LV= (Liverpool Victoria), one of the country’s oldest and largest financial mutuals, have recently stressed that their ‘mutuality had served it well over more than a century and a half’. Yet it has decided to sell and thus demutualise, subject to ratification by its member owners.

LV= was established in Liverpool in 1844 to provide ‘penny policies’, which gave those without wealth an opportunity to bury their dead with some dignity. The need which led to the LV= being established is very much prevalent in 2020 Britain: I am writing this as news has emerged that UNCIEF have agreed to help feed families going hungry in UK. Too many live without the basic common decency of a secure home, food on the table and a fair wage. Despite the social circumstance which should make them more vital and necessary than ever, the economic system is still skewed against mutuals, co-operatives and non-traditional profit-maximising financial firms.

LV= have said they are doing this for capital reasons. The difficulties in changing financial regulations to make it as easy for a financial mutual to attain capital as a PLC are myriad, but definitely not insurmountable by political leaders who are interested in supporting different types of business.

It’s not just the ongoing burdensome regulation and poor support for established financial mutuals in which the system works against our movement. There is a need for a new generation of financial mutuals today, in exactly the same way that there was a need for different type of financial institutions providing for those not drawn from the upper echelons in nineteenth century. However, the fear is that the prevailing legislation, regulation and will is against the creation of a new generation of mutuals – whether deliberate or otherwise.

I believe that a system which valued diverse ownership and business models would ensure that LV= would be incentivised and facilitated in the same way as any private company or PLC to thrive. I also think that there would then be an even stronger case to limit the ability of mutuals such as LV= to demutualise. Many mutuals and co-operatives write into their own rules that they will never go down this path, or ensure that the bar for that to happen is higher than a press release and an AGM. When considering the proposition, the current members of LV= who wish to see a strong future for the organisation may wish to ponder the future of other financial mutuals who decided to demutualise. As has been reported, there are few success stories.

All power to the elbows of those working flat out to buck the trend and start new financial mutual – I know that the Co-operative Party will continue to campaign and plan for a world were new and existing mutuals do not face an uphill battle.