When we moved to Rochdale in 1999, we could hardly fail to take pride that the town was not only the birthplace of Gracie Fields, but of the Co-operative Movement. Moving our banking to the Co-op seemed the right thing to do, and national events a few years ago reaffirmed our commitment to being part of a movement that did things differently.
It is only in the last few years – well before the latest scandal – that I have become disillusioned with the business that purports to have inherited the values and practices of the 19th century movement. As the owner of the shopping centre in Rochdale until very recently, it appeared to behave little differently from other property landlords. Its banking arm is now no longer a mutual, the co-operative principles having gone out of the window without any sort of democratic engagement with its members like myself. My bank is now a brand like NatWest or Halifax, with a similar shareholder ownership.
I would look on this with some sadness and resignation were it not that I believe in the principles of co-operation in all sorts of business activities, and am angry that the current leadership of the Co-op have so manifestly failed to live up to the expectations of their predecessors.
As a good Lib Dem, my first instinct is to get stuck in and press for reform. However, that isn’t possible here. I am sure I am not the only person shocked to find out that the former Chairman of the Co-op was a Labour Councillor. I knew of course that the Co-op was integrated into the Labour Party, and that only Labour candidates can stand under the Co-operative name. But, after the event, I can’t say I am at all surprised to find that the Labour Party’s influence has extended right to the top of the Co-operative business. I wonder if Paul Flowers would have got his job at the bank without his Labour Party membership.
The Co-operative Movement is a movement. Movements will have more or less support within political parties, but a movement transcends parties. The Co-op’s exclusive links to Labour are all the more shocking as in 1844 when the movement came together with the pioneers, the Labour Party did not exist. The Liberal Party did, and one of its great 19th century thinkers John Stuart Mill, was a great proponent for co-operation.
Yet Liberal Democrats are excluded from playing a full part in the movement. Given the history of the Co-operative Movement, it is not unreasonable to say that the Labour Party has hijacked the movement for its exclusive political interest.
The new head of the Co-operative Ursula Lidbetter has said that she wishes to carry out a review of her organisation. Nothing less than a complete abolition of the exclusive links with the Labour Party is needed, to be replaced by a governance that is inclusive of all political opinions.
* William Hobhouse lives in Bath and is co-founder of the Lib Dem Campaign for Manufacturing.
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48 Comments
The foundation of the Cooperative Party was a strategic mistake which should have been rectified decades ago.
I remember Viv Bingham talking about the cooperative movement’s history at the start of Blair’s reign, in which he explained that the coops had high hopes for Labour to pass an act which would make it easier to run mutuals in the UK without having to worry about people pushing for demutualisation to make a quick buck, etc. As far as I’m aware, nothing ever came of it, yet the Cooperative Party didn’t even make a peep about it. Much as I’m not a fan of the current government, the fact is that mutuals only returned to the political agenda once the coalition took over.
The only thing the Cooperative Party has ever achieved is to make it less desirable for political parties to meaningfully engage with the issue. The same, of course, could be said for the trade union’s dysfunctional relationship with the Labour Party, in which everyone seems to be a loser.
“Nothing less than a complete abolition of the exclusive links with the Labour Party is needed, to be replaced by a governance that is inclusive of all political opinions.”
How is this possible? Collectivism is anathema to right wing politics and essential to both the co-operative movement and the Labour party!
There is a reason the Co-Op is associated with Labour, and that’s because, like trade unions, it is part of the labour movement and there is only one national left wing party that represents the labour movement, Labour.
Now, there was a time you could make the case that Liberal Democrats, via the SDP, also represented factions of the labour movement, but you’d struggle to prove that these days.
As I understand it, from delving into the mire of websites, The Cooperative Party is a separate political party(presumably complying with PPERA etc) but which chooses to work with the Labour Party in some pre-election coalition/pact. Cooperative candidates have to sign-up on selection to agree to accept the Labour whip. The coop movement funds the coop party, and the movement also gives significant sums to Labour branches.
It is high time this was made public.
This is an issue wider than just the coop, as the other supermarkets are big political donors too. The whole business of party funding needs throwing open.
According to Co-operatives UK there are other 6,000 co-operative enterprises in the UK. Of those less than *10* give money to the Co-operative Party (and to that extent to the Labour Party). Moreover Co-operatives UK sees itself as the cross party campaign for co-operation. For both these reasons the notion that the co-operative movement in 2013 is allied with the Labour Party is false.
The Co-operative Group itself (the largest co-operative in the UK) is the principal funder of the Co-operative Party and most of the remaining retail societies (e.g. the Midlands Co-operative) make donations. However the trend in recent years has been for societies to disaffiliate from the Co-operative Party (e.g. the Southern Co-operative has ceased to make donations).
It is also noteworthy that the new Chair of the Co-operative Group, Ursula Ledbetter, is the Chief Executive of the Lincolnshire Co-operative which has a longstanding tradition of political neutrality. If members of the Co-operative Group were balloted on whether political donations to the Co-operative Party should continue then they might well cease.
I do not wish to see elections to the Area Committees of the Co-operative Group (and I am an Area Committee member) becoming party political contests but if there are fellow Liberal Democrats with relevant professional skills and experience to bring to the running of a co-operative business then I would encourage them to get involved in the society (and other co-operatives and mutuals) and stand for election.
