Aaron Fernando: On July 3, the Co-operative Party in the U.K. launched a report at parliament outlining a strategy to double the size of the U.K.’s cooperative sector by 2030. The report, written by the think tank New Economics Foundation (NEF), was commissioned by the Co-operative Party and comprises a vision of the party’s goals. The report, titled “Co-Operatives Unleashed” reviews the current state of the co-op sector in the U.K., features case studies from other European nations, provides a snapshot of existing hurdles for the co-op sector, and offers policy recommendations for advancing this sector.

The report outlines the economic benefits of economies with healthy co-operative sectors. It cites statistics showing that co-ops have a 25 percent higher chance of surviving their first three years of operation than conventional businesses. They also have lower staff turnover and  lower pay inequality. The report notes that “the five largest co-operatives paid 50 percent more corporate tax than Amazon, Facebook, Apple, eBay and Starbucks combined.” In 2017, the U.K. had approximately 6,000 co-ops with 13.6 million members — lagging well behind most other OECD countries, according to the report. Meanwhile, workers in the U.K. have seen wages stagnate for 150 years and any economic growth has mainly benefitted a very small portion of the population, the report notes.

Yet “Co-Operatives Unleashed” stops short of advocating for co-ops as a total replacement for traditional businesses, and acknowledges that co-ops can face issues regarding scaling and may not be suited for “sectors involving high capital intensity… due to the higher cost and risks that members would bear.” Rather, the report advocates that co-ops should function as complement to traditional businesses. “When you look at the UK economy in light of Brexit and the challenges faced in the U.K. economy, a lot of those problems are symptoms for the fact that in the U.K. there isn’t a strong enough mix of different types of ownership,” says Ben West, communications officer with the UK Co-operative Party.

The UK Co-operative Party was founded a little over a century ago in 1917. A decade later it entered into an electoral pact with the Labour Party, agreeing not to run candidates against each other and sometimes running joint candidates under the Labour and Co-operative banner, says West.

Under this alliance, the 2017 Labour Party Manifesto contained the express commitment “to double the size of the co-operative sector in the UK,” the detailed strategy of which is laid out in this report. Though Labour Party, led by Jeremy Corbyn, is currently the opposition, “this piece of work is saying that if a future government of whatever party wanted to take on that commitment and make it happen, [these] would the steps be in order to actually deliver that,” West says.

It is noted in the report that the governments of counties with highly-developed cooperative sectors are obligated to recognize and promote co-operative businesses just as they would traditional enterprises — and that the same practices should be adopted in the U.K.

“When you look at other European countries, within their economies, a lot of their success is that there’s a really broad mix of different ownership types,” West says, citing the German energy and banking sectors specifically, where there is a mix of municipal entities, private firms, and socially-owned cooperatives.

The report puts forth a specific strategy of five interlocking steps for achieving this goal in the given timeframe:

1. A new legal framework for co-operatives

2. Finance that serves the co-operative agenda

3. Deepening co-operative capabilities through a Co‐operative Development Agency

4. Transforming business ownership

5. Accelerating community wealth building initiatives

These steps include the development of a legal framework which supports the development of future cooperatives and removes disincentives for cooperative growth. Specifically, this would involve the creation of legal structures, financial instruments, and mechanisms that co-ops can choose to use which would allow them to do things like lock in assets and wealth earned in the co-operative economy so that it stays in the cooperative economy.

Another strategy involves legally formalizing the ability for employees to buy existing businesses and transform them into co-ops. According to figures in the report, there are approximately 120,000 family-run small and medium enterprises that will undergo an ownership transfer in the next three years. If only 5 percent of those businesses transition into some form of co-operative model, the U.K.’s cooperative sector would double in size. As such, one of the strategies involves streamlining this type of transition.

Other policy recommendations in the report include technical support and information sharing for the sector, tax advantages for cooperative businesses, and the establishment of a National Investment Bank with “a mandate to supply patient risk capital specifically to the co-operative mutual and social enterprise sector.”

The strategy is multifaceted and ambitious, but the goal is for it to take place gradually over the next twelve years. “The mission now is as it was in the beginning: to stand up for the interests of the co-operatives that exist in the U.K., where there are laws that are holding back their expansion,” West says. “We want to create a favorable environment for cooperatives.”

