Wednesday, 7 October 2009

The Co-op Party - Ready to Face the Future

The current Conservative Party Conference marks the end of the round of political conferences as the last before a general election their pronouncements are more significant than usual. With the horror show of the Tory conference dominating the headlines it is easy to forget the Party that kicked the conference season off – the Co-operative Party. Mind the grim prospect of a Conservative Government with its attacks on the poor, the sick and the old does tend to concentrate the mind with its parade of ghastly injustice. To see Cameron and Osborne make the poor and weak pay for the sins of the rich and powerful is particularly sick.

The fact that the public sector is the only thing preventing the current recession turning into a depression seems to have escaped politicians from all the major parties who seem to be in an “who can beat up most on the public sector” contest.

So maybe in these grim circumstances it is understandable that we have forgotten all the good ideas that came out of the Co-op Party. I discussed the conference and the current state of the Co-op Party with Richard Bickle, Co-op Party NEC member and Secretary of the Society for Co-op Studies. For a young man Richard is something of a co-op treasure with his vast knowledge and enthusiasm for all things co-operative.

NM: Richard, the Co-op party started the current round of Party conferences north of the border in Edinburgh what was the mood?

RB: I found the mood generally upbeat and encouraging. Despite the challenging position that the Government finds itself in, there was a real sense that our time (as co-operators) has arrived. The manifesto [A Co-operative Agenda for a Fourth Term] is the most comprehensive statement of Co-operative Political Policy for many years, if ever, and Government ministers who spoke such as Douglas Alexander do appear to have 'got it' as far as the value of co-operation is concerned.

NM: With the Labour Party struggling in the polls and struggling for finance how many candidates will the Co-op Party be supporting at the forthcoming General Election?

RB: With a record number of MP’s standing down the Co-op Party list has been re-opened for a limited period of time. This is likely to result in a number of additional Co-op candidates in winnable seats. It’s too early to say exactly how many candidates we will be fielding in the election, but the objective is to maintain the current strength within parliament after the next election as far as possible.

NM: After a year-and-a-half long process and the input of hundreds of Party members, the Party has published its manifesto for the General Election. What do you consider to be the highlights?

RB: The most important thing for me is the comprehensiveness of the vision being offered. In terms of specific policies, I am encouraged by the practical and timely nature of the remutualisation campaign for the failed banks and by the new mutual model for domestic energy purchasing covered in detail in a pamphlet also published at the conference. This is a practical tool for changing the energy market which doesn't require Government action but is rooted in local collective self-help.

NM: If the Labour party only took up a couple of issues to include in their manifesto which would you like to see?

RB: Can I have three?

- The remutualisation of the failed banks;
- A serious commitment to prioritise the development of co-operative housing;
- Giving employees in failed firms a right of first refusal to take on ownership and management.

NM: The Co-op sector has had a new lease of life with the damage done to the global economy by the conventional shareholder business model why do you think some co-operators still do not see the Co-op Party as their political voice?

RB: The long-standing electoral agreement with the Labour Party tends to mean that the Co-operative Party is opposed by supporters of other parties. There is also a tradition of party neutrality that goes back to the Rochdale Pioneers ("Political and Religious neutrality" was amongst the original Rochdale Principles) which still has advocates today. This tradition worries about the potentially destructive effect of factionalism on boards and committees, and of the need for co-operative businesses to be able to serve the supporters of all parties and none.

NM: If Labour suffers defeat in the forthcoming general election, like Labour, the Co-op Party will be in for a period of rebuilding, is it up for it?

RB: Yes, definitely. I have been a member for the last 15 years and it has more life and vitality now than at any time I can remember.

NM: Clearly Richard these are your views and do not represent the Co-op Party or the Society for Co-op Studies but thanks for your time. Morning Star readers will find much they can agree with in the Co-op Manifesto, including the case for a land value tax, as well as some things they will be less supportive of. What is clear is that with new Labour running out of ideological steam there is much of substance in the Co-op Party manifesto for the Labour party to get its teeth into. Why not take a look at:

Thursday, 1 October 2009

The Lessons of Longbridge

In 2000 on Regional TV I was asked what the prospects for MG Rover would be with the Phoenix Four. I said that British Aerospace, one of the world’s largest engineering businesses, could not make it work and BMW, one of the world’s best carmakers could not make it work. I saw little hope that four blokes from Birmingham with an overdraft could make it work.

As you might expect I was both right and wrong. Right about their chances of building a successful car maker but wrong about their need for an overdraft. BMW’s largesse meant they made a great success of the business for themselves taking, according to the recently published report, over £42 million out of the business without taking any risks whatsoever.

It is incredible that these men burned their way through some two and half billion pounds! To take an inheritance from BMW of around £1.2 billion in assets and cash and turn it into a loss of £1.3 billion really takes some doing. As a result around £5billion has left the Regional economy leaving it reeling. Add to this the closure of Peugeot near Coventry, the collapse of LDV in Washwood Heath and now the threat to one of Jaguar Land Rovers plants in the region and is it any wonder that the West Midlands is the national unemployment black spot.

It now seems unless there is a dramatic change in Government policy the West Midlands has little future in automotive manufacturing. This is the result of a whole series of calamitous decisions handing MG Rover on a plate to the Phoenix 4 being just one. The death sentence on Longbridge was announced in 1998 when the Rover Group was sold by the Thatcher Government to British Aerospace. BAe had no real interest in volume car manufacture but did have an interest in Land Rover. At least given Rovers engineering weaknesses it had the sense to form a partnership with Honda.

In 1994 they sold the business to BMW for £800 million in theory making a profit having bought Rover for just £150 million from HM Government but one suspects they were happy to be rid. BMW’s purchase was at the time a defensive action. With BMW threatened with takeover needing a strategic acquisition to be bigger.

The rest as they say is history. BMW could not make any money out of Longbridge. Despite investment in new models, the Mini at Cowley and the Range Rover at Solihull, at Longbridge the wrong product in the form of the Rover 75 came too late to save the plant. This too was partly due to Government policy. For many years cars of this type were bought as a perk for their employees by companies thanks to the structure of company car taxation. Older readers will remember our motorways being full of Vauxhall Cavaliers, Ford Cortina’s and big Rovers all looking much the same with reps jackets flapping on hangers in the back. When the tax benefits disappeared and individuals started making their own car choices the trickle of hot hatchbacks from mainland Europe became a flood. Leaving Dagenham, Luton and Longbridge tooled up to build cars no one wanted. Unlike Rover, Ford and GM could bring into the UK models from their plants elsewhere in Europe sentencing their UK plants to death.

So what are the lessons of this sorry tale?

1. There is no substitute for a Government with an active long term industrial strategy. Most economies of our size try to maintain a mixed economy, in terms of services, manufacturing, energy and agriculture. This requires more than supply side initiatives or high spending on science. It requires a fiscal policy that favours investment over short term speculation and ensuring access to markets that are large enough to support large scale enterprises.

It is not just since Gordon Brown gave the Bank of England its independence that the economy has been run in favour of the money lenders but the way the monetary policy committee operates does not help. They do not have to take into account the effect on investment or on the value of the pound of their decisons. High interest rates have made it harder for businesses to invest in the UK and an uncompetitive exchange rate has made it hard for firms to export. The strong pound has a double effect it is harder to export but easier for those based in euroland to sell us their products. I am not arguing for joining the euro (although it would help) but if we stay outside we need at the very least a more competitive currency.

2. Ownership matters. The government should never have dumped Rover onto BAe. The lasses faire approach to the ownership of major businesses in Britain will come back to haunt us. Compare for example the French Governments approach to Renault. Here was a company that made a successful small (car its mini being the Renault 5) and like Austin Rover it could not make money out of manufacturing it. When it got into financial difficulties the French Government stepped in nationalising it in 1984. After making a huge investment in Renault and in its suppliers, completely restructured it was returned it to private sector in 1996. But here is the telling point. The French Government still maintains a fifteen per cent stake in Renault and even more tellingly from the point of view of the Rouge Roberto’s who work on the tracks (members no doubt of the CGT) three members of the main board are elected by employees and another is elected by employee shareholders. Such a board structure means four directors could not have run off with the workers redundancy money and pensions. Of course the proof of the pudding is in the eating and so at year end 2008 Renault had produced 2,382,230 cars and employed 129,068 people whilst weeds were growing through the rubble of Longbridge.