James Graham 21st Nov ’13 – 10:41am
Like James Graham I have been thinking about Viv Bingham in the light of the recent scandal at the Coop. Viv spent a lifetime in the Cooperative Movement as a Liberal activist . James hits some nails on the head with his comments. In comparison the original piece by William Hobhouse seems a bit weak, especially when he claims to have been surprised to learn that there was an exclusive relationship between the Coop and the Labour Party when it came to fielding parliamentary candidates? My memory may not be what it was but doesn’t that arrangement go back at least 90 years?
That is not to say that the Cooperative movement was solely a tool of the Labour Party. For many years I took part in STV votes in internal RACS elections and the results were anything but a victory for Labour. The political activities of the Coop at that time (1970s and 1980s) were much wider than just putting up parliamentary candidates. Campaigning on all sorts of issues was funded by the Coop political fund – Anti-Apartheid and CND in my locality for example. There have also been a number of green and international development issues where the Coop has been a helpful funder.
William Hobhouse says that the Coop appeared to behave little differently from other property landlords. Well in comparison with the Duchy of Lancaster or the Duchy of Cornwall it is a beacon of good practice. So I look forward to William Hobhouse writing a companion piece to this explaining how shocked he is about the bad practices of the Prince of Wales property business and how in recent years he has become disillusioned with the Windsors.
Jumping on the bandwagon of cheap knocking copy against the Coop as a way of attacking Labour is beneath us.
This is a really positive post. I fully support the LibDems getting more involved with the Co-op movement.
Having been “disillusioned with the business that purports to have inherited the values and practices of the 19th century movement,” perhaps Mr Hobhouse could explain why Mr Hobhouse has not wriitten about this issue bfore on LDV? What evidence has he that in the management of the Rochdale shopping centre “it (the Co op) appeared to behave little differently from other property landlords?” Did Mr Hobhouse raise these concerns with anyone? I have a feeling that he and his chums in the Liberal Reform faction would be a lot happier and more honest, if they followed Mr Boles suggestion and joined athe mooted National Liberal party, aligned with the Tories.
Getting involved in the Co-op movement, and pointing out that the close links between the Co-op and the Labour party actually damage the Co-op nowadays, are not logically exclusive.
Tony
I would like to see a rejuvinated ALDTU take on co-operatives as part of its remit for worker rights and engagement, and to focus attention within the Liberal Democrats in keeping with our Constitution’s preamble: “We want to see democracy, participation and the co-operative principle in industry and commerce”
I like to post this piece on occasion. It’s good enough to post in full:
Arthur Seldon on Liberal, Labour and Co-operative
From “Liberal Magazine” Nov 1949
“A Liberal looks at the Co-operative Movement, declares Alliance with Labour is dangerous”
The co-operative movement is a liberal institution. It was born in a liberal economy. It grew in an era of political and economic liberalism. It will survive and prosper only in a liberal State.
Its alliance with the Labour Party is a profound and tragic blunder. Its principles, its purpose and prospects as a trading organisation, and its political policies make its most natural and congenial political home the Liberal Party.
First, its principles are liberal. The co-operative movement is a voluntary association of individuals who join and leave at will. It is based on the voluntary principle, without which is loses its soul. It lives by serving the consumer in a free economy independent of the State. It could not breathe in a regime of compulsion, direction and State control.
Secondly, its business structure and development makes its Labour alliance incongruous, out-moded, and dangerous. Changing distribution of income and social groupings are leading it to expand and extend its services and activities. The bulk of its members are drawn from skilled workers whose incomes and requirements are approaching those of the old middle classes. The new members of recent years have come mainly from the middle classes, and the expansion has been mainly in the South. It is a far cry from the groceries, the coal, and other staple commodities of the Northern working classes to the fashion goods, the television and the department stores of the 1950’s.
The co-operative veteran must rub his eyes when he reads the current advertising campaign of the C.W.S with its “co-op. customers” – the dentist, the teacher, the colonel and other middle class figures. How is the movement to continue to expand along these lines – the only lines along which it can expand – if it is tied to a political party which potential members, for reasons good or bad, fear or distrust?
Thirdly, a free consumers’ co-operative movement has no business to be allied to a party largely financed by a producer interest, the trade unions, and inspired by Socialist ideology based on belief in the efficacy of State control. The National Council of Labour is not a triumvirate of like-minded equals; it is an unconvincing facade for irreconcilable opposites.
The co-operative movement’s differences with the trade union element in the Labour movement are typified by its attitude to the licensing of shops. Can any co-oiperative official or member endorse U.S.D.A.W.’s demand for this reactionary and illiberal device for the control of retail outlets?
And the inevitable conflict with the philosophy and practice of Socialist planning has been laid bare in the compromises and the concessions which preceded the final draft of “Labour Believes in Britain”. No doubt face saving formulae will be found by the Labour Party negotiators in the effort to keep the goodwill of the movement at least until the coming general election is over. But is the movement faithfully served by buying a few more years of immunity? The clash must come sooner or later.
