Tuesday 21st October 2025

(1 day, 22 hours ago)

Westminster Hall
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[Karl Turner in the Chair]
14:30
Jim McMahon Portrait Jim McMahon (Oldham West, Chadderton and Royton) (Lab/Co-op)
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I beg to move,

That this House has considered Government support for the co-operative sector.

It is a pleasure to serve under your chairmanship, Mr Turner, in this important debate. I pay tribute to those leading this great movement in our co-operative societies, our mutuals and the Co-operative party, of which I am proud to be the chair. My thanks go to the national executive committee and to our general secretary, Joe Fortune, and his team for their tireless work in growing and strengthening co-operation across the United Kingdom.

This year, as we mark the UN International Year of Co-operatives, it is fitting to reflect on the difference that co-operation makes, and the extraordinary opportunities available to us. The roots of our movement run deep, back to 1844 and the Rochdale pioneers: 27 working people who, through solidarity, challenged exploitation and built something that was lasting. Their values of open membership, democratic control, member participation, autonomy and education all remain a living framework for economic democracy today. If their call to give working people power and a voice was important then, I think we can all agree that that call is ever more urgent today.

Liam Conlon Portrait Liam Conlon (Beckenham and Penge) (Lab)
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As my hon. Friend will know, the co-operative movement is a pillar of ethical business in Britain—owned by its members, rooted in its communities and committed to fairness. It includes the multiple Co-op stores that we have in Beckenham and Penge, which not only provide good jobs and affordable food but reinvest in local causes. Does he agree that it is important that we champion and expand co-operatives as part of building a fairer, more democratic economy?

Jim McMahon Portrait Jim McMahon
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I think a lot of people in Britain feel as though it does not matter what they do, how hard they work or how big their contribution is; they are just not able to make ends meet or get on in life. The communities where they live have been incrementally eroded and hollowed out, and they do not feel like they are getting on and doing well.

The founding principle, if we take ourselves back to Rochdale and towns like Oldham, where this is part of our heritage, history and identity, was a sense that if we build something together, we share the dividend that comes from it—that we redistribute the value that we create in order to build an even stronger community. I think we observe a country and economy where the wealth that we create is taken off to foreign lands and international investors more than it is reinvested back in the local community. Co-operation is of course about power, but it is also about place and identity, and the co-operative movement is central to that.

Paul Waugh Portrait Paul Waugh (Rochdale) (Lab/Co-op)
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My hon. Friend kindly mentioned Rochdale and its proud history in 1844 of the Rochdale pioneers founding this global movement for social justice. It is still a movement that is alive and kicking today. It is not a relic, as is evidenced by the Metro Moneywise credit union, which celebrated its 35th anniversary last week in a town hall ceremony in Rochdale at which I was pleased to be present. Does my hon. Friend agree that the most important point is that the Labour party has agreed to double the size of the co-operative economy, and that the whole of Government needs to get stuck in to achieve that—not just the Treasury, and not just the brilliant new unit in the Ministry of Housing, Communities and Local Government, the co-operative development unit, but every part of Government?

Jim McMahon Portrait Jim McMahon
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If it is to work, the whole of Government has to own this agenda. It is important that the Treasury and the Department for Business and Trade take a leading role, and of course, the community anchor in the MHCLG is important too, but the truth is that communities function in a dynamic way, and every bit of Government across health and social care, education and our school system, and everything else that Government have oversight of, comes into play. I absolutely agree that if we want to double the size of the co-operative economy, and for that to be felt in every part of the country, the whole of Government has to own that agenda.

Across Britain, too many people feel that the economy no longer works for them—that decisions that shape their lives are made far away by investors they will never meet and for reasons they do not agree with. We see the results in hollowed-out high streets, in local businesses that are bought and closed by distant investors, and in a growing sense of powerlessness. If we want to rebuild trust in politics, we must rebuild trust in the economy alongside it. That means giving people real ownership and control over the businesses that shape their lives, because ownership matters; that is exactly why those with wealth fight to keep it. We want more people to benefit and to have a stake in the future.

The good news is that the UK’s co-operative economy is thriving. Today there are 7,400 co-operatives, with 16.6 million members, and 240,000 employees working hard in their communities. Together they span retail, housing and agriculture, and beyond that, of course, social enterprise, creating decent jobs and trying to provide food and shelter for millions of people in this country.

Going further, our 42 building societies, owned by their 27 million members, contribute £7.2 billion to the UK economy. They account for nearly a third of UK mortgages and maintain over a third of all bank branches. Of course, as my hon. Friend the Member for Rochdale (Paul Waugh) said, our credit unions serve their 2.3 million members and hold nearly £5 billion in assets. Do people know that there are more members of building societies and credit unions than there are people who voted in the last general election? This is not a fringe part of the economy; it is absolutely foundational.

After years without a mutual bank presence on the high street, the recent acquisitions of Virgin Money by Nationwide and of the Co-operative bank by Coventry building society mark a welcome return of mutual principles to mainstream banking on the high street. Employee ownership is rising, too, from 600 employee-owned firms in 2020 to 2,500 today. That shows what happens when Government action aligns with co-operative values: co-operatives are more likely to grow and more likely to survive.

However, despite our proud history, the UK now lags behind other countries. If we are to fulfil our potential, the Government must create an environment that enables co-operatives to thrive.

Alex Sobel Portrait Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)
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My hon. Friend knows that for many years I worked in co-operative development, including running co-operatives in Yorkshire and the Humber. To start new co-operatives, particularly co-operative legal forms, is a complex business. Under the last Labour Government, there was a significant level of support on the ground for co-operatives: the co-operative enterprise hub; Business Link had social enterprise units; and other forms of support. Does he agree that we need to try to establish new forms of co-operative support on the ground for people who want to start and develop new co-operatives?

Jim McMahon Portrait Jim McMahon
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The fact is that those of us who believe in co-operatives as a movement and as a principle get it, but we can be quite selfish about it, and we quite enjoy co-operatives and mutuals being the best-kept secret in the UK economy. Well, I am sick and tired of their being a secret and I want them to be mainstream. When somebody is setting up a business in this country, I want them to look at co-operatives and say, “That is the obvious choice for us and for our community.” I do not want co-operatives to be a sideline any more.

That is why co-operative development agencies and the whole of Government approach are important. It is also why education, access to finance, the surrounding legislation and, of course, creating a level playing field so that co-operatives can thrive are all important, too. We need to mainstream the idea of co-operatives and spread it out. If we do that, the economy will benefit even more, because co-operatives are more resilient and survive longer than many other businesses, and they return more to the UK economy, which can be reinvested in the community.

The barriers to co-operatives are well known; my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) touched on some of them in his intervention. There is difficulty in accessing finance; obviously, there are issues around equity investment and the barriers that exist there. There is an outdated and fragmented legal framework, and there is limited awareness of co-operatives among banks, businesses and advisers, and even in Government itself.

So, I would be grateful if the Minister, when he responds to the debate, could update us on Government plans: first, to progress the Mutual and Co-operative Sector Business Council; secondly, to work to improve access to finance for co-operatives; thirdly, the Government’s response to the Law Commission’s review of the Co-operative and Community Benefit Societies Act 2014; and finally, the plan to establish the co-operative development agency within Government.

Beyond that, on building societies and credit unions, we need action on the Building Societies Act 1986 (Amendment) Bill, on fair limits for individual savings accounts or ISAs, and on reforming the common bond, so that more people can join building societies and credit unions.

On community ownership, we need clarity about the future of the Community Ownership Fund, so that local people can secure the assets that matter to them the most. On housing, co-operative models must play their part in delivering the Government’s promised ambition for 1.5 million new homes by providing homes that people do not just live in, but have a stake in. On agriculture, we should recognise that food security is national security, and support co-operation among farmers in the same way as the US Government do. This is about delivering a level playing field and doing what is needed to deliver on Labour’s pledge to double the size of the sector. Growth is critical, but growth must be shared by everyone who contributes, in every community across the country.

The co-operative model was born when ordinary people said that enough was enough, chose to build something better for themselves and their community, and recognised the benefit of the shared dividend that would follow. That same spirit of collective action is exactly what our country needs again. Last week, alongside Joe Fortune from the Co-operative party and Paul Gerrard from the Co-operative Group, I joined the Co-operative Group’s national members’ council in Manchester, chaired by Denise Scott-McDonald. The sense of purpose, partnership and hope was absolutely inspiring. People across the country want to do more to collaborate and to create new enterprises, not because it is fashionable but because it is instinctive to them. Let us make this the decade when co-operation again becomes a defining force in rebuilding Britain from the bottom up: politics done with people, as it always should be.

