co-operatives around the country. It is clear that we would benefit from a more rigorous and systematic approach to co-operative development.

The wider benefit of co-operatives and mutuals to our economy is clear, and new co-operatives are more likely to last into their second and third years than private small businesses. Too often, those giving professional business advice know too little about the co-operative model, and as a first point of call for advice and mentoring they are highly unlikely to suggest a co-operative approach. All that needs to change.

One route to achieving that, which has already been mentioned today, is through a co-operative development agency for England. Such an agency could be a starting point for advice or grants, and advise Governments on the type of public policy that would help to create an enabling environment for co-operatives. I hope the Minister will take that idea from this debate and work with the co-operative movement to ascertain the best shape and form for such an organisation.

[Jim McMahon]

I congratulate my hon. Friend on her appointment as chair of the Co-operative party; she is a fantastic choice. Is this not a win-win for Government? For a small amount of investment and energy, they could double the size of the sector. She will be aware that the Co-operative Group, the Nationwide Building Society and Co-operatives UK have recently revised up the figure for the value of co-operatives to the UK economy to £60 billion. Imagine what even a small amount of growth could do to the UK’s GDP.

[Anna Turley]

My hon. Friend is absolutely right. I pay tribute to his great history in the co-operative movement and everything he did while leader of the council. We have talked a lot about the social and values-based argument, but there is a huge economic driver here. My hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) mentioned the importance of keeping money in local economies, which is of huge benefit to them. We continually see it drain away, particularly in smaller towns, and co-operative economies could play a role in keeping money in local economies. There is a very important economic argument here for the Government.

Another issue I would like to raise with the Minister, which I hope he will look into further, is the shared prosperity fund. Co-operative organisations, including Co-operatives UK, Locality and the Plunkett Foundation, have a campaign called “Communities in Charge”, which calls for a shared prosperity fund to include targeted funding to ensure it is made available for people and in places that need it most; for local people to be able to scrutinise spending decisions through citizens’ panels; and for at least 25% to be controlled by local communities to spend on local priorities. This is a really welcome campaign and I hope the Minister will endeavour to look more closely at it.

In conclusion, I would like to make a point about the type of campaigning, work and activity that co-operatives add to our communities. It is in their DNA to go further than any other business type to add to, rather than take away from, the communities they serve. Their operation and their model lead them to lead campaigns on loneliness, modern slavery, food justice, fair tax, employee safety and community safety—to name just a few. Some of those areas have been championed by one of the largest consumer co-ops in the world, the Co-operative Group, which, I note, recently won the title of co-operative of the year. That is the difference co-operatives make and the wider benefit they bring. It is an inspiration for all of us here who want more. The smaller co-operatives fighting to compete in non-traditional sectors, co-operatives aimed at disrupting exploitative markets, and our larger co-operatives serving members and their communities so well are all part of the fantastic co-operative difference that we are proud to support today.