Friday, 17 January 2014

2013 Not a Bad Year for the Co-op Movement

At the tail end on 2013 the Co-op Movement had some very good news and no it was not about yet another inquiry into the Co-op bank. Or perhaps that should be the Bank formerly known as the Co-operative as last week it finally passed all of the regulatory and business hurdles required to complete its demutualisation.

The process has been agreed by all necessary classes of creditor and shareholder and approved by the Courts. So effective majority control of the Bank has now passed to investors with the issuing of the new ordinary shares and the termination of the Co-operative Groups existing shares.

Personally I am not rushing to leave the bank I suppose in my heart I hope to win it back for co-operation but in my head I am fully aware of what happened to all the other Building Societies that became small banks on demutualization and what subsequently happened to them. So the omens are not good.

No the good news was astonishingly in the Houses of Parliament. The first reading of the Co-operative and Community Benefit Societies Act due to become law on 1st August. It took a while of patient and careful lobbying of government and civil service but this is the most tangible benefit from the UN International Year of Co-operatives in 2012. One of the objectives of the Year was to get governments around the world to update their legislation when it comes to Co-ops. And on a wave of Big Society rhetoric David Cameron found it hard to resist.

This new Act is however a consolidation act and can therefore only ‘consolidate’ existing legislation and that means that, the 1965, 1967, 1975, 1978 and 2002 Industrial and Provident Societies Acts; the Friendly and Industrial and Provident Societies Act 1968; the Co-operatives and Community Benefit Societies Act 2003; and the Co‑operative and Community Benefit Societies and Credit Unions Act 2010, will be repealed and replaced with the new Act.

Having all this Co-op law in one place will be a great boon when it comes to starting and running co-operative enterprises making life simpler for everyone who works for and with co-ops.

Co-ops UK has however got a long list of new things it would like to include as new Co-op law and has been encouraging the Law Commission to take some of these ideas into account in the process of consolidation. There has been some success including increasing the limits on withdrawable share capital from £20,000 to £100,000, modernising the processes on insolvency – something that will particularly help with fan owned football clubs, improving the investigatory powers of the regulators, and allowing the electronic submission of registration documents.

Co-ops UK will be pushing for more amendments as the legislation progresses but despite all the movements set backs this is the most significant change in the legal basis of co-operation for a generation. 
If you read the mainstream press you would think the whole co-op movement had gone bust but for all the troubles that have hit the Co-operative Bank after all it is not as if all the other Bank’s have be free of trouble. This new law is good news for the over six thousand co-operative businesses across the UK, and in turn for their 15.4 million owners.
Despite what you may have read elsewhere 2013 was a good year for Co-ops with a new one starting everyday! What is more their survival rate is far higher than for business at large. One in three conventional businesses goes out of business within three years of starting. For co-ops, that is only one in twenty.
For five successive years the co-operative sector has outperformed the UK economy, growing by 20% since 2008. Across the nations of the UK, turnover is now £36.7 billion. Worldwide, the co-operative sector has a turnover 54 times the global turnover of Coca-Cola.
Meanwhile in the UK the sector is strong and growing Examples of this commercial success story are:
  • In farming, 65% of all farmers in Scotland, an expanding sector, are now members of an agricultural co-operative.
  • Co-operative schools have doubled their number every sixteen months, with now over 500 co-operative schools in England.
  • There are now one million members of credit unions in Britain. These are financial co-operatives, lauded most recently by the Archbishop of Canterbury, who asks all churches to work with their local credit union.
  • Co-operative Energy is challenging the big six retail energy giants. The percentage of UK consumers who would recommend their energy supplier is 30% overall but an amazing 97% for Co-operative Energy.
So in a nutshell the problems with the Co-op Bank are just that a problem with the bank all that is wrong with the rest of the sector is that it is still too small. There is also a very important thing you learn when things go wrong - the corporate media are no friends of co-ops. But why should they be, the sector maybe small but the co-op model is a clear threat!

Aviding Amazon at Christmas (Or anytime)!