The co-operative official or member who convinces himself that the nationalisation of wholesaling and other co-operative activities can be put in cold storage for ever, or who gives credence to seductive talk of the movement being “allowed” to run a part of a Socialist economy, is indulging in wishful thinking that does no credit to his judgment and no service to the movement.
He has forgotten that there is a co-operative movement in Russia that is “allowed” to run a sector of the economy – now expanding, now contracting at the will of a commissar. But is this poor thing, this convenient instrument of a total State, unfree, dependent, a mockery and a travesty of the hopes of the Rochdale Pioneers, held up as a desirable fate for the British co-operative movement?
But if the Co-operative-Labour alliance is a mistake, on what does it rest? There is the sentiment of he working-class origin of both organisations, a sentiment which neglects the long distance both have travelled since their early days. Then there is that universal Aunt Sally, “the capitalist system”, which means all things to all men, a convenient thought-stifler when awkward questions arise. And a few words about “production without profit”, or about that wildly impossible “Socialist and Co-operative Commonwealth” could always be relied on to raise a cheer or quell the doubts of those who think for themselves.
What are the facts of history? From the very first the alliance with Labour was never an easy one. Only ten years after it was born, doubts and fears were expressed by co-operative spokesmen about Labour policies, such as Dr. Addison’s producer-controlled agricultural marketing boards.
More than once in the 1930’s Lord Rusholme (then Mr R. A. Palmer) and others spoke out against the monopoly legislation of the Labour Government of 1929-31, later adopted and enlarged by the “National” Governments of Macdonald, Baldwin, and Chamberlain, and supported in principle by Labour in Opposition. These co-operative spokesmen were supported not by the Labour Part, which was too concerned with trade union interests, but by the handful of Liberals who understood the economic and political dangers of monopoly in all its forms.
It has taken four years of Labour in power to make the dangers too plain to be ignored. It is not merely a question of the nationalisation of a few co-operative activities in wholesaling and insurance. These are only the first steps. The ugly truth is that, however “liberal” some of its paper intentions, Labour’s philosophy is the antithesis of that on which the co-operative movement and other Liberal institutions rest. For underlying it is the impudent assumption that no voluntary association of free individuals can be superior to the State.
The co-operative movement wants the freedom to develop in those fields in which, by trial and error and in rivalry with other forms of distribution, it proves itself in the interests of the community. It seeks no artificial respiration, but it rejects doctrinaire exclusion. This is precisely what a Liberal economy implies, and what the Liberal Party stands for.
In a Liberal economy there is room for all forms of enterprise – companies and one man businesses working for “profit”, profit-sharing enterprises of all kind, and “mutual aid” organisations such as the co-operative movement. The only activity for which there is no room is monopoly.
The Liberal Party does not stand for one kind of economic organisation against the others. It stands for the progressive elements in all forms of economic life against the backward-looking elements. It calls for room for all forms of activity provided hey benefit the community. And in its policies of freedom for enterprise and the prevention or destruction of monopoly, it truly serves the consumer. Here surely is the voice of sanity. It is the voice of the progressive in all forms of human activity, co-operative and all other; it is the voice of the Liberal.
The hour is not too late for co-operators to see the truth and to warn their colleagues and their fellows. Many have paid uneasy lip-service to Socialist ideals in which they had no faith. Many have quelled doubts by representing themselves as “liberal-minded Socialists”. Misplaced loyalty to the established political strategy is treachery to the principles of the co-operative movement. To speak out now may be to incur the displeasure of the articulate minority who have vested interests in the Socialist alliance. But to remain silent is to earn the reproach of the multitude whose hopes will be crushed by the prostitution of the movement in a Socialist State.
Thanks Alisdair for reposting that article. It was dug up a few years ago by Michael Meadowcroft when he returned to the party and featured on the Liberal Vision site.
my great great uncle was a director of the co-op in 1900
As someone who would like to see Cooperatives thrive I conclude sadly that the existing large ‘C’ Cooperative structures simply do not work. The local Coop supermarket in our town has just announced its closure to be replaced by a Waitrose (John Lewis Group) co-owned supermarket. Despite having no shareholders to pay out the Coop’s prices were unaffordably high with queuing even with few buyers being incredibly slow. They simply cannot compete in a free market. Why? They clearly are not there for their customers who are offered a rotten deal so without share holders who can effectively demand higher standards , who are they there for? I conclude that they are there for their employees and have no external discipline to do better. The future for cooperatives is surely to become like Waitrose, co-owned bodies. Co-ownership has been a Liberal tenet for at least 50 years . It’s time has come but I fear that the Labour’s depressing lack of interest in institutional change will ensure further decay for the movement before they will wise up.
If anyone wants to understand the scale and extent of the co-operative economy in the UK you may want to read ‘The Co-operative Economy 2013’ produced by Co-operatives UK and to be found at http://www.uk.coop/co-operative-economy-2013.
Incidentally Co-operatives UK are headquartered at Holyoake House in Manchester. The building being named after the great Victorian Co-operator, Radical and member of the National Liberal Club, George Holyoake.
Chris Pilkington 21st Nov ’13 – 10:34pm reminds us of George Holyoake.
Holyoake was not just an influence on the cooperative movement.