3. Manufacturing can only survive as part of a more general technological economy. The UK prides itself on its excellence in science. Science of itself however does not make money. Scientific breakthroughs are easy to copy because they are published; so that even Iran can split an atom or put a satellite into orbit. No. Money is made from technology. There is little new science in mobile phones, computers or modern cars. The science is pretty much old hat. There have been developments in new materials and miniaturisation but much of the science in modern products is half a century old. What we need for a vibrant manufacturing economy is an undergrowth of small and medium sized technology businesses. These are the firms that exploit new materials and new technologies first. Government spends a lot of money on science but needs to support the development of small technology businesses.

4. We do not need any more engineers or more children doing more engineering or science in school. We do need more demand for engineers. A manufacturing economy is driven by investment, new investment drives the development of new products, and new product development drives R&D and the acquisition of new skills. Too many businesses have learned half the lesson of the Japanese lean manufacturing philosophy. The constant pressure on costs. Obviously if you have a successful product and want to maximise profits you must keep pressure on costs. But any long term successful business also needs a constant stream of new products. Too many UK engineering and manufacturing businesses are just too lean they have little or no new product development and as soon as their product base gets stale they then get taken over or close all together.

5. There is real need for changes in company law. Firstly on board structures. Although why the trade unions who had made such an effort to get MG Rover for the Phoenix Four did not demand at least a seat on the board is beyond me. There are also issues about insolvency law and the law about pensions. We need to take these issues seriously. In retrospect it would have been better to have closed Longbridge and used BMW’s dowry to pay off the suppliers and the workers. It can never be right for Directors to be able to walk away as millionaires at the expense of their suppliers and workers.

6. It is never too late. Korea and the other Asian tigers developed as manufacturing economies from next to nothing. We can be better at manufacturing which would do wonders for our trade balance and the economy generally. It would also be good for our society. The collapse of manufacturing has huge social consequences changing our society into a less equal more divided one.

So let us hope this is not just another chapter in the history of decline of British industry. Manufacturing does matter and an active government can make a real difference.

Friday, 11 September 2009

Co-ops and the Battle Against Poverty in Venezuela

This year’s conference of the Society for Co-op Studies took place at its spiritual home of Ruskin College. Its model of working class education and spirit of enquiry fit closely with the society’s ethos. The conference theme was ‘Building a Co-operative Economy – Opportunities and Challenges’ and there is certainly a feeling amongst co-operators that the global capitalist crisis could be a huge co-operative opportunity.

One of the liveliest sessions was, ‘Empowerment through Co-operation in Venezuela’. Lead by Sabine Kienzl, “I am an Austrian by passport but a Venezuelan in my heart”, she said. Now at the LSE she first went to study micro-finance in Columbia and Bolivia supported by the Austrian Government but whilst there had witnessed the astonishing changes of the Bolivarian Revolution leading to her working with the Venezuelans to build links between the Social Economy sector in the United States and Venezuela and undertaking research in the Co-operative sector.

She pointed out that when Hugo Chavez came to power there had been only 910 co-op’s in Venezuela. Whilst just over 50% of the population lived in poverty and over 20% in extreme poverty. By 2007 there where 228,004 co-operative enterprises comprising 14 % of Venezuela’s GDP and 18 % of employment and poverty levels had been reduced to 33.6 % and those living in extreme poverty reduced to 9.6 %.

In sharing this vast increase in the number of co-op’s with the audience there was a collective gasp. UK co-op development bodies would be delighted with registering a single new co-op in a month. All this reduction in poverty cannot be put down to the rise of the co-op sector however it has made a significant contribution. How had this vast increase in co-op activity come about?

When in 2001, the “Special Law of Co-operative Associations” gave the State the responsibility for the promotion of co-op’s through education, improved access to finance, tax exemptions and their prioritization in public contracting. President Chávez argued that the social economy “brings together economic and social interests and gains strength from the dynamism in local communities and the participation of citizens and workers.” The rise began in earnest with actions to implement this law in 2003.

The key education role was taken up by the social missions. Misión Vuelvan Caras, renamed Misión Che Guevara in 2007 took technical education, in agriculture, tourism or construction, and classes on what the Social Economy was all about out to the people. Over 670,000 have been through these programs with their alumni creating over 10,000 new co-op’s.

Simultaneously a new co-op model was developed, the Social Production Enterprise (EPS), which reinvests a proportion of its profits back into the community. Today EPS’s have won some 30% of the value of supply contracts with state owned enterprises. Meanwhile the state-owned oil company, PDVSA took a key role by ensuring that 10% of its investment went into a social fund that is used for projects in education, health, infrastructure and the social missions.

PDVSA also made it a priority to “democratize” its supplier base. By opening up to small co-op’s, at the end of 2007, its suppliers included more than 3,000 EPS’s. It also introduced a program to identify supplier opportunities, a standardized EPS registration system, and an “EPS School” educating them how to do business with PDVSA and other government bodies. Once an EPS wins a contract it commits itself to contributing 3% of its profits to the Social Fund, providing yet further investment.

Alvaro Sanchez from the Venezuela Embassy explained how the development of participatory forms of democracy through the community councils had been a key driver in the development of the co-op sector. The people themselves had identified the needs of their own communities and had then set about creating the co-operative tools to tackle those problems.

It seemed appropriate that this discussion of bottom up decision making and grassroots democracy should have been taking place in the Raphael Samuel Room. Here was something that I would have hoped Raphael would whole heartedly approve, history being made from below. Mind as you would expect from co-operators some where sceptical of the role of the state in this exponential growth whilst others had reservations about Hugo Chavez.

Veteran Co-operator, Edgar Parnell, who many feel wrote the bible when it comes to the building of co-operative enterprises in the developing world made a particularly pertinent and measured contribution to the debate. He described the challenges of sustaining this astonishing level of co-operative development from his experiences in Botswana and Bangladesh. But his most telling comment was about the time he worked on the development of co-operatives on the sugar plantations of Jamaica during the Premiership of the charismatic Michael Manley.

He told delegates not to underestimate the challenges that the Venezuelans faced in building this alternative social and economic model and reminded them of the dirty tricks and destabilisation attempts that the CIA and the United States in collaboration with the large land owners had played in Jamaica to try and thwart their efforts at land reform and the building of a viable co-operative sector. In congratulating the Venezuelans on what they had achieved he said the challenges of sustaining such fast growth in the sector should not be underestimated.

Whilst a vibrant co-operative sector is not the only thing necessary for a more just society as President Chávez has said: “We must transcend capitalism [since] it is impossible, within the framework of the capitalist system to solve the serious problems of poverty of the majority of the world’s population.”

Monday, 3 August 2009

The Co-op Making the News

Like many of its readers I have shares in the Society that publishes the Morning Star. I also have a share in, according to Bonner’s history of British Co-operation, the ‘oldest working class and democratically owned newspaper in existence.’

That paper, first published on September 2nd 1871, is the Co-operative News. Its early days marked with “turmoil and agitation” saw it constantly in debt to its printers, the Co-operative Printing Society, the first of its type (if you will excuse the pun) formed of printers mainly from what was the Manchester Guardian.

Despite its difficult early life it won some influential readers, the Cambridge economist, Alfred Marshall, described it as, “the best pennyworth of news in the United Kingdom”.

The News, has been one of the few constants in the Co-operative movement charting all its ups and downs. All specialist titles face a constant fight for revenue and readers yet, like the Morning Star, it has adapted to the modern age with a strong presence on the web.

Today Co-operative Press shareholders include consumer co-operative societies, trade unions and since July 2004 (for just a tenner) individuals. It made a small surplus in the year ended February 2009.