14:41
Jim Shannon Portrait Jim Shannon (Strangford) (DUP)
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It is a pleasure to serve under your chairship, Mr Turner. I thank the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this debate. The hon. Gentleman is right that co-operatives are incredibly important, including in Northern Ireland. I will give some examples from my constituency.

I am sold on the co-operative idea because it brings opportunity to those who might not have such opportunity in normal life, and it is really important that we do that. The co-operative sector is of course deeply rooted in local community and aims to reinvest in local services, to support goals and to help people elevate themselves from where they are to better, and because of that we should encourage it in every way that we can. I look forward to giving the local perspective from my constituents on how the co-operative sector goes above and beyond to help and train local people.

Our co-operative sector carries a wide range of economic and social benefits both for its members and for the wider community. Co-operatives are a worthwhile alternative to traditional business models. They give a different perspective, give a different opportunity and enable people to better themselves. In my Strangford constituency, they have an impact. We have the Newtownards credit union. The hon. Member for Oldham West, Chadderton and Royton mentioned credit unions and we have buoyant credit unions in Newtownards, Portaferry and Kircubbin.

The Newtownards credit union was established in 1993 and serves constituents throughout the Ards and North Down borough council area. The credit union is a member-owned financial co-operative, meaning that people living or working in the area can save and access loans. I remember when a credit union was started in Greyabbey, which then transferred to Newtownards. The first thing I did when my boys were younger was to start a credit union account for them, both to support the credit union and to give my boys an idea, at a very young age, about saving money—helping themselves while also helping others, because that is what co-operatives do.

The credit unions offer a wonderful service: a community-oriented alternative to commercial banking that retains financial value within the community. As we all know, community is at the heart of everything, as it should be and as this debate will indicate. Portaferry Cohousing undertakes fantastic work in housing and accommodation. Residents are involved in the design and the ongoing management of a small development and its communal spaces. That is crucial to the co-operative sector, as members collectively own and participate in the governance of their housing environment, rather than simply being tenants of a large developer or landlord. It is co-operatives at their best, doing what they do for their members and enabling them to be part of that.

Liam Conlon Portrait Liam Conlon
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I have always wanted to intervene on the hon. Member—the shoe is on the other foot. He mentions Portaferry; my dad is from there. It is where he was born, went to school and learned his trade as a carpenter before moving to Britain. The project the hon. Gentleman mentions is very special—it is the first cohousing project in Northern Ireland and I go there quite a lot. I have seen it; it is intergenerational, mixed-income and run by the community. Is not Portaferry Cohousing a fantastic example of how co-ops can keep decisions local, build trust and create housing, jobs and services that fully reflect the values and priorities of the local community?

Jim Shannon Portrait Jim Shannon
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I absolutely agree. I spoke to the hon. Gentleman beforehand; I was fairly sure that he would come up with a Portaferry connection to the debate, because he has family connections down there. I am very pleased to see him doing so well. He had to leave Portaferry to come here and do well, but those who stayed there are doing well too. I thank him very much for that intervention and wholeheartedly support it. He has summed things up really well. That is what Portaferry Cohousing does: gives people a vision for the future and a better place in life.

I also admire the work of the Ards community network, the third group I wish to speak about and one I have discussed in the House before. The network is a voluntary and community sector organisation that upholds and supports local community groups and facilitates training for development. It is truly wonderful. I am aware of the work undertaken by Cathy Polley, the lady who runs it, taking the time to instil co-operative values and shared goals for the betterment of the community. That is a third example of how co-operatives work so well in my constituency of Strangford, and indeed across many parts of Northern Ireland.

I understand that the Government have plans to double the size of the mutual sector. I am pleased at that news, as we must endeavour to encourage social value while also increasing business performance. Co-operatives UK has said that

“the planned changes do not go far enough in enabling the sector to raise finance”,

which may cause some problems. When the Minister responds, can he tell me what discussions he has had with co-operatives on this issue? Have the Government gone far enough, and if not, why not? First of all, as I should have done at the beginning—apologies for not doing so—I welcome the Minister to his place and wish him well in his new role. He is there because he is the right man for the job, and we all thank God for that.

There must be more financial backing for the sector, including for training and support systems to encourage more people to avail themselves of co-operatives’ services to protect their finances and communities. Co-operatives are a wonderful thing, and this debate encapsulates my feelings towards them and those of others who will speak shortly.

I conclude with this: the co-operative sector is a people-first movement rooted in fairness, equality and opportunity. In Northern Ireland, co-operatives offer real solutions—from finance to housing support. However, for this sector to thrive, Government support is essential through funding and education that recognise the challenges the co-operative sector can, does and will face. We can build a sector that is inclusive and resilient, where ownership is shared and voices are equal. I look to the Minister for a commitment that he will continue to do just that.

14:48
Jo Platt Portrait Jo Platt (Leigh and Atherton) (Lab/Co-op)
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It is an honour to serve under your chairmanship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for bringing this really important debate to the House.

I am immensely proud to represent the communities of Leigh and Atherton—towns that embody the very best of Britain, built on pride, kindness and hard work. They show what can be achieved when people pull together. We talk about co-operatives, but I also want to talk about social enterprise. Together, they form a broader movement of collective ownership, where people have a direct stake in the success of their community.

These models share the same DNA: accountability, reinvestment and a belief that decisions should be made for people, not just for profit. They are vital to building fair, resilient economies from the ground up. Time and again, I have seen that spirit in Leigh and Atherton—people rallying on Facebook groups to help neighbours; volunteers restoring heritage sites; and grassroots projects breathing life back into our town centres. That is why I stand here today championing the co-operative and social enterprise sector. This is not just about business; it is about community pride, regeneration and empowerment. Town regeneration is happening right now. The Government are making real progress through the English Devolution and Community Empowerment Bill, the pride in place programme and the Crime and Policing Bill, all of which were designed to revitalise our high streets and restore confidence in our towns.

However, none of that will succeed without local people leading the charge. In our area, we have seen exactly what that leadership looks like. In Tyldesley, For Tyldesley has helped attract investment and given local people ownership of their town centre. In Atherton, the Snug—a Music Venue Trust asset, led by grassroots music champion Rachael McEntee—is building a vibrant cultural scene from the ground up. In Leigh, Leigh Works is creating space for small businesses and digital innovation to thrive. These are not isolated examples; they are part of a growing movement of local ownership and community-driven success.

Co-operatives reflect the values that we hold dear: self-help, democratic ownership and giving back. Across housing, agriculture, energy and retail, co-ops provide long-term stability, inclusive employment and ethical business practice. They fill the gaps that the traditional models often leave behind. I have seen that first hand; it will be no surprise to anybody that I am going to mention Leigh Spinners Mill—I mention it often. During my sabbatical years, in between being elected, the once-disused red-brick giant has become a thriving hub of creativity and enterprise. Leigh Film Factory, which is based inside, born from an empty space, shows what happens when working class towns back creativity and reclaim their stories. That is community wealth in action.

Nationally, there are 131,000 social enterprises in the UK, with a turnover of £78 billion and a workforce of 2.3 million. They outperform traditional businesses in growth, innovation, job creation and reducing inequality. They also better reflect the country that they serve: they are in our communities, with more women and diverse leaders at the helm. These organisations align perfectly with the Government’s vision of local empowerment, encouraging communities to take ownership of their spaces and their futures.

However, as we have heard from my hon. Friend the Member for Oldham West, Chadderton and Royton, for many navigating the world of finance business advice and investment remain a challenge. We all recognise that these are complex areas, and progress requires co-ordination across Departments and sectors. That is why I welcome the manifesto commitment to double the size of the co-op and mutual sector and the forthcoming call for future evidence on co-operative growth. That is an opportunity to shape a joined-up approach that helps co-operatives, social enterprises and community interest companies to thrive. Supporting them means supporting our communities from the ground up, rebuilding pride, creating opportunity and putting ownership back where it belongs: in the hands of local people.

14:52
Andrew Pakes Portrait Andrew Pakes (Peterborough) (Lab)
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It is a pleasure to serve under your chairship, Mr Turner, especially as some of my earliest co-operative meetings took place in what is now Kingston upon Hull East, your constituency. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate.

One of the first visits that I undertook as a Member of Parliament was to 28 Long Causeway in Peterborough, home of my local Nationwide building society branch. It has been there since 1974 but it started its life in the city in 1954, a few doors down from its current location, as the Co-operative Permanent Building Society—at a time when Winston Churchill was the Prime Minister and the world was very different.