In stark contrast to the Rev Paul Flowers (dubbed “the Crystal Methodist”) George Holyoake was a secularist. He coined the term “secularism” in 1851.
He was for a brief time a lecturer at the Birmingham Mechanics’ Institute, later becoming an Owenite lecturer.
Holyoake joined Charles Southwell in dissenting from the official policy of Owenism that lecturers should take a religious oath.
Holyoake was an acquaintance of Harriet Martineau, the English translator of works by Comte and the first female sociologist. He was a contemporary of Mill, Darwin, Gladstone and Bradlaugh – although I doubt that they all stood in line together at the local Coop to do the weekly shop.
He lived in an age of rather more substantial figures than the pale and shallow Brown/Blair and Cameron/Clegg.
I doubt that Holyoake would have had much time for spin-doctors (neither Australian nor South African).
But the current attacks on the Coop are cheap, shallow political spin. Mr Crosby has issued the instructions that this is a stick with which to beat Miliband and Balls. When Mr Crosby says jump it seems it is not always just the Tories who ask “How high?”.
As David Boyle says in THE REAL BLOG –
What is fascinating about the revelations about the Rev. Mr. Paul Flowers, is not how unusual it is but how much it brings the failures at the Co-op into line with the other big banks.
The big banks also had key appointments without enough banking experience (HBOS). They also succumbed to disastrous mergers with rapidly disintegrating loan books (RBS).
It just goes to show, as the Guardian said, that the Co-op is not in trouble because it is a mutual, but because it is a bank.
We are told that the Prime Minister has ordered an inquiry into how Mr Flowers was considered to be a suitable chairman for the Co-op Bank
But Mr Flowers was also considered to be a suitable minister in the Methodist Church.
So why has the Prime Minister not ordered an inquiry into the Methodist Church?
The Methodist Church has said it is providing “pastoral care” for the Rev Flowers, who is suspended pending an investigation. Assistant general secretary Rev Gareth Powell said: “Inevitably, it’s regrettable when the allegations made against one minister then tarnishes the extremely good and honourable work undertaken by all of our ministers,” he told the BBC. “Certainly the actions that are now under public scrutiny inevitably raise a question about the role of the church.”
As a former member of a Co-operative Area Committee, Regional Board and Main Board of Co-operatives uk, I never made secret my LibDem membership. There are too many members of these committees and boards who are there by courtesy of local Labour Party support and I have for a long time tried to encourage LibDem members to stand for election. It will only be from within that the culture will change.
Some years ago there was an Association of LibDem Co-operators – what happened to that ?
Thank you Alisdair for re-posting that article, a pity it can’t be printed in an all-member edition of LibDem News. My guess is that the majority of the population are(were) blissfully unaware of the Coop-Labour links, I look forward to developments…
Association of LD Coop members should be revived.. a fringe at Autumn Conference maybe.?
Many thanks for the comments and citings (James Graham, Peter Tyzack, Alisdair McGregor, Chris Pilkington) that bring a wider historical insight into this debate. I find it interesting that no-one has tried to defend the Co-op’s exclusive links to Labour. My response to those that want continued or renewed Lib Dem involvement with the Co-operative Movement is that this can only be achieved by first severing the Co-op’s political exclusivity. What’s the point in being a second class citizen in an organisation?
William Hobhouse 22nd Nov ’13 – 9:57am
What’s the point in being a second class citizen in an organisation?
A question for the Deputy Prime Minister I guess ?
@ peter tyzack
“The co-operative movement’s differences with the trade union element in the Labour movement are typified by its attitude to the licensing of shops. Can any co-oiperative official or member endorse U.S.D.A.W.’s demand for this reactionary and illiberal device for the control of retail outlets?”. But perhaps as we look at the sorry state of our High Streets, we might regret that (unlike France) planning conbtrol did n’t hold Supermarkets, Banks, Betting Shops etc at bay and preserve commercial variety, localism and competition?
I would have thought the saddest5 failure is the absence of producer co-operatives (like Mondragon, Spain) and the national failure to press for State Owned P:ublic Banks which elsewhere thrived when the Big Few collapsed under the weight of their own internal decay?
When I was asked to vote in a Co-operative election recently only one of the candidates seemed to have any interest in making the business efficient and competitive. He was not elected while the woolly minded anti business types who spouted vague ideals without any apparent practical knowledge were elected.
They used to have 50% of the retail trade but now it is down to 5%. They incurred a huge debt by buying Somerfield and other smaller chains but of the 7 Somerfield shops that I know 2 have been sold to Waitrose, one to Poundmart, one to Costa express, one to Aldi and one was closed after a fire and is not reopening because a new Asda store had taken some of their trade away and there is already a Waitrose so no doubt they are hoping for a bid from Tesco or Sainsbury. I am sure Asda would have bought it had they know it was going to close as it has a very good position in the centre of the town. Only one of the Somerfields is left and that is not very busy and a new store was opened in a former independent supermarket which continues to exist because it is the only supermarket in the town centre as Morrisons and Lidl are sited out of town. In a large provincial town the new Co-op was sold to Asda not long after it was opened. At this rate they will not have any shops left unless something is done – reducing their prices would help.