Bob Bowman the current managing editor is determined to ensure that the fortnightly Co-op News remains essential reading for those interested in the sector. Like Co-operatives UK, the umbrella body of the Co-op movement, he has widened the breath of its contributors from across the co-operative, mutual and social enterprise sectors.

It is important that there is a space for the movement to talk to itself, about new opportunities and challenges and to celebrate the co-operative and mutual advantage to a wider world.

With the Co-op movement having an estimated turnover of £29billion there is plenty of business for the News to talk about. Despite being the ‘industry’ paper it does not avoid the big co-op issues. In a recent editorial Bob took on two of the most controversial issues facing the movement, that of whether there should be a single co-op retail society and the question of whether the best way for the co-op movement to have political influence is by running its own political party.

To hear some co-operators talk of the need for single co-op retail society is like listening to Francis Fukuyama talk of the ‘end of history’. In a healthy co-operative economy new co-op’s will be formed and ones that no longer serve their customers will be die. The important thing is for the rate of creation to exceed the rate of extinction so that the sector grows. Even if we had a single retail society it would not be the end of ‘history’ merely the beginning of a new phase.

Some of today’s fastest growing and innovative co-op’s are in sectors we could not have imagined a few years ago way beyond traditional co-op activities like food retailing. They are in renewable energy and telecoms, organic foodstuffs and even in cycle retailing! A single co-op retail society could only ever be a proportion of co-op retailing and the beginning of a whole new set of co-operative relationships.

When it comes to co-op politics, at its September conference, the Co-op Party will have to show there is life after New Labour. As the obvious weaknesses and contradictions in shareholder capitalism have become apparent the Co-op movement has had a new lease of life resulting in it being courted by the Liberals and the Tories.

Ideological renewal is vital as deregulated capital takes New Labour down with it. In a booming economy New Labour could both satisfy the rich and redistribute a modest amount to the poor. But as an ideological formation it can now be seen as a child of the boom. Now we face the inevitable bust the Co-op Party must show it has the ideological resources to survive as an independent force?

With the co-op sector in robust health these questions and more will be debated in Co-op News. Let us hope that as back in 1883 when the Co-op Woman’s Guild, grew from a column (Alice Ackland’s ‘The Women’s Corner’) in the paper, new activities and opportunities will grow from the voices, ideas and arguments within its pages for many years to come.

To subscribe to the Co-operative News go to:

Monday, 13 July 2009

Management and Motivation @ Co-ops 2009

A great debate at Co-operatives 2009 ran through the whole day starting in the Employee Participation and Engagement Workshop, continued into the Co-op Studies fringe meeting, rattled around the coffee bar and exhibition space and was still going at dinner.

It was whether the Suma Wholefoods flat pay structure could be a model for the movement. Bob Cannel of Suma explained that,

“We operate a democratic system of management that isn’t tied to a conventional hierarchy. Using an elected Management Committee to implement decisions and business plans, decisions that need the consent of every co-op member given at general meetings – there’s no chief executive, no managing director and no company chairman.”

“Working at Suma the workers must show initiative and be self-motivated, supporting one other in collective teams. Fulfilling regular daily tasks and being part of the management is a new skill which new members have to learn, whether their previous experience is on the shopfloor or in management”.

Having grown consistently for 30 years Suma believes that their success is based on all the members sharing responsibility. But the rub is all workers are paid the same net daily wage.

This flat pay scale is a good annual wage of around £25,000 for manual warehouse workers but is less attractive for conventional management grades. For Suma workers this pay reflects the collective management element and overall wage costs are industry average.

Bob says, “Multiskilling and equal pay underpins our operations; it allows us to use labour more efficiently to cope with the troughs and peaks, keeps people fresh and enthusiastic and it allows recuperation from stress. You can spend time throwing sacks in the warehouse after leaving a high responsibility position and then re-enter the fray in a different job.”

With employee anger at the huge rewards for failure in the banking collapse many find merit in the Suma model. But this is a recurring theme in management theory.

Is organisational efficiency driven by processes or people? If by process you need very smart (and expensive) people to design the processes, if by people you need highly skilled and motivated staff.

The idea that free individuals are more productive than slaves is not new. Indeed when Napoleon ruled most of Europe he argued it was because every one of his soldiers carried a marshal’s baton in his knapsack.

Suma workers are certainly free individuals, well educated and highly motivated. Their business model is one in which decisions are taken close to the point where issues arise and intelligence is evenly distributed across the system. Job variety means everyone has an awareness of the issues others face. With this business culture imposing any kind of ‘chief’ would be like trying to herd cats.

This raises questions for other co-ops. I find the term Human Resource Management makes me think of robots as a lot of HRM business thinking has come from Japanese manufacturing where process is paramount. Shorthand for this is the term ‘lean’ based on keeping constant pressure on costs.

A crude version of lean has been imported into Britain by our Business Schools, with all its subsets like, Just in Time, Total Quality Management or World Class Manufacturing attempting to guarantee success by a focus on process design.

Businesses that copy these methods almost always fail to achieve Japanese results because they only copy half the process. The other side of lean is about a continuous improvement, new product development and innovation. In the Japanese case hard to copy as this takes place in faraway Japan.

It is this creative side of the process which needs the anarchic atmosphere of a Suma. New ideas and radical innovation do not come from robots, from slaves to a system.
Also workers who just do what they are told when faced with a shock to the system are incapable of doing anything about it.

In the co-op sector we know that individual initiative in the workplace makes a huge impact to the bottom line. Having intelligence distributed across a system encouraging flexibility and problem solving close to the shop floor is good for business. No matter how talented a senior management team or effective a board of directors they would be swamped if they had to make every decision. Even the best designed business systems are abstractions of reality which means that ‘stuff happens’ and people have to deal with that ‘stuff’.

A balance has to be struck between people and process but importing corporate attitudes into co-ops is not the way. When new technology was driving industrial success Robert Owen saw the most important part of the business was the human behind the machine. “If due care as to the state of your inanimate machines can produce such beneficial results, what may not be expected if you devote equal attention to your vital machines, which are far more wonderfully constructed.”

The new buzz in management education is leadership but as Napoleons story shows without a well motivated and highly skilled army even the greatest leaders cannot guarantee victory.

The Answer is Blowing in the Wind

Roy Bailey and Tony Benn performed their, “Writing on the Wall” show, at this years Levellers day in Burford and if there is an issue where the writing is on the wall it is in the subject for discussion that day - the coming energy poverty crisis.

In a fit of free-market zealotry, when energy appeared to be plentiful, the UK pursued an everything must go privatisation policy - from electricity, gas, coal, nuclear and oil nothing was safe even the wires and pipelines went with the promise of low prices from competition.

Now we can see where this deluded strategy has lead us as we face the twin crises of energy security and climate change. New Labour Ministers often tell us ‘ownership does not matter’, seeing the powerless PM last summer, begging for hand outs from these global megacorps to pay for lagging for pensioners shows the nonsense of this view. Not only are we paying more for our energy we are also suffering from underinvestment in all forms of energy generation.

As for renewables forget it! The global giants refuse to invest in UK renewables as they seek higher short term profits from investments overseas. No wonder the UK is facing a looming energy gap.

Compare us to Portugal, with no indigenous carbon energy sources, it now obtains over half its energy from renewables. Having invested in wave power – technology developed here in Scotland – renewable energy that you can set your watch by.

Locked into free-market dogma progress on renewables in the UK is pitiful. It is not just the investment strike by the energy giants we have failed to give a lift to small scale renewables development with preferential feed in tariffs giving them the certainty they need for investment.

The lack of investment in our privatised energy infrastructure has prevented what some say is the rational development away from large scale, wasteful industrial scale energy production, towards a decentralised model producing energy closer to where it is needed using new technologies.

Despite the challenges to small scale energy projects there are today some exciting co-operative developments in renewables. One does not have to travel far across the countryside nowadays to see campaign posters against wind turbines

This resistance to private sector wind development can be overcome if the wind farms are owned by the communities in which they sit. Energy4All represented at Burford by John Malone was formed by Bay wind Energy Co-operative to promote community owned energy co-operatives.