For a post-war generation, building societies and co-operatives were part of the new social contract—if they worked hard, they could get on in life, get a home and make a future for their children. The co-operative and mutual ideal has always been strong in the UK, but the idea of a purpose-driven economy feels even greater in today’s world. Against a backdrop of division, short-termism and populism, mutuals offer purpose and social value to our economy and communities. The co-operative and mutual sector is a vital part of the inclusive growth agenda of this Government, worth £93 billion in gross value added and £180 billion in turnover. Building societies have more than 27 million members.

Despite moves to demutualise the building societies in the UK—an act of economic vandalism by a previous Government—we still have more than 40 building societies holding nearly one third of UK mortgages. Nationwide, still standing strong in my city and many others, is the biggest lender to first-time buyers in the UK.

My constituency is home to the English Mustard Growers co-operative, which I often talk about. My constituency and that of my hon. Friend the Member for Norwich North (Alice Macdonald) supply the seed that goes into Colman’s mustard—many people will know the brand. I am pleased we have an agricultural co-op in Peterborough and our surrounding fenlands. It is an illustration that the mutual drive covers a wide range of industries, not just retail, as many will know.

More widely we see the return of co-operative ambition after a generation of consolidation. It is good to see that happening, with the Co-op Bank coming back into the mutual fold and merging with the Coventry Building Society; with Nationwide expanding with the takeover of Virgin Money; and with the Co-operative Group adding more members year on year. I join my hon. Friend the Member for Oldham West, Chadderton and Royton in paying tribute to my good friend Joe Fortune and also Shirine Khoury-Haq, chief executive of the Co-operative Group, for their sterling work on behalf of the movement.

We should all remember that the movement started many years ago from co-operative principles. A few months ago I attended the Co-op congress in Rochdale town hall with my hon. Friend the Member for Rochdale (Paul Waugh). Rochdale was the birthplace of a movement, with the power of 28 pioneers organising against the odds and today still a living force for social and economic justice in all of our communities. The Rochdale principles still stand tall in the world.

I am proud to be part of a Government with ambition for the co-operative sector: a clear commitment to double the size of the co-operative and mutual sector and to support social enterprises, as my hon. Friend the Member for Leigh and Atherton (Jo Platt) said. Such ambition has not been seen by Whitehall before. With ambition will come challenges. It is not the role of Government to build co-operatives, but it is the role of Government to ensure there is not a block to growth. Co-operative activity, as we have heard, spans many sectors and many Government Departments. With that ambition, we also know it will bring the challenges of how cross-Government working supports it. We know that sectors, which often work across Government Departments, struggle to find effective cross-Government working and effective time. So I welcome the announcement of a co-operative development unit as part of the Government’s pride in place plans.

Like my hon. Friend the Member for Leeds Central and Headingley (Alex Sobel), who is no longer in his place, I am an old lag of the movement who spent many years working in co-op housing and co-op development, so I welcome the fact that we now have something that will look at co-op development in housing and local government. But I say to the Minister that the unit needs to work with the Treasury, the Financial Conduct Authority and other Government Departments to deliver the reforms we need to support it.

Co-operation is living proof that our collective endeavour can be greater than our individual efforts. There is no stronger message for co-operation than the world we stand in today. We need to make sure that that message rings true in Whitehall, where all of these initiatives add up to something greater than their individual aims. These developments have happened as a result of the Government’s new focus, but it is up to all of us to ensure they deliver on those.

Finally, why does this matter? It matters because it is about ambition for our communities and also the kind of world and economy we want to live in. If this is the co-operative moment, as I believe it is, we also need co-operative ambition. We need to create the conditions in which mutuals can flourish and succeed, where communities can come together and start up their own ventures, and where destiny for our families and communities is not determined by shareholders or Government alone, but by the people themselves. This truly is a co-operative moment.

14:58
Alice Macdonald Portrait Alice Macdonald (Norwich North) (Lab/Co-op)
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It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate. Like him, I am proud to be a Labour MP and equally proud to be a Co-operative MP. I also thank Joe Fortune, the party’s general secretary, who has joined us here today. I pay tribute to the many co-operators across our constituencies. There are too many in my constituency to name, but in particular I pay tribute to Danny Douglas and Councillor Chrissie Rumsby, who work tirelessly to make the case for co-ops and to drive the practical changes we need.

Founded in 1917, the Co-operative party has for over 100 years been the bedrock of community-driven enterprise, shared endeavour and equal empowerment. In Norwich, our connection with co-operativism extends even further. It was in 1858 that Norwich formed its first co-operative society, embracing a movement that has shaped my city ever since. As co-operators, we recognise that there is more than one north star guiding business. A successful enterprise can be run not only by the largest shareholders in a boardroom, but through the democratic will of those who use the business, work for the business and provide for the business. Members of a co-operative seek prosperity for one another and the community they serve. These enterprises are not only enriched by their social contract; they are enriching our economy by exhibiting a resilience that surpasses other business models. In fact, co-operative businesses are twice as likely to survive their first five years, compared with businesses following other ownership models, so this makes economic sense, too.

It is therefore no surprise that the Government plan to double the size of the co-operative sector through their small and medium-sized business strategy, which I welcome. With growth being the Government’s No. 1 priority, now is the time for us to seize the opportunity of co-operativism and knock down the barriers holding it back. So many people think of the food store when they hear the word “co-operative”. Many of us shop there, and in fact, many of us campaigned with it for some of the changes we have seen, such as the crackdown on shoplifting.

Too few people know that there are co-operative ventures across virtually every sector, and we have heard about some of those today. They range from animal health to arts and culture, childcare, finance, energy, housing, telecommunications and tourism. There is so much more we can do to increase awareness of the opportunities of co-operativism, how to access them and, indeed, how to establish a co-operative. By virtue of being a member-run organisation, access to finance can be a particular challenge. That is important, and I hope the Government will consider all options to increase access to external investment among co-ops.

I also want to mention credit unions, which play a very important role. It is important to think about what co-operatives are, but also what they are not. I was just reading about Norwich’s Wherry Dragon credit union, which has won a national award for its campaign against loan sharks. Credit unions offer an important facility to many people in different areas. They are financial institutions owned by members living in the same area, working for the same employer or having a common bond, who all hold savings in the union. Not driven solely by profit, they are relative unicorns in the financial world, but they are competing against giants that can overpower those that are smaller. We must therefore do more to support credit unions, to increase their access to finance and to support them as they take their first steps. I know the Government have already signalled their intention to do so, and I hope they will engage closely with members of the co-operative movement to achieve the best outcomes.

At the beginning of my speech, I referred to Norwich’s, and indeed Norfolk’s, history in this movement, but now I want to look to its future. With local government reorganisation and enhanced devolution on the horizon, Norwich stands to gain even more from co-operation. There are huge opportunities to provide co-operative solutions to the ownership and delivery of local services and governance—protecting public assets, empowering communities and spreading wealth fairly. I pay tribute to my hon. Friend the Member for Oldham West, Chadderton and Royton for all the work he has done on the devolution agenda. It is important that co-operativism is at the heart of that, and I hope that we will soon see more co-operatives in Norwich, Norfolk and across the nation.

15:02
Jack Abbott Portrait Jack Abbott (Ipswich) (Lab/Co-op)
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It is a pleasure to serve under your chairship, Mr Turner. I, too, thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate, and Joe Fortune, general secretary of the Co-op party, in the Gallery. My hon. Friend has been a tireless champion for the co-operative movement, and rightly so. This part of our economy combines purpose with productivity, and values with tangible social value. I am wearing my hybrid Labour and Co-operative tie—it is not official merch, although the general secretary might want to consider that. I am incredibly proud to stand here as the Labour and Co-operative MP for Ipswich, and to represent a town and region where the co-operative movement runs deep.

The East of England co-operative began in 1861, when a group of people in our region decided to trade fairly, work together and reinvest profits for the common good. From one small store, the movement has grown into a network of more than 200 businesses across Suffolk —including many in and around Ipswich—Norfolk and Essex, providing jobs, training and investment where they are needed most. That legacy still shapes our community today.

Co-operatives are rooted in their places. They keep wealth local, invest for the long term and give people a genuine stake in success. Those are principles that this Government proudly celebrate and learn from as we seek to build a fairer and more resilient economy. The co-operative spirit is also alive and well in Parliament, as we can see here this afternoon. There are now dozens of Labour and Co-operative MPs, including Ministers across Government, from the Treasury to the Department for Education and the Ministry of Housing, Communities and Local Government. Fairness, participation and local ownership run deep in this Government’s approach to growth, local empowerment and building an economy that truly works for everyone.

