Co-operatives and Mutuality

Stella Creasy Excerpts

Thursday 30th June 2011 Westminster Hall

[Jesse Norman]

It is a disappointment that UKFI has not published its thinking on that even in outline. The calculations are not enormously complex. There is, of course, a further political issue, which has to do with the return of cash to the public Exchequer at a time of extreme economic crisis, but one still hopes that something of the form of the mutual ethos can be retained in the new organisation when it is ultimately sold.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I wonder whether, like me, the hon. Gentleman is disappointed that the Government have not considered the proposal for a payback to the taxpayer. Perhaps he will join me and other co-operatively-minded MPs to challenge the Chancellor to re-examine the issue, because of the benefits that could accrue from the mutualisation of Northern Rock.

[Jesse Norman]

I am not absolutely sure I understood the thrust of the hon. Lady’s intervention. It seems to me that there is an important issue in relation to the publication of the decision that has been made. It is quite right that there should be a public justification of the decision not to proceed with the mutualisation. One would like further progress to be made on retaining the mutual ethos. I am not sure how much further work there is to be done on it.

[Stella Creasy]

I am afraid I have a foggy head, but my mind is clear on this. The Co-operative party has submitted a proposal to the Government about paying back and the mutualisation of Northern Rock. I ask the hon. Gentleman again whether he will combine with me and other co-operatively-minded MPs to press the Chancellor to respond to that document, which he has not yet done.

[Jesse Norman]

I am afraid I have not the foggiest clue what paying back means. To whom will something be paid back, and out of what, under the proposal?

[Stella Creasy]

Perhaps if the hon. Gentleman agrees that it is worth considering models of remutualisation for Northern Rock, which would examine the payback to the taxpayer through the remutualisation process, he will meet us to look at how to progress that, and not lose the opportunity that mutualising Northern Rock would present.

[Jesse Norman]

I am of course happy—if this is what the hon. Lady is asking—to meet her and other Co-operative MPs to discuss that, so that I can understand the proposal better. I do not know whether the hon. Lady was present when I intervened earlier, but there is a clear financial problem to do with the capital structure, the taxpayer value and the sustainability of a model that has a large vendor note sitting in it from the Government—that is a form of loan—and substitutes public ownership of equity with public ownership of a loan, which may be no more stable for less return. There is a genuine economic issue, and that is what we need to engage with.

I hope that we can come together as a House and a community of MPs, in a bipartisan way, to promote co-ops, change our public culture, develop and spread the co-operative ethos, and encourage the Government to push ahead with all the work they are doing so successfully, so far, in this area.