Bay wind an Industrial & Provident Society, was formed in 1996 to allow a Cumbrian community to invest in a local wind farm. The original board of directors included 7 members of the community from Ulverston and Barrow. The first share offer in 1996/97 raised 1.2 million to buy two turbines at the Harlock Hill wind farm. In 1998/99 the second share offer raised a further £670,000 to buy one turbine at the Haverigg II wind farm site. Preference was shown for local investors, so that the community shares the economic benefits from their local wind farm. Around 40% of existing Baywind shareholders live either in Cumbria or North Lancashire with a wider number from the Northwest Region.

To date Energy4All has promoted seven community owned energy co-ops in England and another seven in Scotland. Speaking at Burford, John Malone said “Energy4All was created due to daily enquiries received by Baywind Co-operative from people looking to replicate the success of Baywind, the UK's first community-owned wind farm. Baywind co-op has generated enough green electricity to power 1,300 homes a year whilst paying an attractive return to its 1,350 members (averaging 7% per annum), and supporting local initiatives, such as the Baywind Energy Conservation Trust. Owning a wind farm increases awareness of and involvement in renewable energy developments, maximises financial returns from local resources, and mobilises environmental concern.”

No one thinks that wind of itself is the solution to our all our energy needs but anything that gets us out of the clutches of the global power giants and contributes to tackling the crisis we face is important. The largest Energy4All co-operative is Westmill Wind Farm in Oxfordshire. Officially opened by Jonathan Porritt of Friends of the Earth in May 2008, Westmill consists of five 1.3MW turbines, capable of generating sufficient electricity to power the equivalent of 2,500 homes. Over £4.4 million of share capital was raised from its 2,382 members, through community investment, who collectively own and control it.

The scale of the challenge is such we need to maximise all of our indigenous energy options. We need therefore to go much further. When oil was discovered in the North Sea, there was a realisation that it was going to be a long term risky business bringing it to shore, we established a public sector business to undertake this challenge -The British National Oil Corporation.

If we are to take on the challenge of developing a renewables industry particularly in the capital intensive wave and tide power arena we will need a similar public sector champion. We need a British National Renewables Corporation.

Unlike the wind you can set your watch by the tides around Britain’s coast and if the Portuguese can do it so can we. With a global shortage of credit we cannot wait for the private sector to come to the rescue.

If we want a significant renewables sector we need co-operatives but we also need a large scale public sector engagement.

If your community wants to investigate its own renewable energy scheme visit:

Wednesday, 20 May 2009

Nothing too good for the workers!

It is not everyday you get the chance to become a shareholder in a stately home! On the May Day Bank Holiday I was with friends at the wonderful Chesterfield TUC May Day festival with its combination of a march, speeches, first class entertainment and solidarity market stalls.

One stall caught my eye. I had first been to Wortley Hall longer ago than I like to admit it was the venue for the weekend schools of the old Midland Section of the Co-op Party. So I was delighted to see a stall for the upgraded Wortley Hall.

Wortley Hall, between Sheffield and Huddersfield, set in 26 acres of formal gardens and woodlands, is the Workers Stately Home having belonged to the labour movement for over fifty years. Originally the ancestral home of the Earls of Wharncliffe, we cannot be exact about when the hall was built but we know that Sir Thomas Wortley, born in 1440, lived at the Manor Wortley until 1510.

Sir Thomas, on the wrong side during the English Civil War, was taken by Parliamentary forces to the Tower of London. The hall fell into decay until the mid eighteenth century when Edmund Wortley commissioned its rebuilding. The family’s new wealth coming from coal mining in the South Yorkshire area, during the war the Hall was occupied by the Army, but after 1945 the hall once again fell into decline.

This all changed at a meeting in May 1950. Vin Williams, a former miner, proposed to local labour movement activists that Wortley Hall should become an education and recreation home for workers who would be the owners and on whose behalf the Hall would be run.

It was in semi-derelict condition and it took a great deal of voluntary work of South Yorkshire supporters to carry out repairs and restoration but on May 5th 1951 it was opened as an education and holiday centre for the trade union, labour and co-operative movement.

For over fifty odd years, successive generations have maintained the commitment and built on the sacrifices of those workers to keep Wortley Hall as the Workers Stately Home. Support has been drawn from across the labour movement, no one person or organisation can have overall control of the Hall, a member of the Co-op Union and registered as a Friendly Society. Wortley Hall has always been run on co-operative principles.

Today, with four stars from the English Tourist Board, the Hall is looking better than ever. The effort that has gone into bringing the accommodation and grounds up to the very highest standards has really paid off. The grounds laid out in an Italinate style on an eastward facing slope enjoy magnificent views over the vale of Worsborough are absolutely glorious.

The Hall can host conferences for up to 150 delegates, with seven conference rooms and 49 en-suite bedrooms, all equipped with direct telephone lines and internet connections. The most recent to be upgraded is the ballroom, paid for mainly by Unite branches, will be formerly re-opened as the Unite Ballroom later in the year.

Another recent development has been the creation of two holiday cottages set in the old stable yard. The area has some excellent cycling and walking as the Hall is not far from the Peak District and for those wishing to travel further afield there is the ‘last of the summer wine country’ of Holmfirth.

The grounds are also the home of the South Yorkshire Festival, celebrating workers worldwide, which takes place on Saturday 4th July this year, an excellent day out, in a delightful setting. If you are a member of a Trade Union, Labour or Co-operative organisation you are eligible to become an individual shareholder. This entitles you to participate in the running of Wortley Hall, attending the AGM, voting for the Management Board or standing for election having been nominated by your organisation or another shareholder.

Organisations and individuals can apply for shares which are in £5 units. So for a small sum you can have a share in the Workers Stately Home! For more information go to:

Tuesday, 5 May 2009

Well Done Wolves!

I must say I was delighted that Wolverhampton Wanderers won the 1st Division Championship. My delight was strictly for the fans! As someone who was a Wolves season ticket holder for many years and having lived in Wolverhampton I know how important the club is to the identity of the town.

When I was a fan they where riding highish in Division 1 - well top half of the table we had a good side in the early seventies (from memory, Parkes, Parkin Shaw, Bailey,Munro,McCall,Hibbit, Mcalliog, Richrds, Dougan, Wagsaffe) which did not have the success they deserved - and then I had the misfortune to follow them down to the fourth division and back to the present Championship.

The strong fan base the club have deserved a moment of success for all the support they have given the club. After years of having managers who said this club is too big for the championship they seem to have last had a manager who tried to win the division the club was actually in rather than assuming that promotion was a formality.

It is rather sad however that they will be changing places with West Bromwich Albion as it would have been good to have the Black Country derby games in the premier ship.

When I was a kid I lived on the Yew Tree Estate in what is now Sandwell and would go to Wolves, Albion and Walsall to watch the football. Mind in those days it was a cheap afternoon out!

Those where the days of Astle and Dougan, Alan Buckley and Mike Bailey, Bomber Brown and Waggy! We didn't realise that we where experiencing a golden age for Midlands football! Highlighted on Star Soccer with Stoke, Blues, Villa, Albion, Leicester, Derby and Notts Forest all brightening Sunday afternoon with Huge Onds! As we called the commentator Huw Johns!

Sadly modern football is no longer my thing. But nonetheless I wish the Wolves the very best.

Does rural Britain have to be a no go area for the left?

Every summer I like me to spend sometime visiting delightful rural spots to thank those who came before us in building our movement. I listen to fiery radical speeches of labour struggles of days gone by. I am not alone many of you will have been to places like Tolpuddle in Dorset or Burston in Norfolk home of the famous strike school or maybe to Burford in the Cotswolds to mark Levellers day.

There was a time when the left held its own in rural areas and there was the Country Standard in which to read about the struggles of working class rural dwellers and we had something to say to rural communities.