In Ipswich, the spirit of shared ownership and civic pride is something we see every single day. For too long under the previous Conservative Government, our town centre was allowed to decline, but local people never gave up on it. That is why I am so pleased that our Labour Government’s Pride in Place programme is investing £1.5 million in Ipswich, plus millions of pounds across our region and our country, to revitalise our high streets, bringing empty buildings back into use and empowering communities to take control of the spaces that mean most to them. That is more than simply a regeneration grant; it is co-operation in practice. Pride in Place is built on the same principles that drive the co-operative movement: local decision making, long-term stewardship and reinvestment for community benefits. It is designed so that local people, local councils and local businesses can come together to shape projects, not have them imposed from Westminster.

That means supporting community ownership of assets, backing partnerships that keep wealth circulating locally, and giving neighbourhoods the tools to plan and deliver the change they want to see. Whether refurbishing an empty shop for social enterprise or helping a community group take over a much-loved building through a co-op or trust, this policy puts power and pride back into local hands and connects directly with the other work the Government are doing to grow our towns more fairly and sustainably, from the community ownership fund to the local skills improvement plan and the growth mission fund.

Those are all examples of looking to boost growth, yes, but also sustain it. Together those policies form a clear picture of what co-operative economics looks like in action: growth that is built with communities at the centre. Ipswich is leading the way with projects that bring long-empty buildings back to life, and with community groups exploring new co-operative models to run venues and services that matter to them. There is a genuine sense of momentum in our town, a belief that when we work together we can shape the future of Ipswich ourselves. Although there is much to do, progress is being made. Co-operatives and community enterprises are essential partners in building a stronger, fairer economy that works for everyone.

Ministers have rightly spoken about the need for economic growth, not simply seeking growth for growth’s sake, but the type of economic growth that serves people and places. The quality and distribution of growth matter just as much as its pace. Politics has been guilty of seeing communities as an afterthought or a nice-to-have, not as the serious policy tool they should be. The truth is that members have a direct stake in their co-operative’s success because they own it. In fact, they are more than businesses; they are routes to power, ownership, decision making and community.

Ipswich’s story, from its proud co-operative roots to its renewed sense of local pride, shows exactly why that matters. True growth is achieved when local communities shape their own future, when we grow our economy from the grassroots and when we keep wealth and power local. That is why the future of our economy, our country and my town must have co-operation at its heart. That is what the Co-operative party’s Community Britain campaign is all about, and why I am proud to be a Co-operative MP.

15:07
Josh Newbury Portrait Josh Newbury (Cannock Chase) (Lab)
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It is a pleasure to serve under your chairship, Mr Turner. I congratulate my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) on securing this important debate and his impassioned opening speech. I can think of no greater or better-informed champion of our co-operative sector. Although he is a huge loss to the Front Bench, he is our gain in this debate.

I associate myself with the remarks about the incredible work of the Co-operative party, of which I have been a proud member since the age of 18, and Co-operatives UK. The co-operative and mutuals sector is one of the UK’s quiet success stories, with an economic contribution seven times greater than its share of the business population. It is not a sector that is standing still. The number of employee-owned businesses has trebled in five years, and the number of community-owned pubs has grown by 51% in the same period, bucking wider high street trends.

Why does that matter? Because co-operatives are more resilient, more likely to pay the minimum wage and simply more inclusive. In my constituency of Cannock Chase and across the country, we see that in community energy groups, credit unions, housing co-ops and the pub that stays open because the community refused to let it call last orders for the final time. Co-ops root wealth locally and give people genuine power over the things that shape their lives.

In my patch, for example, 10 years ago, under a Labour and Co-operative council, Chase Community Solar partnered with Cannock Chase district council to install solar panels on 314 council-owned bungalows, cutting the bills of tenants by between one third and a half. Five years later, after becoming a Labour and Co-operative councillor, I was proud to be one of the cabinet members who signed off on an investment that enabled a further collaboration with Chase Community Solar, that time alongside the charity Beat the Cold, to install batteries to make even more clean energy and cut bills even further.

John Slinger Portrait John Slinger (Rugby) (Lab)
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I declare an interest as a member of the Co-operative party. My hon. Friend is speaking about renewable energy. Does he agree that one benefit of the co-operative movement and principles is that it can be innovative for local communities? A constituent of mine approached me about a problem faced by people living in flats: they do not have driveways and cannot charge electric vehicles at a good rate. It strikes me as a good example that a co-operative approach could help that large section of the community gain access to EVs, which would be socially useful and progressive for them, society and the environment. That is innovation in the interest of the entire community.

Josh Newbury Portrait Josh Newbury
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My hon. Friend has given us a prime example of how thinking about problems differently and more collaboratively is rooted at the heart of co-operatives. The roll-out of EVs to people who do not have a driveway and perhaps do not have ready access to charging infrastructure is one of the many challenges that the Government are facing in the move towards net zero. It is a prime example of how we can use co-operative principles to tackle a problem in a different way that helps the community to benefit.

Similarly, I want to make sure that our local working men’s clubs are given their due, such as those in Cannock, Rugeley, Hednesford, Chadsmoor and my home village of Norton Canes, where they remain vital community hubs. Those clubs embody co-op principles, offering social support, fostering local connections and supporting grassroots initiatives. They are living examples of how member-driven organisations can enrich community life.

As a member of the Environment, Food and Rural Affairs Committee, I have seen how co-ops can empower small producers to speak with a louder voice, and to secure value and recognition for their labour. Probably the best known is Arla, owned by more than 3,000 dairy farmers and supplying a quarter of the nation’s milk, but there are many more. However, I still look longingly at many of our European neighbours and even the USA, which my hon. Friend the Member for Peterborough (Andrew Pakes) mentioned, where co-ops are far more present in the agricultural economy. It is no coincidence that they do not have much of the abject unfairness in their food supply chains that we see in Britain. I hope that is being considered by the Treasury and the Department for Environment, Food and Rural Affairs, as I believe it could unlock a huge amount of growth in rural communities that have been overlooked for far too long.

I am proud of this Government’s commitment to doubling our co-operative sector because, as my hon. Friend the Member for Oldham West, Chadderton and Royton said so powerfully, it is clear that co-ops have long been undervalued and underappreciated as part of our economy. They cradle immense potential not just to transform our businesses but to draw together our communities at a time when many have never felt further apart.

Ask an everyday passer-by what co-ops contribute to our communities, and they might answer something along the lines of: “Somewhere to buy a meal deal.” It is an irony that highlights the sector’s need for Government support in making the UK economy one in which mutuals, co-ops and community-owned businesses can thrive and play a more prominent role in national life.

I will set out three brief priorities for the Government. First, let us unlock finance by opening up the British Business Bank’s programmes to co-ops and making sure that transitional help is available so that small and medium-sized enterprises can mutualise. Reaching our manifesto commitment cannot just be about new co-ops being created; if we support the mutualisation of existing businesses, we can safeguard them and put them in the hands of the very people they serve.

Secondly, we need to shake up legislation and regulations so that co-ops are unleashed to start up, scale up and diversify. That is not asking for special treatment; all it would do is bring us into line with international best practice. That is particularly important for new and innovative co-operative models in emerging sectors.

Thirdly and finally, let us offer tailored support, at a regional level, on the nitty-gritty of start-up, conversion, governance and, of course, procurement laws, so that co-ops can compete for public contracts on the scale at which they operate. However, we must also think more broadly. There are sectors crying out for a co-operative approach, and the Government clearly have a role to play in supporting that. In social care, where quality, continuity and local accountability are critical, co-op models offer a way to put care workers and care users at the heart of the system.

In some areas of the special educational needs and disabilities sector, we see eye-watering profiteering at the expense of family and council budgets alike. A co-operative approach could provide transparency, trust and better outcomes by aligning support with the needs of families, not investors.

In housing, as we have heard, many people live in communities that are defined by shared interests and challenges, so giving tenants a real say through co-op principles could help to improve housing standards, tenant engagement and community cohesion.

Finally, looking ahead, local government reorganisation presents us with both a risk and an opportunity. As new councils are created, assets could be shared. Many of those assets are central to the identity of our communities, such as libraries, community centres and green spaces. Rather than lose them to speculative buyers or closure, the Government’s commitment to a true community right to buy, so brilliantly championed by my hon. Friend the Member for Oldham West, Chadderton and Royton, could make sure they stay in the hands of the community.

In conclusion, if we want to supercharge growth in the co-op sector, we must match its potential with political will. If we do that, we will grow not just a sector but an economy in which power is shared in Cannock Chase and every corner of the UK.

