Co-operatives, Mutuals and Friendly Societies Bill

Eleanor Laing Excerpts

Friday 28th October 2022 Commons Chamber

[Anna Firth (Southend West) (Con)]

I, too, congratulate the hon. Member for Preston (Sir Mark Hendrick) on introducing this important Bill. Having been elected in February, I have not yet had the pleasure of presenting a Bill to the House, but I hope to be successful in the ballot soon.

This is indeed, as colleagues have said, a very worthwhile Bill, and I am delighted that there is cross-party support for it. Of course, this issue has been raised in the House on a number of occasions and, like others, I read with great interest the speech by my hon. Friend the Member for Wycombe (Mr Baker) in his Westminster Hall debate last year. He spoke on the subject extremely eloquently, and I hope that the House will allow me the liberty of quoting a small part of his speech:

“A free society—one based on a market economy—really must have within it a place for co-operatives”.—[Official Report, 14 December 2021; Vol. 705, c. 249WH.]

How right he was. Co-operatives, mutuals and friendly societies are a wonderful resource embedded at the heart of our communities. They expand opportunity, wealth and aspiration throughout our great nation. They are democratically owned and controlled by their members, with profits reinvested in the organisations or among their memberships.

As has been mentioned, the co-operative economy is diverse, resilient and growing. At the last count, there were more than 7,000 co-operative businesses in the UK, with a combined annual turnover of almost £40 billion in 2021. Importantly, that has grown from £38 billion in 2019, and I am assured by the wonderful resource that is the Commons Library that the figure will grow again next year.

Co-operatives, mutuals and friendly societies trade in sectors as diverse as agriculture, renewable energy, retrofitting, the creative industries, manufacturing, distribution, wholesale, retail and finance. In 2020, the turnover of the co-operative economy grew by £1.1 billion. Of course, most co-operatives in the UK are consumer-owned, but in recent years we have seen a marked growth in community ownership, worker co-operatives and freelancer co-operatives. Many of the UK’s largest co-operatives comprise other businesses such as farmers’ co-operatives.

We must not forget what a powerful employment sector the co-operative movement is. Last year, it employed more than a quarter of a million people in the UK. It may surprise the House that that is more than the whole population of the new, sparkling city that is Southend, which I am sure the whole House agrees is the greatest city in the country and fully deserves to be the UK’s 2029 city of culture.

It is interesting to look at international comparisons as the UK co-operative economy is relatively small and growing more slowly than others. Co-operatives account for only 2% of our GDP, whereas the figure in New Zealand is 20%, in the Netherlands and in France, 18%, and in Finland, 14%. Less than 1% of UK businesses are co-operatives. In Germany, the co-operative economy is four times bigger than that in the UK. France’s is six times larger, and South Korea’s is 12 times larger. It is much the same story in insurance, where an estimated 11% of the UK market is provided by mutuals, compared with 47% in Germany and a whopping 52% in France. Perhaps the co-operative model is underused and something of a best-kept secret in our society and economy.

I hope that the Bill might go some way to bringing our laws up to date so that it is easier for co-operatives, mutuals and friendly societies to attract the investment they need to grow and thrive. At the moment, that is not as easy as it could—and perhaps should—be. The sector faces challenges not faced by other sections of the financial market such as banks and other companies. The Bill seeks to solve some of those challenges, and I commend the hon. Member for Preston on the excellent, thoughtful way in which it seeks to do that.

The Bill seeks to provide His Majesty’s Treasury with the power to create regulations to allow co-operatives, mutual insurers and friendly societies to choose to adopt legal restrictions on the use of their assets. As I understand it—I am sure hon. Members will correct me if I am wrong—the intention is that where the members of a society choose to adopt the legal restrictions, the use of their assets would be limited to specific purposes in line with the objectives of the mutual society, and the use of those assets for any other purposes would lead to legal recourse.

The Bill seems sensible to me, and I believe that it would have a direct, positive impact on my constituency of Southend West. At the heart of my constituency, on Leigh Broadway, we have the Co-op store, which is obviously the UK’s most famous co-operative. The Co-op manages to raise tens of thousands of pounds for local charities every year. I am sure that many Members know that Co-op members can choose from three local charities each month, and the money raised is split among the charities according to how many votes each charity receives. These charities are chosen by the members and this is a brilliant way to raise money.

Money is raised in a variety of ways, including the traditional raffle prize. This month, the wonderful Leigh Broadway Co-op is having a raffle for an excellent-looking hamper full of Halloween goodies, and raffle tickets are just £1 a strip. The proceeds will be donated to the absolutely brilliant Lady McAdden Breast Cancer Trust charity, located in Leigh-on-Sea in my wonderful constituency of Southend West. The Lady McAdden trust has been nominated by members of the Co-op as one of their October charities, and there could not be a better charity to support in October, which we all know is Breast Cancer Awareness Month.

I am a huge supporter of the Lady McAdden trust, and earlier this year I opened its new breast cancer screening centre in Elmsleigh Drive in my constituency, which has been the home of the charity since April 2022. A couple of weeks ago I attended its event at the Leigh community centre, and the refreshments were all provided by the fantastic Leigh Broadway Co-op.

The Co-op is also doing a lot to eliminate food waste and to ensure that the most vulnerable in our society are helped and protected. Thanks to Co-op members, an astonishing £100 million has been raised to support local communities across the UK.

Turning to mutuals, many bank branches have closed over recent years in Southend West, but the Nationwide, a mutual on Leigh Broadway, lives on. We all know that bank branches are a very important resource, especially for communities with an elderly population. The elderly are not always able to go online, and they rely on mutuals such as the Nationwide both by visiting branches to deposit money or pay in cheques and for financial advice.

I am so proud that the Nationwide in Leigh-on-Sea has a dedicated cost of living expert, who is helping the most vulnerable members of our society navigate the challenges caused by the cost of living crisis. The branch is also going out of its way to ensure that people who are not as tech savvy as some of the rest of us, particularly the elderly, are supported. Next week, it is holding a “tea and tech” event, which will teach people how to use online banking and apps to manage their money. Digital exclusion is a huge problem in our modern society, and it is really encouraging that our co-operatives, mutuals and friendly societies have recognised this and are doing all they can to help.

Co-operatives, mutuals and friendly societies have so much to give to our society. They play a hugely important role in our communities, and it is also hugely important that we ensure that there is diversity in the financial services sector and that we ensure that mutuals are able to raise the capital they need more easily without the need for demutualisation.

I am pleased to be able to support the Bill, and I am very grateful to the hon. Member for Preston for giving us the opportunity to debate this important issue.

[Madam Deputy Speaker (Dame Eleanor Laing)]

I call the shadow Minister, Tulip Siddiq.