With the collapse in house prices and economic changes generating huge increases in food prices it is now time for us on the left to think again about rural life and the agricultural sector. Just because agricultural policy is the property of the European Union does not means that we have to give up thinking about what the shape and type of agriculture we should have here in the UK.

Despite being true blue on the electoral map ironically rural Britain is a bastion of the co-operative movement. The erosion of the co-operative sector in the cities has not been matched in agriculture where co-operation seems to have gone from strength to strength.

Each year Co-operatives UK publish an overview of the UK co-operative economy with a table of the UK’s top 100 co-operatives. At least half of them are agricultural co-ops.

The retail Co-op itself began farming in 1896 when it bought its first farm to grow spuds for its stores and a big expansion took place between the wars when food was scarce so it should be no surprise to find that the Co-op is the UK’s largest farmer with 70,000 acres across England and Scotland.

There are at least ten agricultural co-ops with a turn over of more than £100 million! There are some real giants like the Dairy Farmers of Britain Co-operative with two thousand farmer members turning over half a billion pounds. This in some way reflects the consolidation of the sector with the severe challenges the agricultural economy has faced over the last few years with poor prices and terrible weather that put farm incomes under massive strain.

The collapse in rural farm work has contributed to the pressure to close rural schools and post offices, although there are still around 135,000 workers employed in agriculture in the UK.

In fact the Rural and Allied Workers Trade Group of Unite continues to represent workers with the Agricultural Wages Board as well as in the growing sectors of horticulture and forestry. Many of the problems of rural work, of migrant labour and gang masters would have been familiar to Thomas Hardy and the Tolpuddle Martyrs.

There are still many opportunities for co-op’s and social enterprises to contribute to the rural economy as the Plunkett Foundation which provide seed corn finance and advice to support the start up and development of rural co-ops and social enterprises have shown. This helps the growth of small scale businesses such as community shops for example which large scale business is simply not interested in.

Successive UK Governments have followed a policy of managed decline reflecting their attitude both to the manufacturing and agricultural sectors here in Britain however with global warming affecting production the issue of food security will soon become a real one. We will face the challenge of having to put more land under cultivation, as well as issues such as that of low carbon agriculture, the hopes of organic farming, animal welfare and movement as well as the impact of climate change on soil quality.

With DEFRA seeming to believe that the UK can import huge quantities of food out of the mouths of those in the developing world for evermore. Frankly I feel the government have given too much ground to the Countryside Alliance. We have been lead on a huge wild fox chase over country sports whilst missing out on the real debate over the future of the land over which the chase takes place.

UK agriculture is a vitally important asset to our country and it needs to be expanded and developed not sentenced to lingering death under the common agricultural policy. I do not believe a one size fits all agricultural policy is appropriate in these changed circumstances and this is another vital issue that NO2EU - Yes to Democracy should be raising in the European Elections.

Thursday, 30 April 2009

What is good for GM is good for America!

I see in todays paper that General Motors is to be nationalised. And the main shareholders in Chysler are to be the United Auto Workers Union.

I wonder if in 1955, when the then Chairman and CEO of General Motors, Charlie Wilson, said: "What is good for General Motors is good for America." This is what he had in mind.

From the NICE Decade to the Sticky Brown Stuff

I wrote in Tribune on the 15th June 2007. I argued that Britain could not survive simply as a low tax deregulated financial centre. I said at the end of my piece that, “We could not live beyond our means on this scale forever. The end will surely come with a massive devaluation of the pound or a recession.”

I was wrong. It wasn’t either/or it was both! As the nice decade well a truly ends we are to face at least a decade of austerity. This economic mess has been caused by three things that we are ill equipped to cope with. Let’s face it we would have struggled with a simple down turn. There are still large parts of the country that have seen little from the boom years that benefited the few not the many!

Secondly the “credit crunch” the collapse of the secondary banking system will hurt us deeply because finacial services are a much bigger share of our economy (and an important contributor to our trade balance) than any other major economy.

I suspect the Treasury, having taken control of a large proportion of the banking system, has not done the sensible thing and separated retail banking from investment banking because they feel they may kill the Goose. They hope that our Investment Banking will rise from the ashes.

This I fear underestimates the third factor that will be the most significant element in the current crash. That is the fundamental restructuring of the global economy that is underway. With the most obvious sign being the G8 becoming the G20.

When Brazilian President Lula was humiliating Gordon Brown for the crimes of the white people who had been lecturing Latin America on financial prudence he was doing so from a position of strength. That day the market capitalisation of the Brazilian banks was larger than that of the UK banks.

Whilst we spend a decade digging ourselves out of the sticky Brown stuff this fundamental restructuring of the global economy will continue apace with China, India and Brazil growing at rates we can only dream of.

The Tory response to this is sadly predictable. No recognition that they where the original architects of the edifice that has now collapsed, the ones who laid the dodgy foundations.

No their answer is thrift! As if simply cutting spending would generate growth. Of course we have to live within our means. But the challenge we now face is to grow those means!

Once Gordon Brown knew he had to increase the growth rate of the UK economy. That was before he became a convert to neoliberal orthodoxy. It was his post neo-classical endogenous growth theory phase. He seems to have given up on endogenous growth a) because Michael Hesletine had a pop at him in the Commons commenting on a Brown speech that “Its not Brown its Balls”! (Gordon does like being laughed at).

And b) because when in office the only apparent vehicle for endogenous growth seemed to be a Prescott idea of regional development agencies. Stillborn underpowered and under funded bodies that have made little impact.

This does not mean the idea of increasing endogenous growth, essentially internally generated growth is a bad one, far from it this is the most important thing we can do. We have growing amounts of resource in our economy lying idle, people, land and machinery. The missing ingredient is capital.

That is why we have to continue to spend. Of course we must rebalance public spending and there will be cuts. There will have to be a reduction in spending on prestige projects like in defence, on foreign wars and an end to Britain’s nuclear weapons, spending on the Olympics will have to be scaled back, daft PFI ideas in education, health and transport will have to go and almost certainly the ID cards computer disaster that is just waiting to happen.

In areas where investment increases the competitiveness of the economy public spending will have to increase to compensate for the lack of private investment. Obvious examples are housing – a huge public sector house building programme needs to start now and we need to use the downturn to increase the capacity of the railways and to complete the electrification of all the major routes.

We also need to make huge investments in our energy infrastructure, from clean coal, nuclear, gas and all the renewables, especially wave and tidal. And we cannot afford to cut back on further and higher education. None of this is cheap. Our task is to increase the output of the economy not to just make cuts and hope.

Thrift sounds sensible when it comes to individual households. For the national economy it will lead to inexorable decline and a whole decade of thrift will see the newly industrialised countries over the hill and out of sight.

Tuesday, 7 April 2009


It was shocking to follow the saga of the Home Secretaries domestic arrangements. Hubby at home in Redditch watching porn whilst she was in, her ‘main’ home, her sisters back bedroom in London!

Whilst cabinet ministers are busy making do with two (or even three) homes at the taxpayer’s expense they are unlikely to want to reform Britain’s housing system. In what other job can you build up equity in a second home that you can sell tax free when your job ends!

They say the global banking crisis has its roots in an unsustainable housing model in the US sub-prime sector. Gordon Brown was quick to blame our difficulties on the US – except when President Obama was in town then he is nauseatingly obsequious - but here in Britain we have our very own sub-prime disaster.

The single biggest privatisation of the Thatcher years was not the utilities or the nationalised industries but the sale of our council housing stock. A privatisation that gave the original tenants a windfall gain, a house at less than market value. But that has over time seen a large transfer of wealth from the poor to the rich.

The propaganda that houses could only go up in value meant home ownership gave millions, many of whom had never had any debts an asset against which to build up huge debt. Collectively that mountain is now unsupportable with £1.2 trillion of housing debt and £1.4 trillion of total debt equivalent to the annual output of the UK economy.

Rather than creating a viable housing system Government policy has lead to disaster - the standstill in house building making this the worst housing crisis since the Second World War.