15:14
Tom Hayes Portrait Tom Hayes (Bournemouth East) (Lab)
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It is a pleasure to serve under your chairmanship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon), who was a superb Labour council leader and a superb Labour Government Minister. He is a fantastic advocate for the Co-operative party and the co-operative movement. I also thank Joe Fortune, the general secretary of the Co-operative party, who has been a fantastic supporter of the movement.

If someone is a co-operator, it is in their blood; it is who they are. It is an instinct to trust others, create ideas, craft projects and co-operate. It is about building stronger communities and holding the faith, knowing that life is to be enjoyed and made the most of, and about ignoring the voices of division and misery that feed us the message that life is something to survive and to get through. To be a co-operator is to live with hope; it is about striving for better, never accepting second best and always putting people first.

Politics is about choices, and we know what the choices made by the Conservatives were. The Conservatives showed us whose side they were on: they sold us out and they wrecked our country. Labour wants to put money and power back where they belong: into our communities. With the co-operative movement at the heart of that mission, I believe that we will be successful.

In my constituency of Bournemouth East, we have many co-operators, and across Dorset we have many co-operatives. Indeed, the movement dates back to 1862, with the Parkstone and Bournemouth co-operative. I want to see many more co-operators and co-operatives, and I want to do a few shout-outs, if I may. I want to shout out to Christchurch Housing Society, which provides housing for older and vulnerable people; Great Western credit union; Bournemouth East Allotment Society; and Cherries Trust, a community mutual that supports the local football club, AFC Bournemouth, which was top of the league for all of half an hour at the weekend—I hope to see it return there soon for much longer.

I also want to do a shout-out to Hengistbury Head Outdoors, which has been supported by a Labour Government investment of £668,000 to refurbish and repair its outdoor centre. It now has a 99-year lease, and the co-operative has helped it through the process of issuing shares for community assets and offering a percentage of match funding too. If any constituents are watching, it has a share offer on at the moment, and I would encourage them to invest, because that will help to get the project open in time for April.

Co-operation is in the DNA of Labour. The Labour and Co-operative parties have been sisters since 1927, and the centenary will take place under a Labour Government. Back then, the first electronic TV had just been invented and Parliament was still debating the introduction of traffic lights. We have been sisters for a long time and our partnership has endured, but the Co-op party can at times get lost in and swallowed up by the Labour party. We co-operators need to keep in mind that most fundamental question: what is uniquely co-operative about what we are trying to achieve?

The co-operative model may have been born here in the UK, but Germany’s sector is four times larger than ours, France’s is six times larger, and South Korea has doubled its in just five years by creating the right conditions. We should be no less ambitious now that we have a Labour Government. Over 7,000 UK co-operatives now employ 240,000 people, serve 16.6 million members and generate £42 billion each year. Owned by the people who use them, co-operatives keep wealth rooted in communities and reinvest for the common good. They are proven to be 8% to 12% more productive than traditional firms, twice as likely to survive their first five years and four times less likely to fail during crises. Co-operatives narrow pay gaps, promote equality and strengthen local economies.

To deliver on the Government’s pledge to double the size of the co-operative and mutual sector, we need action that will match our ambition. First, we need a modern legislative framework, acting on the Law Commission’s review, to unlock co-operative growth. Secondly, we need a regulatory system attuned to co-operatives, with the Competition and Markets Authority joining the Prudential Regulation Authority and FCA in supporting their unique role. Thirdly, we need better access to finance, adapting existing funds, such as community development financial institutions and Better Society Capital, to include co-operatives. Fourthly, we need stronger business support, provided through the new co-operative development unit and co-ordinated across Departments. Lastly, we need greater visibility and education so that more entrepreneurs see co-operatives as a viable route to business success.

In the time remaining I want to focus on one specific area of policy where the co-operative sector has played a crucial role and can play a further crucial role. To tackle the climate and ecological emergency, we must do more of what works. We must rapidly expand clean, affordable solar and wind energy so that everyone benefits from a sustainable, secure energy supply. When that energy is community-owned, society is fairer and more resilient. 

As a councillor for 10 years, and as deputy leader of the council, I was proud to back the co-operative movement, including by funding the UK’s largest community-owned solar park with nearly £4 million of council investment. It now generates enough clean power for 6,000 homes each year, and the council receives £177,000 annually, with the loan fully repaid, plus an additional £606,000 to reinvest in local services. Over its lifetime, the project will return £10 million in community benefit, and local people have a direct say in how that money is used.

That is just one project of many in our constituencies. That is what co-operation looks like in action: clean energy, local ownership and shared prosperity. We could do so much more with the support of our Labour Government, and I am pleased to see Great British Energy prioritising community energy with a Great British Energy community fund that provides feasibility funding of up to £40,000 and project development funding of up to £100,000. I thank Barbara Hammond, Mish Tullar and Tim Sadler for their role in developing the solar park project, and thank the Co-operative Councils’ Innovation Network for sharing the news of the project across councils, as well as news of all the good projects across our constituencies.

The Rochdale pioneers built their movement in the hungry forties, when profit and power were concentrated in too few hands. They offered a fairer, more democratic way to do business, and that vision still matters today. Let us achieve a golden twenties; let us make this a co-operative decade. Co-operatives show us what businesses can be when profit serves people, not the other way round. Let us match ambition with action. Let us build an economy that is more productive, more resilient and fairer for all.

15:21
Rachel Blake Portrait Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
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It is a pleasure to serve under your chairship, Mr Turner. I thank my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon), who has been a shining light of the co-operative movement for a long time. He has been a Co-op councillor, a Co-op leader, a Co-op MP and a Co-op Minister. We are incredibly lucky and proud to have him as such a shining light in our movement, and I thank him very much. I give thanks also to Joe Fortune and his team at the Co-op party. We talk about doubling the sector, but I think the Co-op party team might have doubled in the last few years. We are proud of that, and grateful for the hard work.

This Saturday I had the honour of speaking at the Confederation of Co-operative Housing. I was welcomed there by the statement, “Welcome, you’re here with the doers.” That is who co-operators are: we are the doers. We put getting on with practical solutions at the heart of our mission. This year is the International Year of Co-operatives, and I am happy to talk about our proud values, celebrating our co-operation throughout the years. Our values are practical, compassionate, community-driven and absolutely grounded in the principle of sharing power and wealth, in the knowledge that if we can share power and wealth in the organisations that we create, we can rebuild trust and confidence in democracy and rebuild and restore confidence in our communities as well. If someone has a stake in a place or an organisation, that makes a difference to how they feel, and to the strength of that organisation and its ability to make a difference.

My constituency is home to Nationwide, John Lewis and more co-ops than I can count. I wish to talk about two particular sectors, housing and energy, and about what more the Government can do to support them. On the housing sector, we know that communities can identify opportunities for genuinely affordable homes in the new homes coming forward. I welcome the work that community and co-operative housing organisations do to bring forward new homes. We should also recognise the importance of having communities involved in the governance of small and medium-sized housing associations, and celebrate the £20 million that the Government have put into co-operative housing and the small sites aggregator, which will make such a big difference to increasing the size of co-operative housing in this country.

On the energy sector, I am proud to have the Aldgate community energy scheme and the Ebury Edge energy garden in my constituency. They bring people together and make sure that they all share in the benefits of renewable energy. We should celebrate the investment that GB Energy is determined to put into community energy schemes and make sure we do everything we can, practically, to deliver more of them.

We should also talk about the finance needed, the access to capital and the changes the Government can make to help us grow the sector. I know how determined the Government are to double the size of the sector. As a member of the Treasury Committee, I had the chance to speak to Treasury officials about the Treasury’s role in that. It is brilliant that we now have a Mutual and Co-operative Sector Business Council—it is a great step—but there are further practical steps we should consider to increase the benefits of co-ops.

Can the British Business Bank’s ENABLE scheme extend to co-ops? What more can the Government do to support co-operative development agencies in every community across the country? I look forward to the Minister’s response on those topics, and I am grateful for this chance—in the International Year of Cooperatives —to discuss this issue with all the co-operators here today.

15:26
Sarah Olney Portrait Sarah Olney (Richmond Park) (LD)
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It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) for his work in securing this important debate. It has been a real pleasure to hear contributions from all the Labour and Co-operative party Members this afternoon.

The current economic landscape is challenging for our businesses and industries. Years of dire economic mismanagement by the last Conservative Government have led to businesses, including co-operatives, facing huge challenges, ranging from recruiting and retaining staff to soaring energy costs. Those issues have been exacerbated by the increase in trading obstacles following the last Government’s botched trade agreement with the EU. However, many of those challenges are now being compounded by decisions taken by this Government.