This is an organisation that is doomed unless they can get rid of the types who run it and bring in managers and directors who have sound business experience and knowledge. An they willhave to stop spending their over charged customers money on political campaigns
Michael (Main) & Peter (I think): ALDCO was started by a bunch of us in Oxford and fairly quickly fell inactive! It was picked up a couple of years ago by Alex McFie, Chris Pilkington and a couple of others, but someone contacted me a couple of weeks before conference this year asking about it as their website appeared not to have been updated for 18 months or so – I can’t find their email now though…will keep looking. There was some interest when I added a group on ACT for it, but that seems to have died pretty much a death too.
Michael (Parsons): Were you aware that in the last month or so the largest manufacturing component business of Mondragon, the white goods unit, has filed for bankruptcy 🙁 Most of the Mondragon members will be reassigned jobs in other Mondragon family businesses, but, like almost everything manufactured, the greatest actual number of employees (not members) were in their overseas (such as China) manufacturing operations and will not be protected. Sadly.
One of the things that I believe has partly hamstrung the mainstream co-op businesses, and which has been an area of research and activity for over a decade now as to how to resolve it, is that they tend to have members from one set of interests. They tend to be *either* consumer, *or* worker co-ops for example. The various parts and affiliates of the Co-op Group recognised this and tried very hard to recruit staff as members and not just as employees and much work went on to try and identify a membership model that would appeal to what are on occasion fundamentally opposed interests. I believe, in the form of the Limited Liability Partnership we now have such a potential corporate form that could be tailored to this multi-stakeholder idea.
Well, nvelope, in our town, Coop are bidding to have planning permission granted for the conversion of a car showroom to a fourth shop. The largest one is one of the former Somerfield converts. Our chain count in town is Coop 3, Tesco 3, Iceland 1, Lidl 1, all the rest nil (we do have Spars, Londis, Premier, Nisa etc in convenience shops)
Dan Hodges in the Telegraph =
“… …. there are more important things at stake here than embarrassing the Leader of the Opposition.
Yesterday David Cameron announced an independent inquiry into the Co-op, or more specifically, how Paul Flowers came to be deemed a suitable chairman of the bank.
But precisely why are we having this inquiry? Paul Flowers stepped down as Chairman of the Co-op bank in June. His unsuitability for the role was exposed weeks ago, when he appeared before the Treasury select committee and said he thought his bank’s assets were valued at £3 billion, when they were in fact valued at £47 billion. The FSA had been aware of the developing financial crisis at the Co-op for years.
Yet nothing was done until this Sunday, when the former Co-op chairman was filmed by The Mail on Sunday allegedly buying £300 worth of crystal meth. Subsequent allegations emerged about adult pornography and rent boys. At which point the Government announced a formal investigation.
Let’s set aside the fact that if ministers are going to start demanding investigations into bankers with a predilection for drugs, porn or prostitutes, the City of London will grind to a halt within 24 hours. It’s quite clear the Government’s formal inquiry into Paul Flowers is not being driven by a new found desire for regulatory transparency. It’s being driven by politics.
… … what we are now facing is the spectacle of the state launching an investigation into a private individual basically because he is a supporter of, and has close links to, the ruling party’s political opponents. ”
I do not always agree with Dan Hodges of The Daily Telegraph but just think ver that last point again.
.. … what we are now facing is the spectacle of the state launching an investigation into a private individual basically because he is a supporter of, and has close links to, the ruling party’s political opponents.
Is anyone in the Liberal Democrat corner of the coalition happy with this abuse of state power?
What next? A Prime Ministerial inquiry in the suitability of Stephen Tall to be an editor of Liberal Democrat Voice ?
This is the most open and erudite set of comments I have seen all this week – the worst week for the co-operative sector for a long time and a real bone-shaker for those of us involved. I work at Co-operatives UK, which is the national association for coops and mutuals – operating on a non-party basis and always happy to recognise the traditions and outstanding current work of Ministers such as Ed Davey, Don Foster, Jo Swinson, Norman Lamb and others in removing obstacles to community and employee action and ownership. There are great coops across the economy and with support from across members of all political parties and none. Back to Rochdale, you could say, given that political and religious neutrality was one of the pioneers’ principles.
I am also a member of the ‘Co-op’ and very dismayed by recent events. Prehaps we should all take a more active role and attend meetings etc, to try to ensure the values we want to see happen
no insight to add, but, surely, a most interesting discussion
@Jock Coats – I think you’ll find that the person contacting you just before conference was me…
Tim 13
I am glad to hear that the Co-op is doing well somewhere. My observations were in several different towns that I visit. Prices seem to have come down a bit recently but the main reason why people did not use the co-op was because the profit making supermarkets were cheaper, sometimes much cheaper. A small loaf of sliced bread was 85p but the same loaf was 65p in Tesco and Waitrose which is not much help if they are a long way away and you are old. Not many seemed to use it for their main shopping, just going in for the odd thing like newspapers, milk or bread if they ran out. When people see that large amounts of money were being given to the Labour Party they might not be too pleased.
This whole scandal has raised a lot of questions about the suitability of some of our politicians, Labour, Conservative and Liberal Democrat, to run the country as they seem to live on another planet and have no idea how the economy works.