I am sure you have seen and read of the huge boom in internet shopping this Christmas. Clearly a trend that will continue as that tax dodging, union busting megalith Amazon has destroyed large numbers of the independent book and music shops that would have fulfilled many Christmas present orders.

As a lefty when Amazon first appeared it seemed like a great thing. I could get some of the more obscure left field books and music that I had been looking for a lot more easily, cheaper and swifter than ordering through my local book or record store. However it is now clear that Amazon is in the vanguard of the neo-liberal onslaught.
Without tax there is nothing to fund our schools, hospitals and public services, but Amazon is the colossus of tax avoiders. Amazon's UK subsidiary (which also includes brands, Kindle, paid £3.2m in corporate taxes in 2012 on sales of £4.3bn - a rate of less than 0.1%. How can a high street store paying council tax, rent and all the costs that go with having such a presence compete?
And it is not just tax the working conditions for Amazon staff are diabolical. Now the magazine that has been leading the campaign against Amazon is twenty years old this year. Ethical Consumer has been advising us how to spend our money as wisely as possible so that our consumption matches our values. I think at a time when we are under such concentrated attack we should think very carefully about who gets every hard earned penny we have to spend.  

Margaret Hodge, who frankly seems reborn as Chair of the public accounts committee has been a leading figure in the campaign for shoppers to boycott Amazon. Now she has been joined by MPs Natascha Engel, Meg Hillier, Margaret Hodge, John McDonnell, Michael Meacher, Austin Mitchell, Grahame Morris and Dennis Skinner.

The important thing about the Ethical Consumer campaign however is that do not just say stop buying from Amazon they also answer the ‘so where do we shop instead’ question? Which is just where Ethical Consumer magazine comes in like ‘Which’ with ethics factored in it helps you decide who to give your custom to for a huge range of products and services that we all buy.

It is an independent, not-for-profit, multi-stakeholder co-operative with open membership, founded in 1989 and based in Manchester. Their income comes entirely from, reader subscriptions (50%), consultancy work for campaign groups and ethical organisations (30%), and adverts from ethically vetted companies, grants and other income (20%).
Nowadays it seems everyone has their own set of ethics and beliefs, so they've developed the world's most sophisticated yet simple personal ethical rating system to give you the information you need, based on detailed research of over 40,000 companies, brands and products. What is more you can personalise their  ethical product guides to reflect the issues that you find most important - be that animal testing, climate change, sweatshop labour, GM crops, nuclear power or whatever.
Subscribers can also access detailed product & company information, plus hundreds of downloads. As a subscriber you get the UK's leading alternative consumer magazine, published 6 times a year which can be available as a paper copy delivered to your door, or as a flip-book or as a digital download. 
Consumer product labels now appear on an increasing number of ethical products and services; the Ethical Consumer Best Buy Label helps shoppers choose genuinely ethical products and services. It's a unique label that looks in detail at the ethical record of the company behind the product and the environmental and ethical record of the product itself.
I must admit my own ratings do not always coincide exactly with theirs but I always find out something interesting and it helps me to avoid making the enemy any stronger!!
Ethical Consumer is the brand name of the Ethical Consumer Research Association so that all their work is backed up by some excellent research into companies and their products. This is supported by the fact that they are a co-op. In October 2008 ECRA converted into a multi-stakeholder co-operative with worker members, and investor members.
Both classes of member are involved in decision-making and the election of Directors onto the Board.  The conversion was designed to give ECRA better access to external capital and skills – whilst retaining the not-for-profit and co-operative principles at its core. Because of the principle of open membership, any consumer able to make the minimum investment (currently £200) and who supports the objects of ECRA, can now become a member of the co-operative.

So maybe before you buy anything else your first Christmas gift to yourself should be a sub for ethical consumer so go to: . You may also like to include the essential Christmas present for all your anti-capitalist and radical co-operator friends the new book from Ethical Consumer and New Internationalist - 'People over Capital'. Edited by Ethical Consumer editor Rob Harrison and well reviewed in these pages.

Only after you have of course been to for all your stocking fillers!


We' are all in it together!