Co-operatives are owned by and run for the benefit of their members. As the Liberal Democrats have always believed in empowering individuals to engage in decisions that impact their lives, we are supportive of the co-operative sector, credit unions and non-profit financial institutions owned by their members. The co-operative sector is made up of more than 10,000 enterprises across every sector and region, from local community pubs and credit unions to building societies, mutual insurers and retail societies. Together, they represent one of the most resilient and values-driven parts of the UK economy, rooted in communities and owned by their members.

The Liberal Democrats believe that employee participation in the workplace, together with wider employee ownership, is important for diffusing economic power, promoting enterprise, increasing job satisfaction and improving service to customers. Co-operative enterprises offer considerable potential for member and employee involvement and are an important part of a modern mixed economy.

In the recent “Backing your Business” plan, published in July 2025, the Government committed to growing the co-operative and mutual sector over this Parliament, and launched a call for evidence on how we can support the sector and its businesses to grow. The Liberal Democrats support that ambition, but will the Government be more decisive in their support by acting on some of the recommendations of Co-operatives UK, such as on access to finance, which would expand the possibility for many of these organisations to scale up. Co-operatives often struggle to raise capital because, by virtue of being member-run organisations, they are more limited than companies in issuing shares that are attractive to external investors.

Often, co-operative enterprises provide fairer workplaces; they are four times as likely to be living wage employers, and women lead nearly a quarter of the UK’s top 100 co-operatives—more than twice the proportion in the FTSE 100. Meanwhile, although women earn 12% less on average than men across the UK economy, that figure is reduced to 7.5% within co-operatives. Community-owned pubs are also on the up, with a 51% increase over the last five years, and a 13% increase in the last year alone.

However, training, hiring and retaining a skilled workforce are issues that affect businesses of all kinds across the country. The Liberal Democrats therefore welcomed the industrial strategy this summer and the commitment to an increase in skills and training. The apprenticeship levy does not work, and many businesses cannot get the funding they need to train staff, with hundreds of millions of pounds of funding going unspent. The Liberal Democrats have been calling for the apprenticeship levy to be replaced with a wider skills and training levy, which would give businesses flexibility over how they spend the money to train their staff. We therefore welcome the intention to reform the levy and replace it with a broader growth and skills levy, but we have concerns about moving funding away from level 7 apprenticeships, which we know increase social mobility.

Andrew Pakes Portrait Andrew Pakes
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On the subject of apprenticeships, is the hon. Lady aware that the Co-operative Group is doing pioneering work at Highpoint Prison in Suffolk using some of its share from the levy? It is working with employers to ensure that offenders get on to an apprenticeship framework so that, when they have served their time in prison, they have a job to go into. That shows that the co-operative movement is leading the way on innovation in apprenticeships. Does the hon. Lady agree that we need to see more in the apprenticeship levy aimed at reducing reoffending and giving opportunities to young people?

Sarah Olney Portrait Sarah Olney
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That is really good to hear, as it is a good example of how the co-operative movement promotes innovation, particularly in promoting wider social participation. However, the fact that we have to have innovative schemes driven by the co-operative sector points to the challenges that so many people find in using the apprenticeship levy. The Liberal Democrats would like to see a much broader range of potential uses for the apprenticeship levy, which would benefit the co-operative sector as well as the rest of the economy.

More broadly, co-operatives, like many other kinds of business across the country, are struggling under decisions made by the Government, such as the increase in national insurance contributions imposed at the last Budget. Small businesses in particular have been left struggling under the heavy burden of this jobs tax. The Government must take steps to support those businesses, which are at the centre of communities and local economies. Thousands of local businesses, including many in the co-operative sector, which often provide community services, are feeling the damaging impact of the national insurance increase and many other changes. That is why I and all my Liberal Democrat colleagues have repeatedly called on the Government to reverse the employer NICs increase and will continue to campaign for them to scrap that damaging policy.

We also call on the Government to introduce vital reform to the business rates system. In 2019, the Conservative Government promised a fundamental review of business rates, but they failed to deliver it. Labour pledged in its manifesto to replace the system, but still no action has been taken. A year into Labour’s time in the power, will the Minister say whether the Government plan to keep their word on that commitment? Critically, as we look at measures that will boost growth, the Liberal Democrats will continue to be proud advocates for a closer relationship with Europe. Liberal Democrats want to see a bespoke UK-EU customs union to reduce red tape and allow all businesses the freedom to grow without heavy regulation and huge export costs.

The co-operative sector generates a combined annual income of £42.7 billion. Its significant contribution to the economy and defiance of current business trends highlights its resilience and stability in a challenging economic landscape. In 2025 there are 7,400 co-operatives in the UK, with 16.6 million memberships, employing around 240,000 people. I am glad that in my constituency of Richmond Park, co-operative enterprises exist not only for the services that they provide, but as community spaces to bring people together. I thank the hon. Member for Oldham West, Chadderton and Royton for securing the debate and hope the Government will go further in supporting the co-operative sector.

15:32
Mark Garnier Portrait Mark Garnier (Wyre Forest) (Con)
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It is a great pleasure to serve under your leadership, Mr Turner. I add my congratulations to the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) on securing this important debate, in which there seems to have been an outbreak of unanimity around the Chamber. As I start my remarks, I am conscious of the expression “everything that needs to have been said has been said but not everybody has said it.” My apologies if I repeat some of the points that have been made.

As colleagues all know, this was all started in Toad Lane, Rochdale in 1844 by a group of 27—or was it 28?—men known as the Rochdale pioneers. The pioneers would not have been constituents of the hon. Gentleman, but it is important to recognise that the roots of the movement can be found not just in Rochdale, but in surrounding areas, including his constituency. At a time when living conditions were particularly tough, these men decided to do something for their community by balancing the profitability of their shop and its members with the social impact on the community and the wider membership. That meant that essential, good-quality ingredients—flour, butter and others—became affordable for the community.

The co-operative movement that was founded in Rochdale in 1844 continues to thrive today. It has grown to become an international movement; co-operatives operate in 109 countries. In the UK alone, we have 7,400 co-operatives, but if we incorporate organisations that operate in the co-operative spirit, such as employee-owned businesses, building societies, friendly societies, credit unions and mutually owned banks, the number comes to over 10,000. That represents around 0.2% of businesses in the UK.

According to a recent report by Co-operatives UK, there are 66 million members across the sector, with around 16.6 million people solely in co-operatives. I have to say that just in the last hour I have become a member myself, having signed up to the Co-operative on the app. [Hon. Members: “Hear, hear.”] Thank you very much. The exciting point about the last statistic that I referred to is that that number has increased by 1.4 million in one year, showing that the sector is truly on an upward trajectory. Additionally, it is suggested that the combined annual income of the sector is around £179 billion, with WPI Economics estimating that the sector has contributed £35 billion in gross value added, which is equivalent to about 1.5% of the total UK economy.

It is obvious, therefore, that the co-operative sector plays an important part in the health and growth of the UK’s economy. Co-operatives help to provide a diverse range of business models, which I believe is a good thing. Any healthy economy needs a variety of business models, and it is really important that we have things like co-operatives.

I agree with the premise of the debate, which is about Government support for the co-operative sector. A perfect example of such support is the introduction under the last Government of employee ownership trusts and the tax incentives surrounding them. Offering 100% relief on capital gains tax when a business owner transfers their company to an employee ownership trust has helped to empower communities, and we have seen a strong rise in employee-owned businesses, from 600 in 2020 to 2,500 this year.

However, let me express a slight reservation. It is important in a competitive market not to incentivise one part of the economy, or one business model, over another, in the way that the Building Societies Act 1986 opened the way for demutualisation and incentivised building societies to convert into investor-owned commercial companies. Some have said that that was a bad thing, and in retrospect I probably agree. We need to be careful that we do not encourage excessive mutualisation and disincentivise investment in our equity markets. Fundamentally, a balance needs to be struck.

I believe—possibly unsurprisingly—that that was done successfully under the last Government through the Co-operative and Community Benefit Societies Act 2014. The last Government introduced measures to increase transparency and facilitate growth, while maintaining the core principles of member benefit and community focus; for example, by increasing the maximum withdrawable shareholding from £20,000 to £100,000 per individual investor, they allowed for broader capital participation.

Although the 2014 Act was positive for the sector, I think that there is widespread agreement that it needs to be updated to help support the growth and modernisation of the sector today. It was good, therefore, that the last Government and now this Government have asked the Law Commission to review the legislation, and I look forward to seeing its proposals when they are brought forward, hopefully at the end of this year.

