Co-operatives

Chris Stephens Excerpts

Thursday 14th July 2016 Westminster Hall

[Stephen Doughty]

I absolutely agree. The challenges, the additional pressures and the disproportionate impact that legislative and other changes can have on the self-employed are often not highlighted enough in this House; they can have a much bigger impact than they would have on a larger company, for example. We need to do all we can about that, and the co-operative movement is clearly playing an innovative and key role in trying to address those changes. The interests of self-employed workers are not well represented in our policy making, with the result that they face unnecessary regulatory burdens and barriers. I am proud that the co-operative movement is championing our self-employed, who make such an invaluable contribution to our economy and represent such a growing proportion of our labour market.

As a Welsh Labour and Co-operative MP, I want to highlight some of the work that is going on in Wales and the contribution that co-ops make to the Welsh economy. In 2015, the Wales Co-operative Centre launched its report on social businesses in Wales. That report outlined the scope and scale of the sector, its performance and the many opportunities for further development. The term “social businesses” includes social enterprises, co-operatives, mutuals and other employee-owned businesses. We have seen the statistics for co-operatives’ contribution to the UK economy as a whole; the report found that the total value of the social business sector in Wales is £1.7 billion and that it employs over 38,000 people. Social businesses tend to be more active in deprived areas than other small and medium-sized enterprises and to employ and procure locally, which suggests that they make an important economic contribution—perhaps a disproportionate contribution—in some of the poorest areas of the country.

Social businesses are a robust and dynamic sector, confident about the future. Indeed, 69% of social businesses in Wales expect turnover to increase in the next two to three years. Women are also keenly represented in leadership positions, with 35% of social businesses reporting a majority of women in leadership roles, compared with 19% of SMEs. Women’s leadership in business and the corporate sector is often discussed in this House, but here again we see the co-operative sector leading the way in putting principles into practice and ensuring that women are occupying a majority of roles. Some of the larger corporates and businesses in this country would do well to learn from that example of the benefits that come from ensuring that the equality that exists in the country is reflected in the boardroom, in decision making and in economic practice locally. It highlights how the co-operative movement is at the forefront of addressing some of the key problems that exist in our labour market as a whole and shows innovative practice in moving forward.

[Chris Stephens (Glasgow South West) (SNP)]

Does the hon. Gentleman support the work of the Wales TUC and the Wales Co-operative Centre, which is dealing with some of the challenges he describes in the labour market, including middle-aged unemployment, school drop-out rates and increasing youth employment?

[Stephen Doughty]

Absolutely. As the hon. Gentleman rightly mentions, there is a strong link between the Wales Co-operative Centre and the Wales TUC, and indeed with other trade unions in Wales. It is that type of partnership and co-operation between those who share common aims and values that is driving forward some of these agendas that do not get a lot of attention but should. I know my colleagues in the National Assembly are driving this issue forward in the areas where Wales enjoys devolved responsibility. We often work closely together as Co-operative MPs and Assembly Members to address those issues and to ensure that we are doing what we can, both here in Westminster and in Wales. I am sure that is also the case elsewhere with our many councillors throughout the country.

I know other Members wish to make contributions—I am looking forward to hearing them. I believe that co-operatives are a great and important example of how people can come together to help each other. They are also a great example of self-reliance, which we should continue to support and celebrate. Co-operatives have brought about trust and a sense of values and ethics that we sometimes do not see in other parts of economy but, crucially, this is not about some slightly odd, unusual or marginal part of the economy. Co-operatives are a growing, vibrant and dynamic sector, creating jobs, delivering growth and providing opportunities in areas and sectors of the economy that are simply not being provided by other forms of business model. I hope the co-operative sector continues to grow and to have the support it needs from all levels of government in the UK to go forward in the years ahead.

--- Later in debate ---

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I note that, as yet, you have not received your phone call to go to No. 10. Good luck with that.

I congratulate the hon. Member for Cardiff South and Penarth (Stephen Doughty) on securing this debate and on his excellent speech. I have always been a supporter of different ownership models within the economic sector, including co-operatives. Co-operatives should be encouraged. Furthermore, a clear indication of the co-operative model is when co-operatives work with the trade union movement. That should not come as any surprise to us, because the key goals of the trade union movement and the co-operative movement are very similar. They have mutual aims and deal with shared challenges in areas such as employment, innovation, education, lifelong learning for working people, social inclusion, equality and looking after our environment.

It comes as no surprise to me to learn that workers in co-operatives have good working conditions and that co-operatives act in the interests of workers’ experience and ensure that workers have strong labour rights. There is dialogue with workers, who are kept involved; co-operatives ensure that workers participate in decision making. As I have said, co-ops and unions share similar historic roots and common values and aims, including the social and economic wellbeing of the community and the promotion of economic sustainability and social innovation.

Of course, that work includes democratising the economy and making sure that there is a fair distribution of resources, because the economy cannot just be left to multinational companies, which do not often follow the aims of the co-operative movement.

There is high trade union membership in the co-operative movement. Therefore, workers are paid more in the co-operative economy than they are elsewhere; they have better contracts, such as open-ended employment contracts; and there is a low level of conflict between those working in the co-operative sector and those in management.

Job creation and protection is a key driver of joint work between the trade union movement and co-operatives. There is participation in co-operatives even in the building sector. I welcomed the dialogue in 2012 between Co-operatives UK and the TUC, which have a common agenda, to develop a common statement of best practice so that workers’ co-operatives can emerge from the public sector to deliver services across the UK. As I mentioned in my intervention on the hon. Member for Cardiff South and Penarth, work has also been done in Wales to tackle the issues affecting the Welsh labour market. Such work has to be encouraged, because we have middle-aged unemployment on the increase, we have to deal with those who have dropped out of school without qualifications, and of course we need to continue the work increase youth employment.

The Scottish National party manifesto in 2016 said:

“We will encourage and support third sector organisations, social enterprises, and credit unions to enter the market place to fill gaps in the provision of services or to offer alternatives to current providers that are not offering services people can access easily or affordably. This includes energy, banking, payday loans, debt management, and funeral planning.”

The most sensible decision that I have ever made about my finances was when I was an employee of Glasgow City Council and I joined the Glasgow Credit Union, the largest credit union in the UK. It was probably the best financial decision I have ever made, because membership of a credit union encourages sensible borrowing as well as saving. I would like the credit union movement to flourish over the next few years, because too many areas in our country are falling into bad debt and having to deal with the associated issues.

Research has shown that money worries and debt problems can lead to ill health, absence from work and low productivity. So just as I received an education when I was a young person entering the workplace and joining a trade union, we need to educate young people about money and make it easier for adults to save and borrow via credit unions. If we continue to promote credit unions, it will save public funds in the long term.

It also comes as no surprise to me that the co-operative model is a success story in these difficult times, when we see austerity across the EU. As someone who lives in Scotland—I assure you, Mr Hollobone, that Scotland will remain in the EU—I know that co-operatives add 5% to the GDP of every single EU nation, and so they are hugely important for economic and social development. I will support the motion this afternoon.