I have a confession to make I was a guest speaker at the Co-op Party Summer school held at the NASUWT conference centre at Rednal near Birmingham and I received £18 travel expenses. Not quite the 50K that went to Ed Balls Office and probably money better spent but I defend the right of the Co-op to spend its money how it sees fit. It is not as if private companies do not contribute money to political parties but they do out of sight with no democratic accountability.

The Co-op Union had a Parliamentary Committee as far back as 1881; the Co-op Party was formed in 1917 and has had an electoral arrangement with the Labour Party, the famous Cheltenham Agreement, since 1927.

It seems to have taken sixty six years for this totally open activity to be finally “uncovered” by the right-wing press. The Co-op Party is difficult to explain and many co-operators have been calling for reform. With the rise of New Labour some felt it was too much about selling Labour to the Co-op and not enough about building an effective Co-op voice in Parliament.

Current events have remade the case for an effective Co-op political voice. It is worth remembering, as we approach the centenary of the First World War, why the Co-op Party was formed in the first place.

When the First World War began the Co-operative movement did what is saw as its duty with the CWS selling its stocks of flour to the army at pre-war prices, as well as selling Danish butter lower than the market price and granulated sugar and tea as well as canned goods at less than government prices.

Individual Societies in fairness to their members introduced fair distribution schemes before the Government introduced rationing.

When rationing was finally introduced it was run in the interests of private traders with Co-op Societies not getting a fair allocation of controlled goods. The CWS had built a powerful production and distribution chain was far superior to any in private hands yet was reduced to delivering the same poor quality products and inefficient distribution of its competitors.

This bias can be seen by Lloyd George’s (he became Prime Minister in 1916) decision to appoint Lord Davenport (formerly Sir Hudson Kearley a man who had made his fortune in the grocery wholesaling business of Kearley and Tonge) as the Government Food Controller.  

When conscription was introduced the movement found it self in the hands of its enemies with Military Service Tribunals often dominated by private traders. One Society had 102 out of 104 men conscripted. Across the country Tribunals conscripted the Co-op Branch manager to give a better living for the private grocer.

The final straw was the Excess Profits Duty a tax on Co-op Society surpluses however these where not the profits of a private company but the mutual savings of the members. As far as the movement was concerned this was a fundamental attack on the whole idea co-operation. This tax would destroy the dividends of the members. In 1916/17 the CWS alone paid over £1million in excess profits duty.

Within the movement the argument raged about ‘political neutrality’ one of the Rochdale principles but as Arnold Bonner put it in his History of British Co-operation, “political neutrality in these circumstances might bring the same fate as the pacifism of sheep amongst wolves.”

At the 1917 Co-operative Congress in Swansea a resolution was passed which declared, “In view of the persistent attacks and misrepresentations made by the opponents of the Co-operative movement in Parliament and on local administrative bodies, this Congress is of the opinion that the time has arrived when co-operators should seek direct representation in Parliament.”

Today the Co-operative Party has a structure a bit like its sister the Labour Party. It has individual members in branches and it has affiliated societies. The biggest of which is the Co-operative Group.

The irony of the present Tory attack on the Co-op Labour link is that prior to this it was Ed Milibands proposals for the Trade Unions affiliated to labour that raised the biggest threat to the relationship between the Co-op Party and it’s affiliated Co-operative Societies.

The Affiliated Co-operative societies as institutions keep the party grounded in the real world of co-operative business. And just as Professor Keith Ewing has so eloquently argued about the role of trade unions in the Labour Party individualisation would break the institutional link between The Party and the Societies.  The present situation when that link is being attacked by the Tories and their mates in the media is hard to defend when Labour appears to have attacked it first.

It may not be as he meant it but what must be clear to everyone in the Co-operative Movement, the Trade Unions and the Labour Party is that ultimately David Cameron is right, “we are all in this together”.  And as working class institutions we have the right to determine our politics for ourselves.  

A century of experience tells us that you simply cannot trust the Tories or the Liberals to act fairly.  Just like in 1917 when “in view of the persistent attacks and misrepresentations made by the opponents of the Co-operative Movement”, we need political action to be able to defend ourselves.