I am also glad that the private Member’s Bill now known as the Co-operatives, Mutuals and Friendly Societies Act 2023 supported the co-operative sector to protect its capital and assets, and to discourage mutualisation. Introducing an asset lock mechanism could mean that organisations are able to lock their capital surpluses, ensuring that assets are non-distributable among members and must instead be preserved for the community and the purposes of the organisation.

It is understandably disappointing that although the 2023 Act received cross-party support when it went through Parliament, over two years later the regulations specified in the Act have not yet been announced by the Government and co-operatives are still unable to utilise the statutory protection that it provides. I note, however, that the Law Commission has proposed to put those powers into primary legislation through reform of the 2014 Act. Are the Government considering that? If not, what alternatives are being pursued?

It is worth adding that the last Government introduced the community ownership fund. Although that was not directly targeted at co-operatives, some, such as the Calder Valley Community Land Trust, which seeks to reduce energy use and costs at Fielden Hall, have made successful bids. That is positive, but I would be interested to know whether the Government are considering a fund specifically for those in co-operatives and mutuals. In fact, we heard earlier from one Member about the potential for the British Business Bank to be opened up in order to support co-operatives and mutuals.

I turn now to what this Government are doing. First, it is important to recognise the commitment in their manifesto to double the size of the co-operatives and mutuals sector. That is a positive direction of travel that the Government want to follow. However, Chris Bose of the Nationwide asked what the Government meant by that and wrote:

“Precisely what was to be doubled was unclear, as was the means to achieve that.”

This is an important point for the Minister to clarify. Do the Government want to double the number of mutuals, the number of members or the size of mutual balance sheets? What specifically are they seeking to achieve?

The measures announced at the Mansion House in 2024—specifically, the creation of the mutuals and co-operatives business council and the commissioning of a report by the FCA and the Prudential Regulation Authority on the mutuals landscape—will help to lay the groundwork for that, but I hope the Minister will be able to provide the clarity the sector is looking for. Like the hon. Member for Oldham West, Chadderton and Royton, I also welcome the creation of a co-operative development unit in the Ministry of Housing, Communities and Local Government.

Those are all good things, but it feels like we are still waiting for some meat on the bone, so let me raise a few points with the Minister. First, the issue that is raised time and time again by those in the sector is their ability to access cash. By their very nature, co-operatives are member-run organisations, so they are more limited than companies when it comes to issuing shares that attract external investors.

It is also worth highlighting concerns related to the rumours about what the cash ISA allowance will be following the Budget. There is talk that it will be slashed from £20,000 to £10,000. Cash ISAs are a really important way for building societies to access finances. The Building Societies Association estimates that around 40% of all cash ISA balances are held with building societies, which turn those cash balances into mortgages for our constituents to go and buy homes. It is really important that we get some clarity on that.

Returning to the issue of incentivising certain sectors of the economy over others, I am very much in favour of encouraging investment in the UK equity market, but we must be careful that, in trying to achieve the good, we do not get rid of the best. By trying to incentivise cash ISAs to move into equity markets, we are effectively taking cash away from the mutuals and putting it into normal equity. I am worried that, if this policy comes forward, the Budget could cause a problem for the mutual sector. I know the Minister will not be able to comment on the contents of the Budget right now, and we have to wait only another month, but I hope that the Economic Secretary to the Treasury takes note of this important point and feeds it back.

I also encourage the Minister to look into the Credit Unions Act 1979, and specifically the regulations on geographical area and the total number of members in common bonds. The last Government made positive steps to increase the total number of potential members of credit unions from 2 million to 3 million, and at the start of this year the Government ran a call for evidence about common bond reform, which I welcome. However, we are still waiting on the findings and for the Government’s response to be published, even though there seems to be a consensus that the regulations are still stifling growth in the sector. It is important to get the credit union sector to grow. Government Members know exactly how important it is, and so do Opposition Members. We need to get on with this. Doing so would only support the goals of the Government’s financial inclusion strategy, as well as their manifesto commitment to double the size of the sector.

Let me put a few final points to the Minister. I had the honour to go to Iceland and meet representatives of the country’s trade unions, which, by any other standard, behave as friendly societies. It is invigorating to see that from something as fundamental as a trade union, funded by both members and employers. Something like 97% of employees are members of those unions, because they act as friendly societies and provide insurance, holidays and all sorts of things. That is a really good example of how friendly societies can work.

We should be debating more the mutualisation of other utilities. We heard from the hon. Member for Cities of London and Westminster (Rachel Blake) about an energy company in her constituency that does this, but has she considered the possibility of mutualising Thames Water? It is a very ambitious project—

Rachel Blake Portrait Rachel Blake
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It is not in my gift.

Mark Garnier Portrait Mark Garnier
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It is not in her gift, as she says from a sedentary position, but it is quite interesting. Notwithstanding the £17 billion black hole in Thames Water’s balance sheet, the water utilities are very geographically prescribed and millions of people use them, so they have a built-in membership. The most important issue that people are talking about is the pollution of waterways such as the River Thames. By mutualising an institution like Thames Water—by the way, this is not Conservative policy, but—[Laughter.] But it is a debate we must have, Mr Turner. With mutualisation, members could have a proper debate about what investment they want to make in the purity of the waters.

My final point is about skills. I do not want to bring up the ugliness of the debate over the former chairman of the Co-op bank, the Rev. Paul Flowers, back in 2011 or 2012, I think, but he came before the Treasury Committee when I was a member of it and made a very good point. He said that his election as chairman of the Co-operative bank was because he was a member of it, not because he was good at finance. It is incredibly important, particularly with things like corporate governance, that we ensure there is training for corporate governors. Running a bank or a big chain of supermarkets is an incredibly difficult job, so we must make sure that that training includes not only people who work in the bank but those responsible for the corporate governance that looks after the organisations.

My experience of the Co-operative in Kidderminster has been absolutely fantastic. A few years ago we were trying to stop a 4G telephone mast. This was several Governments back—perhaps around 2007 or 2008—when 4G masts were first going up, and there was a proposal to put one opposite the Co-op. I had a conversation with the managers there and they said, “We will buy the site in order to prevent the telephone mast from going up.” So I have always been a huge fan of them, and I cannot imagine why it has taken me 20 years to actually join the Co-op.

I thank the hon. Member for Oldham West, Chadderton and Royton for securing the debate. As I said, there has been an outbreak of unanimity, which is fantastic to see. I am only sorry that I did not bring more of my friends with me.

15:46
Mark Ferguson Portrait Mark Ferguson (Gateshead Central and Whickham) (Lab)
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It is a pleasure to serve under your chairmanship, Mr Turner. Please do not adjust your sets: I am not the Economic Secretary to the Treasury. But I am very pleased to be here on her behalf for my first stint at the Dispatch Box. [Hon. Members: “Hear, hear!”] Thank you.

I am grateful to my hon. Friend the Member for Oldham West, Chadderton and Royton (Jim McMahon) for securing this important debate. He is a huge asset not only to our party and his constituents but to the Co-operative party, which he proudly serves as chair. I must declare that I am a recently rejoined member of the Co-operative party. I did not know that I would be doing this debate when I joined, but it is a pleasure for it to have come round so soon. As so many others have done, I note the sterling work of the party’s general secretary, Joe Fortune. I also want to recognise the party’s fantastic head of politics, Caitlin Prowle, who I am sure has put a huge amount of work into this debate.

The level of interest in this topic reflects the Government’s strong support for the co-operative sector and underlines how important it is to ensure that the sector continues to grow, thereby supporting local people and communities. It also reinforces why, in our manifesto, we committed to doubling the size of the co-operative and mutual sector.

I thank colleagues from across the House for their thoughtful contributions. My hon. Friend the Member for Beckenham and Penge (Liam Conlon) talked about the importance of community housing. My hon. Friend the Member for Rochdale (Paul Waugh) talked about the Metro Moneywise credit union, which is clearly building on the legacy of the Rochdale pioneers. My hon. Friend the Member for Leeds Central and Headingley (Alex Sobel) spoke about new forms of co-operative support. It would not be a first appearance at the Dispatch Box without the hon. Member for Strangford (Jim Shannon); I thank him for his very kind words, and I know how important the co-operative sector is in Northern Ireland.

My hon. Friend the Member for Leigh and Atherton (Jo Platt) gave great examples of the importance of local leadership, including at Leigh Spinners Mill. That organisation was lucky to have her and, after a brief absence, we are lucky to have her back in this place. My hon. Friend the Member for Peterborough (Andrew Pakes) talked about a purpose-driven economy and inclusive growth. He does himself down a little, though: he is not as much of an old lag as he sometimes pretends to be.