The full report is available here.

Header image is screenshot from the report.

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Building a ‘human economy’

Co-ops have a key part to play if the world is to move to a “human economy” says Oxfam after it revealed that eight people are now as wealthy as the poorest half of the world’s population. The charity’s report on global inequality said eight men share $426bn (£350bn) between them.

Tax evasion and widening pay differentials are to blame. Oxfam called for a “human economy” which works “for the 99%”. This would include environmental sustainability, gender equality and more worker-owned businesses.

Enrich Sahan, head of the charity’s private sector team, said: “Co-operatives fit in with our work with social enterprise and Fairtrade”. “It’s part of our DNA, for instance when we helped set up Cafédirect, to be supporting enterprises around the world that are co-owned.”

He added: “We have been supporting enterprises in Nepal, Ethiopia and Rwanda, for example,” said Mr Sahan.

“It’s a big part of our approach to inequality… Profits aren’t going to line the pockets of billionaires, they go to the workers.”

How can co-operative women be bold for change?

This year’s theme for International Women’s Day was “Be Bold For Change” – but how did the co-op movement taking up the baton? We spoke to leading woman co-operators to learn how co-ops can be bold.

Ruth FitzJohn, president of the Midcounties Co-operative, said “Bang on about it: Let’s be bold and persistent in getting the repeated message out there. We do not have gender equality. This is not fair. This is not efficient. This is wrong. It is our job to do something about.”

Dr Chiyoge B Sifa of the International Co-operative Alliance

 

Dr. Chiyoge B. Sifa the regional director of the International Co-operative Alliance Africa, said “Be clear about what need to change in our lives and surroundings. Be clear about the change we want to see and what our share in it. Act confidently as agents and advocates of the change we what to see in the World. Be courageous in confronting challenges on the road to change. Change may be resisted and roadblocks put to hamper our quest for a better world. Determination is key to any successful ending. Winners are not quitters and quitters are not winners.”

Claire McCarthy, general secretary of the Co-operative Party, said “The history of the co-operative movement shows that women with a passion for change, can’t sit on the sidelines. Mary Barbour, Margaret Bondfield and Joyce Butler were just the kind of strong women, restless for change, that Donald Trump would disapprove of. If you don’t like the increasingly reactionary, intolerant, and frankly unco-operative nature of our political discourse in Britain, then get involved and be a part of changing it.”

Platform co-ops

“Inequality is one of the most important problems facing our society,” said Trebor Scholz, a scholar-activist who first coined the phrase ‘platform co-operative’ – a digital organisation owned and managed by an online member community. He added: “With the decline of the power of unions and the growth of unbridled capitalism and ecological degradation, we have seen extreme intensification and acceleration of inequality.”

Co-ops aren’t the sole solution, but he believes they are one of them, alongside peer-to-peer networking, new roles for unions and technologists and a commitment to commons open source. These are types of collaboration that see people working together to “respond to the failure seen over the last
40 years”.

Using the UN’s Sustainable Development Goals

Alyson Slater, chief network engagement officer at Global Reporting Initiative, said “The SDGs provide us with a globally agreed set of goals and targets for creating a better world. They are generally being embraced by the business community, and governments have made it clear that we cannot reach most of these goals without business engagement.

“Co-ops are in a unique position when it comes to the SDGs – they have  designed their business models to try to have a positive impact on some of the toughest goals – things like inequality, zero hunger, and life on land. If co-ops can demonstrate their contributions to these goals they may very well inspire other businesses to scale up their action too.”

Filmmaker Ken Loach at the Co-op Ways Forward conference:

“Co-ops embody values of common ownership, equal access, equality, that’s what we have to stress.”

Amelia Cargo, volunteer chair of the Group’s lesbian, gay, bisexual and transgender network, LGBT+ Respect:

“The Co-op Group has a really good reputation of being LGBT-friendly. We have been in the Stonewall Workplace Equality Index since 2005 and are the only retailer to have given evidence for equal marriage at Parliament. I was drawn to the Co-op’s commitment to local communities and its reputation as one of the most LGBT-friendly employers.”

• More from 2017 at 2017 In Review

Photo by CasparGirl

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