The lavish meals and perks which the leaders of the Co-op and the Labour Party seem to enjoy must have come as a surprise to some of their more idealistic memebers as it did to me. These people need to move aside and let others take their place.
I think that this is a very positive discussion prompted by William Hobhouse. I hope that William will take away from it the fact that the co-operative movement itself is not itself aligned with the Labour Party. Rather it is the Co-operative Group and the Co-operative Party which have that link. The vast majority of UK Co-ops do not make donations to any political party and no one has ever accused co-ops such as the Wine Society, the United Oilseed Producers Ltd and the Owner-Drivers Radio Taxi Service Ltd of being a socialist vanguard. I would be happy for William or others to contact me to discuss the co-operative movement in more detail.
If people do consider themselves co-operators and want to do something I would encourage you to join the Co-operative Group and other co-operatives and mutuals, attend member meetings, vote and perhaps stand for election. Many co-operatives (e.g. your local credit union) would also welcome those who want to do voluntary work for them either by joining the Board of Directors or in some other capacity.
If you want to use your spending power to benefit both the Liberal Democrats and the co-operative economy then you can take out a Lib Dem affinity credit card with the Co-operative Bank or join the Phone Co-op and ask for a % of your spend to go to the party. Incidentally the Phone Co-op pay 2.25% interest on share deposits which is better than most current accounts.
http://www.libdems.org.uk/help_us_for_free.aspx
http://www.thephone.coop/libdems
Thos of you with a interest in the history of the co-operative movement may wish to acquire a copy of the recently published ‘Building Co-operation – A Business History of the Co-operative Group 1863 – 2013’. It’s available from Oxford University Press.
Those of you who want to know what is happening in the co-operative movement may wish to take out a subscription to Co-operative News.
http://www.thenews.coop
On the political front Liberal Democrats should remember that in 2012 the party did agreed a policy paper on ‘Mutuals, Employee Ownership and Industrial Democracy and we should strive to make sure that Government policy reflects that document. For example in the Co-operatives Act the Government has committed to deliver in 2014.
I fully accept the point from Chris Pilkington that it is the Co-operative Group and Co-operative Party that is affiliated to Labour, and not the Co-operative Movement as a whole.
So the argument goes that the governance and ideals of the Co-operative Group and the Co-operative Party should come in line with the Co-operative Movement.
I have argued that without this change in governance – specifically the political affiliation – the Co-operative Movement as a whole is never going to be the positive force for social change that it should be. And, furthermore, given the chance for change following the Flowers revelations of the close links between Labour and the Co-operative Group, this is our chance as Lib Dems to change an organisation and a movement for the better, and pave the way for renewed Lib Dem involvement in a great cause.
It is thoroughly depressing for those who want to see a variety of business models in our economy and feel that healthy mutuals and cooperatives are key to that ‘rebalancing’ (there’s a phrase that’s been quietly dropped from political debate) that the CoOp bank has effectively been carpetbagged by stealth.
I guess I was just lucky that recently I put my money in a credit union, having considered the CoOp (it was about exactly where the branch was, ultimately).
Promotion of mutualisation and cooperatives was something that was heavily flirted with by Dave C during his Sunshine and Happiness phase, and I have to say I dared to dream that there was potential overlap between the LibDem and Tory agendas on this point back in 2010. Needless to say, I was naieve at best.
It would be good to see some substantive policy from the LibDems incorporating some promotion of the mutual sector in the next manifesto. I feel it’s a real area of potential for the party to be distinctively different from the others , yet in tune with something that an inherent part of British economic life. But given no-one else in British politics has done anything substantive to promote movement in this direction since at least the 70s, I guess I’m being naieve again.
@Matt(Bristol)
But the founder and leading lght of one of the most successful credit unions was found to have defrauded it of large sums not so long ago! And the co-operative retail movement has lost market share as it p[erhaps became less, not more, open to stake-holder participation and more subject to organised political take-over.
Perhaps the problem is that people here don’t trust each other. An offer to turn a firm into a co-operative, taking part of earnings over time as captal, may be shunned as an attempt to swindle or make the worker liable for debts, so they refuse to buy themselves a job (95% of applicants for Tonibell ice-cream vans turned down the offer when the firm started its revolutionary break-through); similarly there seems very little direct worker or customer participation in Coop Retail Services Ltd. Perhaps greater publicity about the .limited liability, and also initiation of some State protection for the small co-operative share-holder investors would help, especially if some of the Board members were selected by lot on the basis of human equality (to open up the cosy circles of crystal meth eaters) . Above all we need a reformof the dreadful laws that give PLC’s a prime duty to further the interests of their rentier fund-holders and instead limit votes democratically to one per shareholder, not per share; and also include a range of duties such as living wages, community and employee participation, honesty, and social obligation. Small is beautiful? All production is by its nature co-operative, and we are all consumers and workers as well as perhaps owners: reforms need to recognise that and give inbuilt preference to active mutuality rather than continue its destruction by the dominance of passive rentiers.