Back to Jacqui Smith, her Redditch constituency contains the largest new build housing Co-op in the UK. Redditch Co-operative Homes is a great success for those who live in its houses but with only 200 it can only make a small contribution to solving the housing crisis.

The UK Co-op Housing sector consists of some 35,000 homes in around 650 co-operatives sounds large but there are about 25 million homes in the UK. So why is the co-op sector after twelve years of Labour Government still so small?

One would not expect a party that felt here was no such thing as society to see the social benefits of housing co-operation. The increase in social cohesion and stronger communities is well documented in co-op’s. The 1988 Housing Act which introduced the current funding regime of a mixture of grants and private finance meant that large housing associations with strong management and a substantial asset base cleaned up most of what was a relatively small budget.

The sad fact is that Labour has done little to support co-op’s whether deliberately or as a sad side effect of its obsession with all things private the result is the same the registration of new co-ops virtually dried up in the mid 1990’s.

The Government through the Housing Corporation was only interested in a business model of housing management. Nic Liss, chair of the Confederation of Housing Co-op’s says that as the regulator the Housing Corporation simply had no interest in tenant involvement. Of course for that involvement to be meaningful a co-op does have to be relatively small so that members can have real control over their property.

The effect has been that today even the United States with 6,400 co-ops with 425,000 homes has a bigger co-op housing sector than the UK. Other countries also have significant co-op housing sectors, such as Germany (2.2million homes), Sweden (750,000), Norway (750,000), Austria (334,000), Canada (92,000) and Turkey with (1.4M). So how can we build a more substantial co-operative housing sector?

That is the remit of the independent Commission on Co-operative and Mutual Housing. Chaired by Adrian Coles, Director General of the Building Societies Association, it aims is to build the evidence for a long term strategic framework for the growth and management of the sector.

What changes in the law, taxation and general attitudes are needed to foster a growing co-op housing sector? The truth is that much of our housing policy and law is distinctly feudal in character after all what does the term ‘landlord’ imply? The very best landlords have often been local councils although as a council tenant for many years I know councils, even some run by socialists, do not always make good landlords!

Time to abolish landlordism I say!

For more information on the Commission on Co-operative and Mutual Housing go to: or

Open Letter To Co-op: Time to Boycott Israel

Like many co-operators I have been delighted with the run of good news about the Co-op Group and co-operatives of late. The decision to put ethics at the centre of our branding following the example of the Co-op Bank has proved to be a master stroke. Now at a time of recession when trust, such a vital comment of any retailer’s relations with its customers, is at a premium it could really come into its own. We have seen some stunning marketing of late making all co-operators proud of the whole co-operative ethic.

Our role in the fair trade movement has been exemplary and the range and quality of fair trade products sold in our stores is second to none. I was especially pleased given the difficulties the producers face that we are to begin selling Palestinian fair trade olive oil sourced from co-operative sources in some of our stores from the end of March. Olive oil exports are a vital ingredient in the viability of a future Palestinian state.

This brings me to the black spot on this fine record. I fully appreciate that we in the British Co-operative movement have long standing relationships with the Israeli Co-operative movement directly with co-operative organisations in Israel and through the ICA. Indeed there was a time when Israel seemed to be pursuing the kind of democratic socialism, many of us had dreamed of, with the Kibbutz movement, the Histradut and the co-operative movement it looked like a genuine ‘promised land’.

Many people in the 1950’s and 60’s looked to Israel like some had looked to the Soviet Union in the 1930’s. Now we have to face the sad fact that we where wrong. The recent attacks on Gaza and the elections in Israel have produced really shocking results. The complaint from Israel for many years was that they had no one to negotiate with now it is the Palestinians who have no one to negotiate with.

In January Len Wardle, Co-operative Group chair, wrote:

"The Co-operative Group board has decided to suspend sourcing products from illegal West Bank settlements. However, we will continue to trade with Israel and will seek to develop trading links with Palestinian farmers. The Co-operative Group only rarely curtails trade with particular countries or regions. However, in the case of the illegal settlement in the Israeli controlled occupied territories, it has proven to be all but impossible to ensure that supplies derived from the region are not perpetuating injustice and unfair terms of trade. We will no longer source dates, grapes and a number of herbs from the illegal West Bank settlements and will be phasing out the use of similar items from our own brand products."

Full marks then for developing links with Palestinian farmers and as Somerfield has sold products from the occupied territories at least we can put a stop to that but is our position tenable? With no end in sight to the occupation and settlements growing how can we be asked to police produce labelled as Israel is not come from settlements in the occupied territories?

If as Len points out “it has proven to be all but impossible to ensure that supplies derived from the region are not perpetuating injustice and unfair terms of trade”.
There is only one ethical course of action. There are numerous examples of mislabelling of produce we can not be asked to police this ourselves and in a way this misses the point. It is Israel that is undertaking an occupation that has gone on for far too long and we should therefore admit sadly that we have to stop sourcing produce from Israel whilst the occupation continues. Anything less would be hypocritical and would be undermining our own ethical principles.

In many ways we dragged our feet on apartheid South Africa lets us not make that mistake again.

Monday, 16 March 2009

The Hippy Co-op Comes of Age.

The collapse of confidence in conventional business models has drawn new attention to co-operative and mutual alternatives. More people are expressing an interest in worker owned co-op’s than ever before. In last years Co-op UK’s annual review of the Co-op economy the top performing worker co-op in the country was the Triangle Wholefoods Collective Ltd with a turnover of £24 million.

Triangle probably better known under its brand name of Suma is in some ways a caricature of a workers co-op! With its commitment to total worker equality and passion for organic, vegetarian and ethical products it’s like the “good life” turned into a business.

The Northern Co-operative Wholesale Society that went on to become the CWS was formed in 1863. Suma is the 21st century equivalent!

Reg Taylor already had experience of whole foods in London before he moved to Leeds and opened a retail shop, Plain Grain. He realised that if other whole food shops got together and worked co-operatively they could get a better deal for their customers.

Suma was started in August 1975 by Reg at a meeting attended by whole food shops, 8th Day, from Manchester; Alligator, York; Single Step, Lancaster; Maggie’s Farm, Durham; and Down to Earth, from Sheffield. They established a whole foods wholesaling co-op in order to supply each other.

Demand grew quickly and Triangle was registered as a common ownership workers co-op in 1977. Today Suma is a highly respected independent wholesaler of health and whole foods. Operating since, 2001 from its own large purpose-built warehouse in Elland, near Halifax it distributes over 7,000 different products to some 2,500 supermarkets, small retailers, caterers, hospitals, schools and prisons.

Suma’s ethics drive the way the business operates with a hundred plus multi-skilled workers who own a share of the business, all paid the same basic wage with allowances reflecting different work patterns and hours. They all usually do more than one job in any week. A driver, for example, will drive for three days and work in the warehouse for the other two, office staff too carry out manual tasks for one day a week.

There is no chief executive and any employee can put a proposal forward for consideration by the committee. The ethics also drive the activities of the business as they are as organic, green, vegetarian and fairly traded as they can make it going to considerable trouble to fulfil these objectives. Suma has grown consistently since 1974 and thrives in a fiercely competitive market by providing a better service to its customers and better jobs for its workers.

Suma are careful that when you buy a banded as well as their own brand products that each and every product has been chosen as much for its all round quality as for its vegetarian, ethical and health promoting credentials.

They are consistent innovators with a large range of own brand products. Suma was a pioneer of recycled toilet tissue and dairy free margarine. It avoids the “pills and potions” end of the healthfood market concentrating on recognised alternative remedies and was in the 1980’s an early importer of fair-trade coffee. I am particularly fond of its organic beers its Penumbra stout is particularly tasty!

Further it refuses to stock and distribute products from countries where human rights are known to be abused. The business has changed considerable over the years but, changes are democratically agreed and supported by the membership, not imposed by management and paid for by the workers. As we all get more conscious of the quality and provenance of what we buy Suma is ahead of the market.

They may sell lentils and look like hippies but Suma is a great co-operative success story and as they say “Suma is, at heart, a political statement that workers can successfully manage their own businesses without an owner/manager elite”.


