Co-operatives and Mutuality

Tracey Crouch Excerpts

Thursday 30th June 2011 Westminster Hall

[Tracey Crouch (Chatham and Aylesford) (Con)]

It is a pleasure to serve under your chairmanship, Mr Amess. I am grateful for the opportunity to speak in this important debate a few days into co-operatives fortnight. I congratulate the hon. Members for West Bromwich West (Mr Bailey) and for Islwyn (Chris Evans) on persuading the Backbench Business Committee to enable them to initiate this debate. I very much enjoyed the speech of the hon. Member for Islwyn. I loved the delicious irony of a boy from a mining community in the valleys who went to work for a bank that was bailed out by taxpayers crossing the picket line today to talk about co-operatives. I congratulate him enormously on that.

I am sure that many Opposition Members are surprised to see hon. Members on this side of the House taking a real and genuine interest in a debate on the co-operative movement. I hope that I can not only reassure hon. Members that we support co-ops and mutuals, but reclaim a bit of the movement back for the Conservative party. I was amused to read, in the Library debate pack, an opening line from Guardian journalist Tim Smedley, which read:

“Have you heard the one about the Conservative-led government encouraging public servants to form employee-owned mutuals?”

He went on to write that, “this is no joke.” I know that we are supposed to bristle at the Labour party’s missive to the media to call the coalition a Conservative-led Government. However, as a Conservative Back Bencher and member of the Conservative Co-operative Movement, if a left-wing paper wishes to highlight, even in a mocking tone, our support for co-operatives and mutuals, frankly, that is fine with me.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Can the hon. Lady tell us how many members of the Conservative Co-operative Movement there are? The 37 alluded to by the hon. Member for Hereford and South Herefordshire (Jesse Norman) does not suggest that it is much of a movement.

[Tracey Crouch]

As the hon. Gentleman mentioned, my hon. Friend said that there are 37 members, but the movement has only just been launched. We are a small but perfectly-formed group. [Interruption.] I may also add, thanks to help from my hon. Friends from a sedentary position, that there are 37 members within Parliament.

[Jesse Norman]

At the risk of intruding, would my hon. Friend, or perhaps the hon. Member for Harrow West (Mr Thomas), like to comment on the difference between the number of members of the Conservative Co-operative Movement and the number of Labour members of the co-operative movement within this House?

[Tracey Crouch]

I am sure that the hon. Member for Harrow West will deal with those questions when he sums up at the end of the debate. I am proud to be a member of the Conservative Co-operative Movement in Parliament, which has only just been established.

[Mr Davey]

Without wanting to intrude on this debate, I will not suggest how many Liberal Democrat hon. Members are members of a similar co-operative movement. I will simply say that there are 12.8 million members of co-operatives in this country, and they are the ones on whom we should focus.

[Tracey Crouch]

I agree with the Minister. If I may continue with my speech, rather than getting into how many members we have in each political party—

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I just wanted to clarify, for Hansard and for the debate, that there is a distinction between those Labour MPs who are Labour and Co-operative Members of Parliament and those who are members of the Co-operative party, but may not be Labour and Co-operative MPs.

[Tracey Crouch]

I am grateful for that clarification. The hon. Lady may be interested to learn that members of the Conservative Co-operative Movement have been considering whether, perhaps at the next general election, we may do something radical and stand as Conservative, Unionist and Co-operative candidates. That is under active consideration.

[Alun Michael]

It is important to emphasise that the Co-operative party is a separate party—it is a registered political party. A Co-operative and Labour MP has to be selected by the Labour party, and by the Co-operative party through a separate selection process. It is not just a question of the name; it has a very deep reality in our history.

[Tracey Crouch]

I thank the right hon. Gentleman for his intervention. The issue is under consideration by members of the Conservative Co-operative Movement. I think that we have just ruined any kind of cross-party consensus that we were having on the co-operative movement. The Conservative party should be congratulated on the fact that it has now established this movement in its own party, and I hope that Opposition Members will consider that to be an important step forward.

As I was saying before I was sidetracked, there are many reasons why co-operatives and mutuals are good for growth and for society. Hopefully, I shall cover those reasons in what was supposed to be a very short contribution to the debate. Having spent too much time talking about it recently, one area of co-operative success that I will not focus on this afternoon is football. There have been many debates in the Chamber and on the Floor of the House about football club ownership, so I shall surprise colleagues by avoiding my main non-political passion and concentrate on other issues today.

The co-operative movement has a far greater pedigree than perhaps people give it credit for. The first co-operative was established in 1844, and there has been a steady increase in numbers across the country, with some gaining a foothold and becoming cornerstones of local communities. Examples that have already been referenced this afternoon are, of course, the Co-operative Group and the John Lewis Partnership. Together, they have an impressive combined turnover of approximately £18 billion.