Alisdair – I still can’t for the life of me find the conversation! Not in my email, my Facebook, nothing. Strange! But good to know 🙂
I wonder if there’s something about diminishing returns to scale (of democracy especially). I was never that convinced by the suggestion at the heart of “Big Society” to have a 15 million member plus overarching co-op that everyone who was a member of any local co-operative “Big Society” project would become a member of. Sort of like some kind of shadow government (one government is too many!).
I used to attend general meetings of Oxford, Swindon and Gloucester Co-op, but pretty much lost interest when it merged with West Midlands and became Midcounties. And though I’ve banked with Co-op (Smile, or maybe we should call it “Gurn” now 🙂 ) all that time I was at first told I could not join the Group (its parent) as I wasn’t in a retail area for the Group, then when they extended membership to CFS customers I had lost interest in being part of a big, remote, co-op.
It seems to me that “big” and “remote” are words that sit uneasily with co-operatives. How are you really meant to implement the principles, of openness, democracy, education and so on when meetings may be hundreds of miles away, or split into local ones where you don’t hear all the arguments, and board positions might be so few relative to the number of members that they effectively represent more members than the average MP does, and you are unlikely to know whom you are voting for.
As has already been mentioned in this thread, the problems we are seeing now do seem to be confined to the co-operative behemoths and that the business model is thriving in smaller businesses and social enterprises all over the place.
When we set up ALDCO in around 2000 perhaps we focussed to much on being “liberal entryists” to the big CRS/CWS/Co-op Group and its regional affiliates (after all one of the founders had just crossed the floor to us from being a “Labour & Co-op” party councillor so was bound to focus on his former Co-op involvement) rather than on evangelising the model in a far wider context.
On the Co-op food retail offer in particular, when I last stood for election around here, a hot topic was a planning application from Tesco to turn a pub into a Tesco Local right opposite both a Costcutter and a small (OSG/Midcounties) Co-op (plenty of competition already you might think). When out cnavassing I asked people their opinion and to my surprise the Co-op got most support from the middle (read £2m houses) class parts of the ward and Tesco got most support from what you would have thought (at least when I was growing up with working class grandparents in Glasgow always going to the “coaperaytive”) elderly, labour supporting pensioners. Because on a pension the idea that Tesco can save you maybe 10% on everything might be the difference between eating and not eating one day a week. So whilst I would not want to abandon the CRS offer, it needs to be improved, and taken out of the hands of “worthies” who love the model more than the customers’ needs.
But more generally, anyone wanting to promote co-operatives needs I think to focus on the many other (unlimited?) number of applications of the model (I tried, for instance, getting our homlessness service to reinvent itself as a “co-operative-renters agency” and our leisure services as a co-op on the lines of Greenwich Leisure – both fiercely opposed by Labour at the time who called both “privatisation” – as well as our students union here at Brookes).
It’s a great model for mutually owned housing for instance (perhaps even an entire “co-operative garden city”). I proposed once breaking my entire university into a bunch of discipline based student-worker co-ops with a secondary co-op providing central services and some distribution between the primaries that made more or less from research or teaching income. All a decade and more before Francis Maude came along with his mutualisation/right to manage guff.
I’m not saying we deliberately get rid of the Go-op Group sized behemoths, but recognise that they may have got too big and focus on promoting the model in other parts of the economy.
As a long standing but now ex employee of the CWS / Co-operative Group, I find the whole situation terribly sad. Internally watching the direction of the business was akin to watching a train crash, and the senior executive culture within the business at Head Office over the last 10 years was one which set unrealistic targets would not brook constructive criticism, anyone in disagreement was seen as negative, not on message considered not to have the correct behavioural profile. The business employs many capable ethical people and has lost many talented people who have been frustrated by the selection by attitude rather than aptitude that has pervaded the business.
There have been a series of disastrous decisions involving changes of direction which have wasted millions and the level of funding for the Labour Party is peanuts in relation to the size of the business and comparative donations from the private sector to the Tory Party.
Around 10 years ago the co-operative Group were finding that the Lib Dems were actually closer to Co-operative principles on many issues than the Labour Party and there was some debate as to whether there might be some change in allegiance .
Much is being made of the democratic process resulting in weak board control, as I see it democracy is one of the strengths of the business and I would urge all customers of whatever political persuasion to get involved and take back the business. If you are to have an opinion on the force that the Co-operative should be what are you doing about it ?
If you are not a Co-op Member then you do not have any right to comment, but if you use the business then you can get involved in the policy making process.
It has been indicated that the Mr Flowers was put forward by the group executive as a strong character who could verbally bully the the board, and stop them arguing over direction illustrates the ethos of the Chairman and Chief Executive of the Group.
Unfortunately the Co-op is a microcosm of UK plc with the people at the top overvaluing their capabilities and bolstering their positions by having people around them who will not challenge their authority, well it makes life so much easier ………
Of course you have a right to comment. Especially if your non-membership is down to being exasperated by the byzantine structures and cliques. As a Midcounties member I have a right to comment on Co-op Group matters as they impact on people’s impression of everyone that operates under the logo. I still say that co-ops can be simply too big for the internal democracy to be terribly meaningful.
