Co-operatives and Alternative Businesses: Local Authority Support

Peter Dowd Excerpts

Tuesday 20th June 2023 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

It is a pleasure to follow my hon. Friend the Member for Neath (Christina Rees). I also congratulate the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) on securing this important debate during Co-operatives Fortnight.

The economic system under which we live is creating extreme levels of inequality, poverty, suffering and hardship, and the private profit motive is benefiting a tiny few at the expense of the majority of people in the United Kingdom. After a decade of Conservative austerity, public service cuts and the current cost of living crisis, we urgently need fundamental societal change to deal collectively with the social and economic crises that we face.

I genuinely and firmly believe that co-operatives—which are “people centred” to realise

“common economic, social, and cultural needs and aspirations”—

have a critical role in shaping the alternative economic system that this country urgently requires.

As my hon. Friend the Member for Neath already outlined, Wales has a strong culture of co-operation, and many of the first co-operative societies were established in Wales. Indeed, the socialist Robert Owen is credited with inspiring and founding the co-operative movement in the UK. In my constituency of Cynon Valley, the first co-operative society in Wales—the Cwmbach co-operative—was established in 1859. It was founded to collectively alleviate the extreme poverty experienced by the community as a result of the miners’ strike back in 1857. Since that time, co-ops have had a growing presence in Wales with a wide variety of functions and, thanks to organisations such as Cwmpas, they now contribute £3 billion to the Welsh economy. That is no small change; that is a massive, significant contribution.

We are fortunate in Wales that the Welsh Government actively support the co-operative sector and are building an economy that prioritises wellbeing and resilience. Legislation like the Well-being of Future Generations (Wales) Act 2015 and the recently passed Social Partnership and Public Procurement (Wales) Act 2023 are models of facilitating that co-operative approach, as is the Welsh Government’s recently announced £1.7 million funding a year for the next two years to help businesses transition to employee ownership and help develop new social enterprises. Community energy projects will benefit from the Welsh Government’s publicly owned Ynni Cymru energy provider, which the shadow Climate Minister, my right hon. Friend the Member for Doncaster North (Edward Miliband), continues to champion in this House through GB Energy.

In addition to the Welsh Government, there is a significant role for councils. As Professor Neil McInroy of the Centre for Local Economic Strategies has said, we need

“a new conception of the local state”

that conceives

“the local state as a facilitating institution that empowers, coordinates and upscales social innovation from community organisation and social enterprises.”

I have been fortunate enough to do quite a lot of work with Neil and many of the trade unions in the UK to develop the building of a community wealth-building approach in the co-operative movement, which I will come to shortly.

Since I was elected to this House, given the horrendous impact of austerity, the cost of living crisis and the pandemic on people in my Cynon Valley constituency, I have prioritised working with the local council, other organisations and, crucially, local people to develop a co-operative and community wealth-building approach. I am truly determined that not only can we and should we create wealth in our communities, but we have to retain that wealth in our communities, unlike during the mining industrial revolution where we produced all the wealth in the south Wales valleys and other valleys and communities throughout the UK, but the wealth was extracted out of our communities. That cannot happen again.

My local authority, Rhondda Cynon Taf County Borough Council, and its community development team, with people like Simon Gale, have significant experience of working with and supporting co-ops and community-based enterprises. One example of how it recently worked was with the Coalfields Regeneration Trust opening a facility called Hwb Cana in Penywaun, where I used to work as a community development officer many years ago. It will function as a skills and training centre for local residents and will house Smart Money Cymru Community Bank, which will enable local people to access loans and other financial services and is similar to the credit union movement that has spread throughout the UK.

There is much more that can be done and, with that in mind, one of the first things I did when I was elected was to commission independent research by the Bevan Foundation think-tank in south Wales to assess how it is possible to transform the economy of Cynon Valley, taking a grassroots, bottom-up approach. The report produced around 17 recommendations, ranging from having a joint procurement strategy using local supply chains and bottom-up town centre regeneration to delivering a real living wage and a Cynon Valley-wide co-operative. To achieve each recommendation, we have set up a number of working groups to turn them into real action and change.

The purpose of the co-operative, which will be in the form of a development trust, is

“to stimulate community-based enterprises, with a strong focus on the green economy.”

Without a doubt, we are living in a climate crisis and notwithstanding the significant challenges and risks, we have many opportunities, particularly in Wales with our topography and green environment, to really develop grassroots, co-operative and community-owned initiatives to tackle that crisis.

We have secured funding from the Welsh Government to undertake a feasibility study into the Cynon-wide co-operative and we are currently considering that report’s findings. It is a really exciting time in the valley and there are lots of opportunities there. Indeed, there was overwhelming agreement that a development trust would play a critical role to assist the economic and social revival of Cynon Valley and its long-term sustainability, which is key to any developments.

I will finish by mentioning Tyrone O’Sullivan. He is a hero of mine, and I had the privilege of attending his funeral yesterday. He was a miners’ leader and a real giant of the trade union and Labour movement, but he also put co-operation into practice. His leadership and vision led to the miners’ buy-out of Tower colliery back in 1995, when miners used their redundancy money to purchase the mine. It was a huge success and made in excess of £11 million in profit in the first three years alone, so it was a brilliant example of worker ownership and the potential of co-operatives.

Going back to where I started, co-operatives must be part of a much wider transformative change and must be placed in the wider context. Tyrone really did have a clear vision of the need for that societal change to give young people a future and to build and develop our communities. He showed that change can happen and that people can take control of the wealth in their communities and make sure that that wealth stays there. That vision remained part of Tyrone. I was privileged to have met him in recent weeks, when we had a long discussion about politics, socialism and the need for societal change. He spoke about the power that lies in our working-class valley communities to effect the change required to achieve—for me and for Tyrone—a socialist society.

The south Wales valleys have been at the forefront of change in the past and we can, and will, be at the forefront of change again. Co-operatives, with the co-operation of councils, have a fundamental role to play, turning that vision—and in his memory, Tyrone’s vision—into reality. Diolch yn fawr.

[Peter Dowd (in the Chair)]

Just to alert people, there are likely to be a number of votes. If that is the case, we will adjourn for 35 minutes.