Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Peter Gibson Excerpts

2nd reading & 2nd reading: House of Commons
Friday 11th September 2020 Commons Chamber

[Peter Gibson (Darlington) (Con)]

It is a pleasure to follow my neighbour and dear friend, my hon. Friend the Member for Sedgefield (Paul Howell).

I am grateful to be given the chance to speak in this debate. I share the passion of the hon. Member for Cardiff North (Anna McMorrin) and her commitment to ensuring that our green development is beneficial to our society, communities and constituents. Redeemable green shares to external investors are certainly an interesting prospect. In principle, I share the hon. Lady’s desire to support the mutual sector in the development of new green finance initiatives.

However, I remain unpersuaded about the merits of redeemable shares, and I am concerned that this Bill could open up risks for consumer protection and the integrity of the co-operative model. As we have heard from many on the Conservative Benches, green bonds have a tried and tested track record, and I pay tribute to the excellent insight provided my hon. Friend the Member for Grantham and Stamford (Gareth Davies). I cannot in good conscience support a Bill that risks undermining the phenomenal work that co-operatives and mutuals do in my constituency and in the north-east.

I want to reassure the House that I support the work of the co-operatives, which have a strong track record on delivering across the UK. I understand the all-party parliamentary group on mutuals has found that they generate over £130 billion of income each year, supporting community-owned pubs, high street retail and fan-owned football clubs, which is a truly phenomenal achievement.

If you will allow me, Mr Deputy Speaker, I will first focus on the financial aspects of the Bill, before moving on to its environmental concerns. It is wholly necessary for companies and co-operatives to have access to capital and credit as the lifeblood of their entity, but green bonds would provide a much better model. In my constituency of Darlington, many co-operatives are run on a mutual ethos that in part came through the town’s Quaker heritage. From the Harrogate Club in the north to the Hummersknott Allotment Association in the south, the benefits of local co-operatives are clear locally.

Recently, I have engaged with many of my constituents from Darlington FC supporters’ group, who have lobbied me on behalf of their much-loved fan-owned mutual club. I am glad that in that case I was able to work constructively on their behalf with the National League to assist the club with the uncertainty ahead of the new season, and I wish them well for this Saturday’s friendly away game in Scarborough.

Across the north-east, clubs and pubs remain at the heart of communities. With the unprecedented challenges the hospitality sector has faced over the past few months, I am all too aware that co-operative clubs in Darlington need support now more than ever. The phenomenal eat out to help out scheme and the unprecedented level of government support have allowed many of these clubs and pubs in Darlington to bounce back from the impact of the lockdown. It is vital that the Government do not take drastic action at this point that risks undermining the position of these clubs at the heart of my Darlington community.

I am concerned that, if the Bill were to pass, businesses in the mutual sector might unwittingly enter into a situation where they are exploited as investment businesses. Beyond this, many co-operatives might be lured into exploitative schemes where they are put at great risk because of the ethical implications attached to these complex shares. I am aware that the Bill intends to include safeguards to prevent such issues by amending the Co-operative and Community Benefit Societies Act 2014; by introducing limits on the voting rights of investors in the event of liquidation; by limiting the ability to vote for demutualisation; and by enabling societies to remove the right to vote for conversion into a company. While I acknowledge these safeguards, introduced following the hon. Lady’s work with Co-operatives UK, I believe that the risk remains too high.

I am confident that the Government have already provided a firm, pragmatic approach to tackling climate change while protecting businesses, jobs and communities, as outlined in the Government’s green finance strategy 2019. In my short time in Parliament, I have had the privilege to support this Government as they have taken steps to support sustainable, community-led green economic growth, including by granting greater power to local authorities in this matter.

[Marco Longhi]

Does my hon. Friend agree that the green bonds that my hon. Friend the Member for Grantham and Stamford (Gareth Davies) described would be a more targeted and risk-averse approach? Does he also agree that as we come out of this pandemic the House’s priority should be to do so in an inclusive and green way and that the plan that Andy Street, for example, has set out for the west midlands for inclusive growth with a green agenda is an example of that?