I sometimes wondered why the co-op shops were often so expensive but now we know the colossal salaries and pay offs given to Peter Marks and others the reason is clear . There is no future for this organisation if continues on its present course. The Labour Party seems to have used the Co-op as a source of funding without any concern for what it was doing, although the amounts might be small in relation to the total turnover. Even the low interest loans can have had no real impact on the finances of the Co-op Bank.
The problems of this organisation are much more serious than that and as others have said it is strange that something that was intended to help poor working class people is now only affordable to better off middle class people – the same as the Labour Party. Presumably they are the “ethically minded” types who would see nothing wrong with paying the boss £1 million per annum.
In a nearby town the middle classes got up a big campaign to stop Tesco opening but many working class people wanted them to come. Now the Co-op is closing and selling out to Waitrose but I have not heard many complaints.
When I was referring to the right to comment this was in relation to William’s assertion that the movement should be a positive force for social change , this has been it’s historical role and depended on the democratic structure to serve the needs of its members, in a way similar to that of the main political parties the number of active card carrying members has been eroded which in turn erodes the democratic process. This can result in dictatorship from a relatively small cartel of people. The active membership of the co-operative societies, regional and national are self selecting and usually have a political axe to grind, this can seem to reduce the competitive edge of the business particularly in the short term. I share Jock’s frustration as a member and would implore more members to exercise their democratic rights.
@nvelope2003 et al
You might as well say we don’t need a Woolworths because it failed, or any of the current big companies and banks because they steal our money to pay huge top salaries.
Coops can get too large, they can be vulnerable to the destructive impact of the Finance Industry shafting the economy to grab cheap assets (and tax) to keep their ponzi schemes afloat as they fix exchange rates, commodity prices, interest and above all the gold price to try to cut off our escape route.
The cooperative model claims back ownership and control from the hyper-rich and can (along with nationalised induistry) resist the subordiation of societyt to the rentiers. That is why, win or lose, it is worth defendinbg- joining, and managing well, especially for small local scale enterprises – syndiacted agricultural distribution, and production and retail co-ops.. Perhaps we should be agitating for proper legal protection for them against cheap-labour, shoddy-goods, unFair trading? Join the battle rather than snigger on the side lines?
William Hobhouse might note that in fact this was a Non-cooperative bank? It was plc with a minority of elected board members. Risk control and assesment was in the hands of Merlyn Lowther (she of the bank notes) , formerly of the Bank of England. Peter Harvey (moved over from a long career in the businesss bankinbg section of Barclays) was in charge of the committe reviewing large business risk exposures; there was William Hewitt, former finance director of the RAC;; the bank was given a clean bill of health by the financial services expertise of KPMG; in effect it would seem the Bank was in the hands of bankers of some standing. lt was exploded by excessive debt which seems to be the result of their usual banking practices more widely, perhaps. The apparent fun and games ofthe Rev Flowers would seem to be a useful way for the Coalition to distract attention fromn the urgent need to split speculation away from retail banking services proper and allow the separated finance arms to implode.
When the Co-op Bank ws in the past run by elected board members (jeered at as idle dreamers?)it was depressingly cautious and of course safe, as banks should be.
Michael Parsons
The country seems to have managed fairly well without Woolworths although I regret its passing but it no longer exists anywhere else as far as I know. I am a member of the Co-op and want it to thrive. How can it do so if it is too expensive for ordinary people ?
Yes Co-operative Bank PLC should have maintained its old fashioned banking traditions because we want something different from a bank than we do from a shop. It was disastrous that the bank tried to imitate the commercial banks.
@nvelope2003
Thanks and well said. Yes – I should have been clearer: we dont denounce shops because Woolies failed, so why attack all co-ops if one of them collapses? Though the Bank was exploded by contrived debt in the normal Financial Industry expert asset-grabbing way it seems, like businesses and countries across the “gobal” world it seems.
I tend to disagree, but it will need the already flawed “inquiry” to find out for sure. I’m betting that in his headlong rush a, to “save the world” and b. to prove that mutuals can look after themselves, Gordon and the Treasury put immense pressure on CFS to take over Britannia. And again actually later the coalition probably did likewise to get them to take on the Lloyds branches but it’s the Brit acquisition that really led to this IMO. Sadly the inquiry will not be allowed to call current or former ministers. We can only guess why.
@Jock Coats
Disagree with what? These bankers I mentioned moved in did they not? and crashed the bank by debt as per usual for such. Of course the Coalition would be involved, the B o E is the leading market-rate fixer via the Treasury bond market and inflicts losses on hard-workig savers thereby: there is no independent price discovery by supply/demand on the system; just a transfer from savers and earners to finance specultors by creating cheap money. They grab what they can from house-buyers (watch the bubble burst), from pensions, from small firms, from once stable mutuals, frm the co-op etc, (just think of the billions looted by LIBOR fixing unpunished). But never grab by tax from the big boys who back them, never by criminal sanctiions either unless really pushed: just fines if “unfortunate mistrading” comes to light, fines which are simply added to the cost of doing business! And when the whole City ponzi scheme fails yet again they use their control of the State to squeeze fresh cash from the poor. Alteady e.g. they have loaded part of the new mortgage-scheme risk onto the taz=payer(ie not on to big profi tand income takers) by ‘guarantess’.