My hon. Friend the Member for Norwich North (Alice Macdonald) talked about the breadth of the co-operative sector and the opportunities for her community presented by devolution—on which my hon. Friend the Member for Oldham West, Chadderton and Royton did such sterling work as a Labour Minister. My hon. Friend the Member for Ipswich (Jack Abbott)—I hope Ipswich coming straight after Norwich is not a point of contention—spoke about the role of the community in shaping the future of his town. That is something we on the Government side of the House are incredibly keen on.

My hon. Friend the Member for Cannock Chase (Josh Newbury) talked about one of my favourite topics: social clubs and their important role in the community. They are part of our past but, increasingly, also part of our future. We should all seek to support them, both politically and with the pounds in our pockets. My hon. Friend the Member for Rugby (John Slinger) talked about how co-operative principles can be applied to modern challenges, while my hon. Friend the Member for Bournemouth East (Tom Hayes) made the second-earliest reference, to 1862—not quite as far back as the Rochdale pioneers, but pretty good. He also mentioned Hengistbury Head Outdoors and called on local people to invest, which sounds very sensible for people in that area. My hon. Friend the Member for Cities of London and Westminster (Rachel Blake) said we are “the doers”. Not only that, but she is a doer for her constituents in a world of talkers, and we all thank her for that.

I welcome the support of the Lib Dem spokesperson, the hon. Member for Richmond Park (Sarah Olney), for the co-op sector. While I expect some disagreement with the Government, I think we can agree that this was an agreeable debate on all sides. She made the important point that co-ops are more likely to be led by women than the average for the FTSE 100. That is another mark in favour of the co-operative sector.

As for the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), he said before I started that everything that needs to be said has been said—a bit of a challenge, but I can take it on my first outing. We all welcome a new co-operator, don’t we? He joined over the course of the debate. After the Economic Secretary to the Treasury has read Hansard tonight, before bed, which I am sure she will—as we all do every night—she will write back to him on the point about the British Business Bank. The Government look forward to the Law Commission review coming out. I certainly did not expect references to the potential mutualisation of Thames Water or Icelandic trade unionism—I hope that one day both may be discussed more broadly on the Opposition Benches—but the mutualisation of Thames Water is not Government policy.

The Government are committed to doubling the size of the mutuals sector, as has been discussed. According to the 2025 co-operative and mutual economy report, there are currently over 10,000 mutual and co-operative businesses in the UK, with an annual income of £179.2 billion. What doubling means will differ for different parts of the sector.

Gareth Snell Portrait Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
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This debate has focused on the business element of the co-operative sector, but could the Minister take back to the Department the work on co-operative solutions that happens in social settings? My constituency was one of the few that had riots last year. The Co-operative party’s community power work demonstrates that we can bring communities together and deal with the tensions and sense of purposelessness by giving people a genuine stake in their community so that they can shape the services they use. There is no business element to that, but the social benefit is huge. When the Minister goes back to his Department, can he implore it to look at co-operative solutions to and models for the modern tensions that we face in some communities? The co-operative movement has the answers that we are looking for.

Mark Ferguson Portrait Mark Ferguson
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My hon. Friend intervened on my maiden speech, which is slightly irregular, and now he has intervened on my first outing at the Dispatch Box. Co-operatives have a wide variety of uses in the economy and I am sure that the Department and the Government more broadly will consider them. Their importance in community cohesion is certainly not lost on me or, I am sure, on other Members here.

On the shadow Minister’s question about cash ISAs, cash savings are important for people looking to put cash away for a rainy day, and the Government will protect that. The Chancellor has been clear that she wants to get Britain investing again so that companies can grow and so British savers who choose to can get more in return. Given that I am here merely on behalf of my hon. and learned Friend the Economic Secretary to the Treasury, I am even less tempted than usual to comment on the future Budget.

I want to acknowledge the importance of discussing the mutual sector, of which co-operatives are a huge part. According to research by Co-operatives UK, the 10,000 co-operatives I mentioned not only have £179 billion of income, but employ 1.3 million people in our economy. Britain has a rich history of mutuality, from co-operatives and community benefit societies to credit unions, mutual insurers and friendly societies. For example, this year marks the 250th anniversary of the first ever building society, which was founded in Birmingham with the principles that still guide the sector today.

The modern co-operative movement was born in Britain, as my hon. Friend the Member for Oldham West, Chadderton and Royton noted. In 1844, a small group of artisans from Rochdale came together to form the first modern co-operative, the Rochdale Society of Equitable Pioneers.

Paul Waugh Portrait Paul Waugh
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My hon. Friend may not be aware that four of the original 28 Rochdale pioneers were warpers and weavers from Spotland Bridge, which is where I grew up. That makes me incredibly proud of the sense of working-class ingenuity and self-help that lives on today. Directly to my hon. Friend’s point, does he not think that the most important statistic about co-ops is that co-operative start-ups are twice as likely to survive beyond the first five years as any other start up?

Mark Ferguson Portrait Mark Ferguson
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That point is very well made, and my hon. Friend is right to be proud of his forebears, who were doughty working-class politicians and representatives of his area, as he is.

The Rochdale principles, established by the Rochdale pioneers, have formed the basis of modern ideals for the operation of co-operatives across the globe. The UN General Assembly declared 2025 to be the International Year of Co-operatives, recognising the positive impact that co-operatives have around the world.

The Government have made clear their strong commitment to supporting the co-operative sector, and we have already begun to make our commitment a reality. At her Mansion House speech last November, my right hon. Friend the Chancellor of the Exchequer announced measures to support the growth of co-operatives. That included welcoming the establishment of an industry-led mutual and co-operative sector business council, which is already providing a powerful voice for the sector. The Government have been working closely with the council to understand what the sector needs to grow further, and the council has been developing sector growth plans, which we look forward to receiving.

Mark Ferguson Portrait Mark Ferguson
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I have to make progress—sorry.

Additionally, the Government asked the Financial Conduct Authority and the Prudential Regulation Authority to produce, by the end of 2025, a report on the wider mutuals landscape, which is well under way. The Government are continuing to fund the Law Commission’s independent review of the legislation that governs co-operative societies in Great Britain, which is expected to be published later this year. That review will consider ways to update and modernise the legislation for co-operatives and community benefit societies, including on methods of raising capital, to ensure that those societies operate in a supportive regulatory and legislative environment. That is exactly the sort of access to capital that my hon. Friend the Member for Norwich North referenced. The Government look forward to reviewing the report when it is published, and will consider its recommendations closely.

Of course, our commitment to doubling the size of the sector is an ambitious target that requires a cross-Government effort, as my hon. Friend the Member for Oldham West, Chadderton and Royton rightly noted. The Treasury works closely with other Departments on achieving that ambition, and will continue to do so, and the Department for Business and Trade has also taken steps to support the sector. It has announced a call for evidence to explore how the Government can better support co-operatives, and has included co-operatives and alternative business models in its business support initiatives, such as the growth hubs and the business growth service.

The Ministry of Housing, Communities and Local Government has provided support for co-operatives in its Pride in Place strategy. Its new co-operative development unit will work closely with local and combined authorities to support the growth of local co-operative and mutual economies. Beyond those examples, Departments across Government, including the Department for Environment, Food and Rural Affairs and the Department for Culture, Media and Sport, have been considering how the co-operative sector can support their priorities. This is a united, cross-Government effort that reflects our commitment to a diverse and resilient economy with a range of business models.

As today’s discussion has shown, the Government remain committed to supporting the growth of the co-operative sector now and in the future, recognising the important role of co-operatives and mutuals in our economy. I thank all Members who spoke in this important debate—because co-operation is an essential part of rebuilding Britain.

15:57
Jim McMahon Portrait Jim McMahon
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First, I want to say how pleased I am at the turnout for this debate. It recognises the importance of co-operation in our communities, our economy and our politics. One thing that I observe in Britain today is that many people feel, in politics, the economy and society, that they are powerless, and there is something in this debate about how we collectively rebuild.

The fact that this debate has had cross-party support—from Northern Ireland to Norwich, and from both the Liberal Democrat and Conservative shadow teams—just shows that, in the end, success can have many fathers. When we can build something that is positive and brings people together, it can act as a magnet for people genuinely to come to, so I thank Members for having this debate.

My final point is for the Minister on his first outing at the Dispatch Box. He undertook it with flair and enthusiasm, and I am sure he has great things ahead.

Question put and agreed to.

Resolved,

That this House has considered Government support for the co-operative sector.