Fairtrade Palestinian olive oil is being stocked in Co-op stores —
Good news on our campaign to get Palestinian olive oil into mainstream supermarkets. The Equal Exchange Fairtrade Palestinian Extra Virgin Olive Oil that is the first Palestinian product to receive Fairtrade certification will be available in around 300 Co-op stores from March 22nd at £5.99 a bottle.

Monday, 23 February 2009

Fair Trade? It's Just the Start!

We have a lively African Studies Centre, at Coventry University, bringing together students and teachers from across that great continent. Meeting them makes it harder to accept the terrible poverty many of them have left at home.

Africa never was a dark continent it is full of light and colour, rich in agricultural, human and mineral resources together with immense cultural riches in art, literature and today especially music.

Despite these riches the continent has been unable to escape the clutches of neo-colonialism, what Kwane Nkrumah called back in 1965, “the worst form of imperialism. For those who practice it, it means power without responsibility and for those who suffer from it, it means exploitation without redress.”

Escape from former colonial powers Britain and France, and newer ones like the United States or as is common today China is difficult. The rich countries argue that the solution to breaking the bonds of dependency is free trade.

Gordon Brown, even at this time of global economic crisis, has called for a revival of the Doha trade round. Rich governments make huge claims for trade reforms. Closer inspection invariably reveals the reason. They are the big gainers, whilst there is some trickle down to the poorer countries, the very poor get next to nothing.

How can trade liberalisation of itself help an isolated African village? For sustained economic growth yes poor counties need to increase their exports to the rich countries gaining foreign exchange so that they can invest in the capital goods needed to drive their development and trade barriers can hinder those exports.

But trade reform alone is not enough to lift the extreme poor out of poverty. Even if incomes get raised only a tiny proportion goes to the public investments needed to help them escape the poverty trap.

As global capitalism crumbles with many unsure of their jobs it may not be the best time to ask people to pay over the odds for their shopping. But that is just what many of us will be doing as fair-trade fortnight comes around again (23rd Feb-March 8th).

In a way it is a symbolic event highlighting the injustice of the current world trading system but for those involved its effects are real. FINE the international federation of fair-trade organisations defines it as, “a trading partnership, based on dialogue, transparency and respect, which seeks greater equity in international trade”.

The crucial thing is mutual respect between producers and consumers. For many years the UK retail co-operative retail sector stood alone in supporting fair trade. Despite its own economic weaknesses the concept so fitted with its values that it wholeheartedly supported fair trading initiatives. Even today when for some retailers fair-trade has become a way of increasing margins the Co-op has more fair-trade products in its stores than any other supermarket (and there is 20% off for fair-trade fortnight).

A good example is the conversion of its chocolate range to fair-trade. (Chocolate is a product I am unable to resist) When in the 1990’s thanks to structural adjustment programmes the cocoa market was liberalised Ghanaian farmers faced a grim future. To combat the threat in 1993, they formed a co-op - “Kuapa Kokoo" which in, Twi, means "Good Cocoa Farmers Company".

They sought to capture more of the value chain and having developed knowledge of the western chocolate market, decided to produce their own, branded chocolate bar. In October 1998 Twin Trading and Kuapa Kokoo came together, along with The Body Shop, supported by Christian Aid and Comic Relief, to found The Day Chocolate Company. That autumn, Divine, the first ever fair-trade chocolate bar aimed at the mass market was launched onto the UK confectionery market.

In 1993 it would have been extraordinary to imagine that in just fifteen years Kuapa Kokoo would have some 50,000 members in 1,200 villages, selling 40,000 tonnes of cocoa, turning over more than £20million representing 8% of Ghana’s output and nearly 1% of the world’s. Of course Ghana would have been far better off without structural adjustment programmes and we still need real trade justice but in the meantime Divine chocolate is just that. It can be found in Oxfam shops and as the source it means that the Co-op sells more fair-trade chocolate than all the other supermarkets put together.

More important however is the relationship that has been built between the producers and the consumers based on the principle that the producers should be paid what they need rather than the market rate.

This is just one small step but it is a beginning as Marx said in the Critique of the Gotha Programme “after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly—only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs.”

Wednesday, 4 February 2009

'Times they are a Changin' at the Co-op

As Bob Dylan is unveiled as the new weapon in the Co-ops campaign to show that ‘Times are a changing’ changes continue apace. In December, members of Lothian and the Borders Co-op voted to join the Co-op Group coming quickly after the takeover of Summerfield further enhancing the Groups UK food business.

Now the times are changing in financial services. With the dramatic collapse in confidence of the banks the Co-op and the mutuals have been seen as a safe haven. The proposed super-mutual with the merger of Co-operative Financial Services and the Britannia, the UK’s second biggest building society, creating a new £75 billion business signals the arrival of serious competition for the high street banks.

This merger is possible because of the new Butterfill Act, an act of parliament sponsored Sir John Butterfill MP allowing different types of mutual to merge. Financial mutuals have not been immune to the recession and the credit crunch but so far mergers have been amongst building societies. With some smaller societies coming unstuck in attempts to copy the aggressive business models of former societies like Northern Rock.

The Britannia is not in this category despite this credit rating agencies Moody’s and Fitch have downgraded the Co-op’s position to negative suggesting that the new group will be more exposed to wholesale funding markets. You may think that this is a bit rich coming from agencies that failed to warn of the credit crunch but this deal will weaken slightly the historically strong deposit to loan ratio of the Co-op and increase exposure to Britannia’s larger proportion of wholesale funding. There is little risk however for the 3 million Britannia members who will join the Co-op Group which pays out an annual dividend offsetting any risk to their annual loyalty bonus and it is these members who will be voting on the deal.

Both parties argue this is a merger from strength. Britannia has been a champion of mutuality offering better returns to its members. The new business has the potential to offer an even better service. For Co-operative Financial Services (CFS), formed from, the Co-op Bank, Smile the Internet Bank and Co-operative Insurance, this is good news. There has been some painful restructuring at CFS particularly in the insurance business (CIS) where big changes in adjusting to the world of online and telephone services and fewer home visits led to a number of job losses. Today’s CFS and Britannia make a good fit with remarkably little duplication in the two businesses offering huge potential for cross selling. They are committed to working with all recognised trade unions to effectively manage any changes but the £75 billion merger is projected to generate a modest £60million of cost savings good news for the workers in each organisation.

Britannia CEO Neville Richardson, and proposed CEO of the new Group says that, "This proposed merger offers a unique opportunity to create a new force in British financial services – strongly capitalised and with the scale to offer customers a full range of products and services that are ethical, mutual and co-operative”.

With over nine million customers and 350 branches this will lift the Co-op from a niche player to a high street fixture. Statistically you are more likely to get divorced than to change banks yet even before this merger 2008 saw a 65% increase in customers transferring their current accounts to the Co-op and a 40% growth in retail savings. With banking giants like HBOS and RBS shrinking before our eyes this is a golden opportunity for the Co-op to make a concerted pitch for their customers.

David Anderson Chief Executive of the CFS has described this merger as “transformational not just for the co-operative movement but for the UK Financial services sector as a whole.”

This is going to be a tough year for everyone in financial services but as Andrew Hill wrote in the Financial Times, “Britannia members should not hesitate to vote for the deal. They won’t get a windfall or an upfront payment those days are long gone. Membership of the Co-op offsets any small risk to their annual dividend posed by exposure to deadbeat buy-to-let landlords. Throw in the kudos of being joint pioneers of legislation aimed at bringing different mutuals together and the result is a rare warm glow at the heart of a very chilly financial services sector.”

Thursday, 22 January 2009

"They Planted for us to eat: We will plant for them to eat"!

That old Palestinian saying contains the philosophy of Al Zaytouna, the Palestinian Olive Tree Association, founded in 2004 a non-profit association working in all the Palestine agricultural areas that produce olives. The olive branch, used as a symbol of peace, is here a symbol of the Palestinians struggle for survival.