It is often the small co-ops, which do not have the big brand names, that make the biggest and best impact in our communities. As a relative newcomer to the Conservative Co-operative Movement—run impressively, if I may say so, by my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman)—I have read with interest about the potential for co-operatives. Undoubtedly, they have intrinsic social benefits, promoting ethical, responsible, democratic and equitable ways of doing business. Inclusion, another positive contribution they make to society, ought not to be underestimated, not least at a time when we are asking individuals to do more for their communities. Co-operatives command cross-party support and that is to be welcomed. However, I believe that it is under this Government, with their desire for people to take up responsibility and seize the initiative, that they can really flourish as social enterprises and local providers.

We often hear co-operatives mentioned favourably in reference to their social, ethical and communal benefits, but many people who are not hugely involved in the movement will be surprised to learn of the enormous contribution that they make to the economy. In the south-east region, where my constituency is located, 328 co-ops now employ more than 13,000 people and generate more than £3 billion per annum. They take many guises, and I have read with interest about the coverage that they offer across a range of sectors, including housing, finance, agriculture and retail.

The Minister knows that I am heavily engaged in the debate about high-cost credit lending and debt management companies. I am therefore particularly interested in what co-operatives can offer the financial sector. My hon. Friend the Member for East Hampshire (Damian Hinds) and others who have already spoken have made the point that credit unions demonstrate particularly valuable and welcome traits. They foster a self-help and community ethos, while encouraging financial inclusion, affordable borrowing and prudent saving on a not-for-profit basis.

By law, each credit union must be founded with a common bond, which all applicants must satisfy before they can become members. In the case of the Medway Credit Union, which has a catchment area covering part of my constituency, the common bond is geographical. It restricts membership to those living and working within the union’s prescribed boundaries. It is seeing a steady increase on its 400 members. I appreciate that bonds are being considered as part of the legislative review, but the point is that each member is part of a community that has grouped together to offer a service that is independent of the state and is self-sustaining.

On top of the ability to promote saving and equity in an area such as Medway, where there is a significant personal debt problem, credit unions offer a very different and innovative approach to debt reconciliation, unique to their mutual nature. The advantage a credit union possesses over a high street bank or a loan company, for example, is its personal and flexible nature. Of course, someone can have a rapport with their bank manager, but he is ultimately concerned with generating profit. As part of a credit union, however, each loan that is taken out is given careful consideration by peers and fellow members who have one’s best interests at heart, and any loan taken out incurs a low rate of interest.

[Justin Tomlinson]

The point about the loan being in the best interest is absolutely essential to this. We were talking earlier about the Provident doorstep lending, with their nudge, nudge sales techniques. What a stark contrast the credit unions are, and what a real difference they make to the most vulnerable people.

[Tracey Crouch]

I agree completely. It is for that reason that it is right that credit unions receive so much support from across the House and from Government. They are great advocates of financial inclusion and can offer an alternative to high-cost credit that blights many, and submerges them further into debt. I look forward to visiting the Medway Credit Union in the autumn, and to helping to raise its profile.

That leads me on to an observation that many have no doubt already made. Small, particularly localised co-ops such as the Medway Credit Union, rely heavily on volunteers. Unlike private ventures, which have a large amount of start-up capital, they can call on little in the way of reserves. If we are to encourage the co-operative contribution to the economy, the Government must focus their energies and funding on providing start-up capital. It is encouraging therefore that the Government have recognised that and established a fund to help mutuals to meet such costs. I would also like local enterprise partnerships, which are meant to focus on providing localised services and on developing a devolved enterprise strategy, to explore how co-ops can become involved, attract investment and improve membership. The Government have previously committed to reducing the regulatory and administrative burdens so that it is easier to start and run a co-operative. I hope that we see that commitment become reality soon. We must then, with some cross-party zeal, start championing and promoting the co-operative movement.

I feel particularly strongly about the issue because, in the run-up to the general election, a major high street bank decided that its small branch in my constituency, with its over-the-counter service and ATM, was surplus to its global requirements. HSBC decided that Aylesford village did not fit into its strap line of “The world’s local bank.” Despite serving an elderly and local business population, the branch was closed without any concern about the impact on the local community. The village is now bereft of its post office and its bank. Given the thousands of names we had on a petition from Aylesford and the surrounding villages, I wish I had seen the example of villagers coming together to provide their own local counter services and forming a co-op. We could and should have done that, and the village would have been better off for it.

I promised a short contribution, but now I have wittered on about co-op opportunities that passed by. This debate, however, has allowed me to emphasise that the co-operative and mutual movement has cross-party support. Co-ops bring huge benefits to society and the economy, and they can demonstrate entrepreneurial brilliance and deliver rewards to all those involved. There are legal obstacles, which the Government are looking at, but it is hard not to want to get involved in this debate and to encourage the establishment of more co-operatives, to help to deliver what society and the country needs.

[Jesse Norman]

On a point of order, Mr Amess, I want to put on record my sense of the great discourtesy done to this Chamber and to the House by the hon. Member for Walthamstow (Stella Creasy), who came in, did not listen to the opening speeches, asked a series of questions and then left. That ought to be in the record.