[Peter Gibson]

My hon. Friend raises an important point about the strength of communities represented by Conservative directly elected Mayors. I, too, represent a constituency that falls within a combined authority area that has an excellent Conservative Mayor leading the way on green initiatives.

[Ben Everitt]

The House recognises, of course, that risk needs to be carefully considered and avoided, but as my hon. Friend has so eloquently pointed out in what I think today is a home game for him, risk often has potential upsides and benefits, not only for investors but for wider society.

[Peter Gibson]

My hon. Friend, too, highlights the excellent contributions this morning from our hon. Friend the Member for Grantham and Stamford.

The Conservative manifesto that I and my right hon. and hon. Friends stood on made ambitious commitments on the environment, many of which placed the emphasis on community-driven initiatives. It is right that this Government, and any future Government, be held to account over their environmental duties. These will include meeting the net-zero target by 2050 and the long-term, legally binding targets on biodiversity, air quality, water resources, and waste and efficiency that will be established under the Environment Bill.

In the 25-year environment plan, the Government committed to developing a nature recovery network, and in the long term, to creating and restoring 500,000 hectares of wildlife-rich habitat outside existing protected sites. A new framework for community-led nature recovery strategies will also be legislated for in the Environment Bill, to support the nature recovery network and better direct investment into the environment and green infrastructure, creating places that are richer in wildlife and provide wider benefits for local communities. The Government will also establish the £640 million nature for climate fund, which will be used to dramatically increase community-led tree planting schemes in England. Indeed, more than 40 million trees will be planted to bolster carbon capture. More research is currently being undertaken into the most appropriate species to plant across the country.

In the 2020 Budget, the Government’s record of supporting green business was made clear. I am grateful to the Chancellor for outlining a £552 million fund for consumer incentives for ultra-low emission vehicles and a reduction in taxes on zero-emission vehicles. In the Tees Valley, our excellent Conservative Mayor, Ben Houchen, has led on hydrogen-powered vehicles—from cars, buses, trains and lorries to e-scooters—and sustainable, community-driven economic growth. It is clear that, over the coming years, the Tees Valley will become a shining beacon of how businesses can sustainably grow, with the right legislative backing, to pursue local policy for local people. Teesside is also leading the way in carbon capture and storage through Net Zero Teesside, a huge intervention, with global companies coming together to address the green agenda.

I understand that the Government have already responded to the concerns of those in the mutual sector by taking steps to review our current regulatory arrangements. The Treasury is reviewing the regulatory arrangements that are in place for the issuance and marketing of non-transferable debt securities such as some mini-bonds. I look forward to the outcome of the review, and I am assured that Ministers will give appropriate consideration to the creation of any capital instrument with similar characteristics to mini-bonds.

Similarly, I welcomed the Chancellor’s announcement in the 2020 Budget that the Government would bring forward legislation to allow credit unions the opportunity to offer a wide range of products and services. Credit unions are a form of financial mutual, and I am proud to support the fantastic work of the Darlington Credit Union. I hope that the hon. Member for Cardiff North welcomes that news, as I am assured that it will help us to continue to grow sustainably over the longer term, while providing a pivotal role in financial inclusion over the coming years for the mutual sector.

[Dehenna Davison (Bishop Auckland) (Con)]

Co-operatives UK produced a report in 2019 which said that the north-east has the highest number of co-operatives per head of population. Does my hon. Friend agree that getting the policy on co-operatives right is even more vital for the north-east and the areas that he and I represent?

[Peter Gibson]

I am grateful to my hon. Friend for her intervention. She is a strong champion for all that is great about the north-east, and I welcome her contribution.

I recognise the phenomenal contribution of co-operatives to our diverse economy. However, I cannot support this Bill. My hon. Friend the Member for Christchurch (Sir Christopher Chope) got to the nub of the issue—this is not a green Bill; it is a Bill to change the laws around co-ops to the detriment of their members.