Palestine often said to be the home of the olive tree, has some of the oldest olive groves in the world, as much as 1500 to 2000 years old. With more than 12 million olive trees, covering nearly 200,000 acres they produce fruit that supports over half the population and dominate the agricultural landscape. But for Palestinian farmers the process of growing and selling their produce is an incredibly difficult challenge.

According to one of Zaytounas partners, War on Want, olive oil is the backbone of the Palestinian agricultural economy, providing employment for 65% of the population. But the last five years have decimated the industry with large swathes of olives groves being razed by Israeli bulldozers or burned to the ground by Israeli settlers. Large amounts of oil go to waste because it is too dangerous for farmers to harvest the crops or because of movement restrictions. Every year over half of the oil produced is literally poured down the drain due to their inability to access international markets and over the last four years the Israeli occupying forces have uprooted almost 400,000 olive trees with a value of over $60 million

This makes the hard lives of the Palestinians that much harder, but in response the Palestinian Farmers’ Union and a group of olive oil producers came together to form Al Zaytouna to find ways to protect their livelihoods and win new markets for their products. As an umbrella organization, Al Zaytouna, helps to organize farmers and focus their efforts in defense of their interests.

The Olive growers and olive pressers are organized into co-operatives with Al Zaytouna representing 14 cooperatives with a total of 1,700 olive oil producers. Six of the co-ops are organic although pretty much all Palestinian olive oil is organic because of the use of traditional farming methods and a key task is to help the co-ops obtain organic certification. Al Zaytouna is managed by an elected board of directors and run by a professional management team supported by specialized volunteer staff including several volunteers from overseas.

Just to show that the USA is not a monolithic bloc of evil doers another partner is ACDI/VOCA. The Washington based NGO dates back to the 1997 merger of Agricultural Cooperative Development International and Volunteers in Overseas Cooperative Assistance, two U.S. non-profit economic development organizations working largely in agriculture.

They have been remarkably successful under these astonishingly tough conditions. Al Zaytouna – supported cooperatives have eradicated the olive fly, a major threat to production, increased oil production some 40% between 2005 and 2008, created local committees that train farmers in harvest, storage and production techniques and provided improved storage equipment such as stainless steel tanks to maintain the oil's quality.

Even with improved products the growers need access to customers and this is where the UK end Zaytoun comes in. Zaytoun, a member of Co-operatives UK is a co-perative Community Interest Company. The Government developed the Community Interest Company (CIC) as a new type of company designed for social enterprises that wish to use their profits and assets for the benefit of the community. The first CICs were registered with Companies House in just 2005.

Since 2004 Zaytoun has imported more than 150 tons of olive oil (including now certified organic olive oil), as well as Nablusi olive oil soap, za’atar (thyme based herb mix), dates, couscous and almonds.

Heather Masoud of Zaytoun says that trade, while difficult in the current political climate, is the best way to make a difference: “The Palestinian people have long been associated with terrorism or victimhood in the popular media, and their rich culture and society has often been overshadowed by this emphasis on violence or extreme poverty. Aid donations, whilst necessary, rarely foster foundations for long-term prosperity and social revitalisation. Our trade with the Palestinian people has brought in excess of £1 million to their economy, and support for rural society.”

The current situation is indeed grave but as Heather says, “the current assault in Gaza largely does not affect Zaytoun’s supply chains. In the main the Palestinian producers we work with are in the West Bank”. However she adds, “The West Bank supply chain is also a vulnerable one; the Palestinian’s do not have any control of their sea or land borders or their air space. Relying on the Occupying force to ‘allow’ trade is a weak position and as we saw in Gaza the economy will be destroyed if Israel also decides to deny passage of goods there.”

In fact in Zaytoun did source couscous from a women’s co-op in Gaza but the business was no longer viable because Israel has not allowed any of their products to cross the border for the last 3 years.

We have all been shocked by recent events in Gaza but we can all support the Palestinians by buying Zaytoun Olive oil and their other products and it is time I think that we mounted a campaign to get their oil into our major supermarkets!

Interested in where you can obtain Zaytoun Palestinian Olive Oil?
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Friday, 9 January 2009

Ish Ash Osh Happy New Year For The Woodcraft Folk

New Year is a time for the young and this year could be a particularly good one for that most important of our youth organisations, the Woodcraft Folk. Founded back in the 1920’s as an alternative to the growing militarization of Scouting the aim was to develop a new social order to support world peace, partly by introducing poorer children from urban slums to the joys of exercise, fresh air and the countryside.

Writing as The Headman ("Little Otter") the Woodcraft Folk's founder, Leslie Paul, in the 1926 book Who's For the Folk, said:

'The Woodcraft Folk seek to establish a new social order. They believe that when the worker achieves freedom from wage slavery and the fruits of the soil are garnered by the toilers, then will a new stage of development open out to man. A new epoch, rich in promise of a finer social life and a greater awakening of intellect. We are rebels ... and to this decadent civilization, we bring a new fire and a new energy. We go out of the town and away to the hills and woods with our little light-weight tents packed in our rucksacks ... after the ugliness and monotony of the smoky city we find new life among the green growing things and new health from the sun and the four winds. And this health, together with our understanding, enables us to fight tenaciously for social betterment.''

Not exactly New Labour language.

Well that was the thought back in 2005 when Margaret Hodge, then children's minister told the Folk, that it would not get its annual grant of £52,000 putting the volunteer led organization under considerable strain. The Department of Education and Skills said their claim for funding lacked detail and did not have "sufficiently robust outcome indicators". Which they said meant it did not represent "good value for money''.

So freedom from wage slavery is not a “robust outcome indicator”.

Some Folk felt that the cut was more to do with their strong opposition to the Iraq War. Having always had strong peace movement links they had affiliated to the Stop the War Coalition. A newspaper advertisement calling its members to attend the great anti-war march led to a letter from the Charity Commission about overstepping the mark. Another suggestion for the failure of their application was that Woodcraft was too “middle class”. Something the Folk strenuously rejected.

The cut caused a huge outcry from its friends including a parliamentary revolt with 113 MPs signing a Commons motion deploring the move, tabled by Morning Star columnist and Labour MP Jeremy Corbyn. Nevertheless the cut lead to local Woodcraft Groups around the country having their annual grant suspended and the crisis was compounded when Woodcraft Folk General Secretary Andy Piercy was hospitalised after suffering a suspected stroke during the campaign.

Eventually after a meeting with an embattled Margaret Hodge she offered a member of her own staff to work for the Folk for 12 months on secondment to help support them to look for ways to diversify their funding.

In 2006 the Folk acquired the skills and energy of a new and at twenty seven, youthful, general secretary Kirsty Palmer. She set to work to put the Folk on a sound footing which resulted in a new constitution agreed at the 2007 annual conference. It began, “The Woodcraft Folk is an educational movement for children and young people, designed to develop self confidence and activity in society, with the aim of building a world based on equality, friendship, peace and co-operation.”

The search began too for alternative funding. Their first major success was persuading the government’s Climate Challenge Fund, to support – “C-Change” a project which engages young people who have some knowledge and concern about climate change to raise the awareness of their peers.

Then late last year the Folk hit the jackpot when they where awarded a five-year grant of £1.26 million from the Big Lottery Fund for the TREE (Training, Representation, Equality and Engagement) project. Developed by young Woodcraft Folk members and to be led by them, in partnership with the National Youth Agency, the Co-operative College and the National Deaf Children’s Society it will engage 10-18 year olds in decision-making and the development of services, policy and practice, giving them the skills to campaign and communicate.

Among the aims is welcome plan to increase the number of Woodcraft Folk groups. Debs McMahon, Woodcraft Folk’s Membership Development Manager said “It really is a fantastic opportunity to give young people new experiences and skills, whilst making a real difference to Woodcraft Folk groups and the wider community.”

This is a great boost for the Woodcraft Folk, let’s hope they build on this opportunity, and it brings forward the day the fruits of the soil are garnered by the toilers!

Interested in the Woodcraft Folk See: