I congratulate the hon. Member for Preston (Sir Mark Hendrick) on introducing this private Member’s Bill, and it is a great pleasure to take part in the Second Reading debate. I am very supportive of the measures in the Bill, and I know that the Government have also indicated their support. To that end, I do not intend to speak for too long, but I want to reflect some of the views that my constituents have shared with me. Before I do that, I want to speak about the importance of the co-operative movement on our high streets. As somebody who grew up in the 1970s, I remember my mum shopping in the Co-op because she got her dividend stamp. She got rewarded for supporting a local supermarket on our high street. I have to say that I am a member of the Co-operative. I have my little card, and when I go into the Co-op in my village to do my shopping today, I will get rewards for doing that. I am proud as a Conservative to be supporting the Co-op in Cheshire.
It is not just the Co-operative superstores, there are many insurance mutuals on our high streets. I suspect that many of our constituents do not realise—I certainly did not until I started looking into this—how important mutuals and co-operatives still are to the high street today. It demonstrates the longevity and importance of this business model, so I am pleased that we are supporting the Bill.
The Co-operative in Warrington is among the strongest supporters of community activity. It regularly contacts me to ask if we will support community initiatives. It recently contributed to one of my local playgroups, helping to provide new equipment for the children. Incredibly, that money is raised by people shopping and then given back out into the community. Co-operatives provide real value.
In some respects, it is surprising that the co-operative sector in the UK remains relatively small compared with similar economies. Like many colleagues in this House, I have received a significant amount of correspondence on this Bill from constituents. When talking to a dairy farmer in Lymm, I was struck by the importance of co-operatives for that sector. He gets up very early in the morning to look after and milk the cows, and then waits for the milk tanker to arrive. The business model he follows means that he works with a co-operative to negotiate with the major supermarkets and major dairy companies. He told me, “I simply wouldn’t be in a position to negotiate with supermarkets and head offices all around the country if I didn’t work with a co-operative that generates support and profits.” Co-operatives are experts in negotiation, and they are incredibly supportive when working with farms.
What is the overall impact of co-operatives on the economy? A 2021 report by Co-operatives UK identified that about 7,200 co-ops operate across the UK. Their turnover in 2021 was £39.7 billion, which was an increase from £38.6 billion in 2020. The co-ops employed about a quarter of a million people in 2021, with membership totalling 14 million. Between 2020 and 2021, the number of co-ops grew by 1.2%.
I will turn briefly to important elements in the Bill. It provides His Majesty’s Treasury with the powers to make regulations that would allow all co-operatives, mutual insurers and friendly societies to opt to restrict the use or dealing of their assets. I made that point in an earlier intervention on the hon. Member for Preston. There have been recent examples of co-operatives and mutual societies finding themselves under attack. That is why I support the Bill, which also brings friendly society laws up to date and establishes tax neutrality for mutuals’ deferred shares.
The impact of co-operatives on our economy and their members is broadly good. The Bill’s measures are, broadly speaking, updates to enhance the operating environment so that they can continue to serve their members and improve choice in the markets in which they operate. I know that the sectors face significant challenges. They are limited by issues with access to external finance, so it is important that we take that into consideration. The intention is that, where members of the society choose to adopt legal restrictions, the use of the assets will be limited to specific purposes in line with the objectives of the mutual society. The use of any other assets for those purposes would then carry legal recourse. That optionality in the regulations will be important in mitigating any potential negative impact. I know that the Government will continue to work with the sector, and I am very pleased that the Minister is in his place and that he will respond shortly. I encourage the Government to continue to work with the sector, to ensure that the regulations are appropriate and adapted to the needs of different mutual models.
Finally, I am pleased that Co-operatives UK fully supports of the Bill. It has carried out consultations with its members, which indicate that the measures enjoy widespread support. It has also said that the measures would bring
“significant new investment, innovation and development in a wide range of co-operatives, for greater economic, environmental and social impact.”
Likewise, mutuals have praised the proposals for offering more choice and competition in their markets, and for allowing them to serve their members with an enhanced operating environment.
In short, I support the hon. Gentleman’s Bill, which is clearly welcomed by the sector, and I look forward to continuing to use my Co-op membership card when I buy my tea this evening.
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