Co-operatives, Mutuals and Friendly Societies Bill

Mark Eastwood Excerpts

3rd reading
Friday 24th February 2023 Commons Chamber

[Mark Eastwood (Dewsbury) (Con)]

I congratulate the hon. Member for Preston (Sir Mark Hendrick) on bringing this Bill before the House, and also congratulate my hon. Friend the Member for Buckingham (Greg Smith) on listing pretty much every business in his constituency during his speech, which is quite the feat.

This is a really important Bill, and I want to cover some of the key points that make it so important, some of which have already been mentioned by other hon. Members and hon. Friends. It proposes a way for co-operatives, friendly societies and mutual insurers to grow and develop their organisations while maintaining their commitment to member ownership and control. That is important, as it will enable co-operatives to compete on a more even playing field with their corporate counterparts and increase their impact across all sectors.

The current legislation that governs the raising of capital by co-operatives is, as we know, somewhat inflexible. The Bill would enable co-operatives to raise more money by issuing equity shares that are repayable at the option of the society, rather than being withdrawable at the option of the members. By introducing repayable shares, the Bill would enable co-operatives to raise amounts in excess of the current £100,000 holding limit for withdrawable shares. It would also provide legal certainty as to whether co-operatives can choose to repay non-withdrawable shares. Those changes have the potential to lead to large, capital-driven co-operative societies raising millions of pounds or more each year in equity, which could then be used to invest in important initiatives, tackling issues such as decarbonisation, technology, and the current cost of living crisis. The Bill would enable co-operatives to secure increased investment while retaining their democratic structures and ensuring they work in the interests of their members, something that I know is of great importance to the hon. Member for Preston.

We need to talk about co-operatives and about the British co-operative movement, starting with its history. In 1844, on the other side of the Pennines, the Rochdale Pioneers founded the modern co-operative movement to provide an affordable alternative to poor-quality and adulterated food and provisions, using any surplus to benefit the community. That was the start of the modern co-operative movement; as my hon. Friends the Members for Aylesbury (Rob Butler) and for Buckingham mentioned, the movement has grown substantially since then, with 7,200 co-operatives employing 250,000 people, 14 million members, and a combined turnover of just under £40 billion. That is how big the modern co-operative movement has grown.

When we talk about the co-operative movement, people mainly associate it with retail. I have many retailers in my constituency, in Dewsbury, Mirfield, Kirkburton and Denby Dale. We have a large Co-op in Mirfield; we have a smaller one around the corner from me in Dewsbury, on Leeds Road, as well as one in Skelmanthorpe and one in Shepley. Those Co-ops are an important community asset for the larger towns and the small villages in my constituency. One thing I do have a quandary about is that in 2015, the Co-operative Group decided that it would carry on financial contributions to the Labour party, so that always puts me in a difficult position when I go into a Co-op retailer. Having said that, the lure of French grain vodka and the pork and chorizo pies far outweighs that concern, so I am happy to go in there, hold my nose and buy those items.

I take issue with my hon. Friend the Member for Aylesbury, who mentioned the man from the Pru. Many years ago, I was the man from the Co-op. Co-op Insurance Services provided an essential route to plan for funeral costs for people who were less wealthy, in a fairly similar fashion to the man from the Pru—but I have to say, I prefer the man from the Co-op, as I was at the time. The Co-op had penny policies. We would go around as financial services reps and collect pennies from people in their houses, which would provide for their funeral costs in the future. That has obviously expanded now, but people were literally giving me a year’s worth in advance—I would get 52 pence. If they were particularly well off, they would give me 10 pence a week on a four-weekly basis, which was £52 for the year.

That was really essential, and it shows that the co-op movement was providing funeral services for people and offering affordable burial costs, which, as we know, are really expensive. Co-op Insurance is now a multibillion-pound business that provides pensions, investments and essential services. There are various parts of the Co-op, such as banks, funeral services, which I have already mentioned, and travel services. This demonstrates the importance of the co-operative movement—despite, obviously, its association with the Labour party.

In conclusion, I commend the hon. Member for Preston for introducing this very important Bill, and I wish him the best of luck with it.