Britain’s vote to leave the European Union swept away many of the assumptions upon which our economy and politics were based. And in the ensuing uncertainty, warning signs are starting to appear: slowing business investment, and industrial output in decline. Wages are falling in real terms, and living standards are starting to fall.
For the second time in a decade, a generation of Britons are staring down the barrel of an economy that will leave them worse off than their parents. Entire communities face being left on the scrapheap, and, just as in 2007, millions risk being left behind – their talents wasted, and their potential unrealised.
We’ve been down this road before, and we know where it goes. It’s time to do things differently.
In this election, you’ll hear a lot of rhetoric about ‘giving back control’. But for us as co-operators, it’s more than a slogan – it’s what we do.
Britain needs a more inclusive economy, where power and wealth are shared – where workers have control over their workplaces; businesses make long-term, sustainable decisions; opportunities and wealth are created in every region; and consumers get a fairer deal. By existing to provide a service for their members rather than for their shareholders, co-operative and mutual enterprises need to be at the heart of this new economy which puts people before profit.
And in many parts of the world, they are. In Emilia Romagna, a region in Northern Italy, co-operative enterprises contribute almost 40% of GDP in the province. Nearly two out of every three citizens are a member of one or more of the region’s 8,000 co-operatives. Thanks to this thriving co-operative sector, Emilia Romagna has the lowest levels of socioeconomic inequality of any region in Europe.
Our co-operative economy is strong, vibrant and growing – but it is still smaller than many of our European neighbours. Britain’s 7,000 independent co-operative enterprises are owned by 17 million members and employ more than 220,000 people. The five largest co-operative businesses paid over 50% more tax to the government that the combined UK tax contribution of Amazon, Facebook, Apple, eBay and Starbucks.
In the next Parliament, the government must seek to at least double the size of the co-operative sector – a commitment that Labour’s Shadow Chancellor John McDonnell has championed:
“We should be more ambitious about what can be achieved here. We want to see resilient, high-productivity businesses in an economy that is fairer for everyone. The next Labour government will look to at least double the size of the co-operative economy. That’s a £40 billion boost to the economy.”
Our ‘Plan for a Britain where wealth and power are shared’ in this general election sets out five things the next Parliament can do make this happen:
5 ways to double the size of the co-operative economy
Level the playing field
Co-operative enterprises labour under regulatory frameworks which put them at a disadvantage. We want to see a new Minister for Mutuals leading the Inclusive Economy Unit, responsible for developing a policy roadmap aimed at making co-operative options more user friendly and removing the unnecessary red tape.
Fairer tax treatment
Community owned co-operatives and social enterprise don’t distribute profit to shareholders and exist for a specific social purpose, so shouldn’t be burdened with the same business taxes as profit maximising big business. We want them to be exempt from corporation tax and business and non-domestic rates.
Open funding streams
It is too difficult for co-operatives to access the investment they need to start up and grow. A new funding model is needed – including a new British Investment Bank run along mutual lines, Mutual Guarantee Societies, a co-operative investment fund and the removal of individual investment limits on community share offers.
Improve business support
Governments, local government and Local Enterprise Partnerships should provide tailored support to co-operative enterprises, learning from best practice like the Wales Co-operative Centre which supports co-operative and social businesses to start and grow.
Make better use of the public pound
By leveraging the supply chain of organisations like local councils, hospitals and universities, the public pound can be used to generate community wealth rather than paying shareholder profits. Buying goods and services from worker- and community-owned businesses enables the sector to grow and regenerates local economies.