It is a pleasure to support my hon. Friend the Member for Preston (Sir Mark Hendrick) in bringing this important issue to Parliament for debate. It is also impressive that there is so much cross-party support for the Bill, and I thank my hon. Friend for working so closely with civil servants and Treasury Ministers on this important topic. It is never easy to bring any topic to the House with so much cross-party support, but my hon. Friend has demonstrated in the past that he is very capable of working in a team. I saw the sterling work he did on the Committee for HS2 and I know that he worked hard as part of a team to ensure that Preston was recognised as a city in 2002.
My hon. Friend’s association with the Co-operative party and movement is not a recent one. Between 1984 and 1994, he was secretary of the Salford Co-operative party. He mentioned the shirt he bought 40 years ago for £1. It is the same age as me, which shows the House how long his association with the Co-operative party has been. I pay tribute to him for all the work he has done on bringing the Bill forward.
The principles of co-operation and mutual support have roots in both conservative and socialist traditions, and the histories of the co-operative movement and the Labour party in this country are closely intertwined. Indeed, the hon. Member for North East Bedfordshire (Richard Fuller) eloquently set out how there is support in both our parties for the co-operative movement. The relationship was institutionalised in 1927, and the Co-operative party and the Labour party entered into an electoral agreement to stand joint candidates at election. It is fantastic to hear so much support for the Co-operative party from across the Chamber. If anyone wants to stand on that ticket at the next election, our doors are open.
It is fantastic that this Bill also has the support of the Co-operative party, and I know that my hon. Friend the Member for Preston is proud to be a Co-operative party and Labour party Member. To this day, both parties continue to make the case for co-operatives, and friendly and mutual societies, which all give us a greater say and stake in institutions that affect our lives and play such an important role in improving equality and productivity at work. The hon. Member for North Devon (Selaine Saxby) talked about that in relation to the opportunities that are brought for young people, and I think we can relate to that in all our constituencies.
Co-operative and mutual societies have never been more important in the UK’s economy and public life. More than 7,000 co-operatives are operating across the UK, with a combined turnover of almost £40 billion, and some 200,000 people earn their livelihoods directly through co-operatives. They trade in sectors as diverse as agriculture, renewable energy, retrofitting, the creative industries, manufacturing, wholesaling, retail and finance. Many Members have cited examples from their own constituencies. Co-operatives have also proven resilient in the face of hardship. The pandemic was an incredibly difficult time for many British businesses, but the co-operative and mutual sector grew by an impressive £1.1 billion in 2020, despite the economic challenges resulting from the national lockdowns.
The hon. Member for Hastings and Rye (Sally-Ann Hart) talked about how mutual or co-operative models can provide significant business advantages. As she pointed out, the resilience of co-operatives is rooted in the higher levels of productivity that can result from employee ownership. In the United States, the National Centre for Employee Ownership tracked the performance of more than 57,000 firms and found that employee ownership can greatly improve a business’s productivity and chances of success.
That resilience and strength allowed the mutual sector to play such a heroic role during the pandemic, by plugging gaps in Government support for communities across the country. The hon. Member for Warrington South (Andy Carter) talked about how mutuals play a particularly important role in rural communities. For example, Arla farmers contributed 900,000 litres of long-life milk to Government grocery packs for vulnerable people during lockdown, and the Little Pioneers nurseries, run by the Midcounties Co-operative, kept nurseries near hospitals open and affordable for the children of key workers. They also offered additional temporary places for key workers who were unable to rely on their usual childcare arrangements and developed a frontline hero support fund to subsidise fees for key workers’ families.
However, despite the fantastic contribution that co-operatives and mutual societies make to society and the economy, outdated legislation has prevented the sector from reaching its full potential. The hon. Members for Southend West (Anna Firth) and for Darlington (Peter Gibson) said that the mutuals sector in the UK is relatively small compared with what we find in other countries. Fewer than 1% of businesses in the UK are co-operatives. Germany’s co-operative economy is four times the size of the UK’s. In Italy, co-operative enterprises generate close to 40% of GDP in the province of Emilia-Romagna, which has the lowest socioeconomic inequality of any region in Europe. The growth of
co-operatives in this country is being held back by a legislative and regulatory framework that is not designed for co-operative businesses. The unique structure of co-operatives, mutuals and friendly societies means that they are often excluded from traditional investment methods.
Sadly, the sector is also under threat from demutual-isation. There was celebration across the co-operative and labour movements last year when members voted to reject the controversial takeover of the insurer Liverpool Victoria by the private equity firm Bain Capital. I want to take a moment to recognise the work of my hon. Friend the Member for Harrow West (Gareth Thomas)—he is not in the Chamber—and others who fought to protect the mutual status of this historic firm. However, as my hon. Friend the Member for Preston made clear, demutualisation remains a real and present threat to the sector. Importantly, the Bill will help to ensure that mutual capital is maintained for the purpose intended.
As my hon. Friend the Member for Cardiff North (Anna McMorrin) pointed out, the Opposition believe that further legislation is needed to secure the future of the sector, for example by giving co-operatives more freedom to issue perpetual capital to fund investment. I thank my hon. Friend, who introduced a version of this Bill and who has done a great deal of work to advance the issue, on which we all agree. We recognise that the Bill is an important step forward. The Labour party will give it our full support. I thank my hon. Friend the Member for Preston and all the Treasury Ministers who have worked so hard on the Bill.
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