Mark Hoban speaks out in favour of co-operative and community societies

On Friday the House of Commons had its second reading of the Co-operative and Community Benefit Societies and Credit Unions Bill, brought in by Labour MP Malcolm Wicks (Croydon North).

Shadow Treasury Minister Mark Hoban spoke for the Conservatives. Here are some highlights from his speech:

"The hon. Gentleman asked whether we would support the Bill. He acknowledged that the Liberal Democrats were going to do so, and I see that the hon. Member for Twickenham (Dr. Cable) is a sponsor. I am pleased to say that we, too, will support it. It is very important, as it will modernise the legal framework of co-operatives and protect the interests of the members of co-operatives and industrial provident societies through the provisions that have been expanded on at great length.

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We should not underestimate the vital contribution that co-operatives make to the economy. One in three of the population are members of at least one mutual, and among Members of Parliament that rises to the staggering proportion of seven in 10. That strikes me as a very high proportion and shows that it is not just on the Labour Benches that there is interest in, and membership of, the co-operative and mutual sector. I myself am a member of a credit union, the Portsmouth Savers credit union, and my wife is a member of the Co-operative Retail Society. The largest supermarket in the part of my constituency in which I live is run by the Co-op, as indeed are many of the convenience stores. Co-ops are sometimes characterised as being something of the north—I say that as someone who was born and brought up in Durham, and whose mother still remembers her dividend number—but the co-operative and mutual societies movement spreads across the whole country. Every community is touched in some way by its work.

There are more than 16,000 mutual organisations, ranging from building societies to NHS foundation trusts—a new approach in which the model of mutualities has been used. Football supporters’ clubs are also in the mutuals sector, and mutuals as a whole employ almost 1 million people and serve a membership of 23 million. Not only are mutual societies popular, they have an important contribution to make to the economy as a whole. They have annual revenues of £85 billion and a portfolio of assets of £477 billion, so they play an important role in the economy. As a number of hon. Members have commented, the increased scepticism about some of the more conventional models of ownership has led to a renaissance of interest in mutuals. Of course, the large mutuals compete alongside the very best in the private sector.

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Mutuals are going through a renaissance as mutuality is applied to new areas. The growth of credit unions, on which a number of Members have focused, is a good example. Increasingly, policy makers see benefits arising from models of mutuality, because in many different ways they fill a gap between the public and private sectors. To use an old Blairite phrase, they are the third way, offering the best of each. They are democratically accountable and have a public service ethos, with the characteristics of the public sector, but with dynamism and customer focus, which are often the characteristics of the private sector. They have provided a vital bridge between the public and private sectors, bringing the advantages of democratic accountability and consumer focus.

We are starting to see, for instance through changes in the health service, how mutuals can be used in the provision of services to our communities. In a way, it is an echo of the pre-1945 model of health care. Prior to the introduction of the national health service, a lot of health care was provided by mutuals. Now, as primary care trusts are splitting off some of their provision from their commissioning role, mutuals are again seen as a way of providing a governance framework for the provision of services.

Mutuals are not just a focus of Government policy, but a matter in which the Conservative party is particularly interested. That is why we set up the Conservative co-operative movement—to explore new and creative ways in which communities can deliver public services. I shall give an example from overseas. One thing that we are keen to explore is liberalising the supply side of education by enabling co-operatives to be a vehicle for the governance of establishing new schools. They could play a key role, as parent-run co-operatives provide both accountability and consumer focus. They could retain the public sector ethos yet be dynamic, because they would be freed from unnecessary bureaucracy. That model is used in Spain, where there are more than 600 co-operative schools, and in Sweden where there are nearly 100. There is one co-operative-run school in the UK, in Redditch. We believe that such models can be applied to the provision of public services in future.

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This is an important Bill. It is not controversial, and it will give members of industrial and provident societies the legislative framework that they need in order to feel protected, and that will enable them to continue to do their vital work in the 21st century without being seen as relics of an industrial past."