Move, move, move your money


The UK campaign to call for us all to ‘move your money’ to co-op and mutual banks launches today.

This is a campaign kick started by hope and passion and it will succeed if we can get the public and political debate off the oceans of rhetoric and onto the only language bankers understand – money.

Credit Unions and The Co-operative Bank have both seen an increase in users over the last two years, whilst the Occupy movement – and the debates in mainstream media it has triggered – reflect a wider disillusionment with the way in which the traditional banking sector operates.

In the US, the ‘move your money’ campaign has been established around a relatively simple website to enable people to easily find and move their bank account away ‘from Wall Street to Main Street’, i.e. to a community bank or credit union. The campaign has received widespread publicity and support. A ‘bank transfer day’ on 5 November 2011 saw 65,000 people transfer their accounts to credit unions.

Pass the word. Move your money.

The international year in numbers

The International Year of Cooperatives so far in numbers:

Pope praises co-ops 0 hours
Launch in a dozen nations 274 hours
UK signs up to Coops Act 442 hours
Bill Gates says coops a solution for inequality 609 hours

A good start!


I have started to tweet – facts, thoughts and dreams from the mayo zone

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History is not a disposable product

In Ipswich on Saturday, after the heady days of Government announcements in the week, I was asked a question at the East of England Society which I hadn’t predicted. Why was the grave of the great nineteenth century co-operator, George Jacob Holyoake, in Highgate Cemetery not in a better state?

History takes us back. It roots us, even if too much at times can anchor us too.

When I was asked, a few years back, to create a new consumer agency, Consumer Focus, one of the starting points was to ask an eminent historian, Frank Trentmann, to write the new organisation a letter from the past – not to constrain us as if history was a catalogue of lessons, perennially a subject for the classroom or lecture hall, but to give us the freedom to understand the possibilities seen by those who went before us. Frank is coming to an academic post in Manchester, so we will be comrades again.

I have had the pleasure today of reconnecting with another friend from work before, via a long discarded but not deleted compuserve address. Bill Pardy, based in Newfoundland, Canada has long written about community development as a deeply reflective and thoughtful practitioner.

Bill writes that “History and the communities that it created, unlike current consumer products, are not disposable, when no longer of immediate use. Both have tremendous residual value in the lessons learnt by our fore-parents and the many battles and wars that were fought to preserve what was considered important. To develop as a people and to create meaningful economies for the future requires in-depth reflection of our history. This is not for history’s sake, but to discover the values, strengths, and more so, the wisdom that helped people build new futures; as their old ones became redundant.”

Co-operation and the state’s writ

It is such a welcome step that the Government has taken today to put the jigsaw of legislation around co-operatives and societies onto a coherent, simplified footing.

This is something that co-ops have argued for for ages. The then United Kingdom Co-operative Council first mooted proposals for a Co-operatives Act in the 1990’s. Since then there have been a number of steps towards the process of reform including a series of private members bills and consultations led by the Treasury.

The law is more fragmented than faced the charity sector, which has benefited from the same process under the last government. Both charities and companies have had consolidation acts. The last one for co-operatives was within months of me being born – a little while ago. So it is a great and helpful step to charge the Law Commission with coming up with a Consolidation Act for Co-operatives and Societies, to come to Parliament in due course (due course always meaning some time down the line: there is a risk there, but the process is underway and getting to start has always been the difficulty).

The benefit of a clear, new law is also that there is greater understanding and recognition of the society model, with all it’s democratic credentials and quality. I have seen enough examples of business advisers not understanding it, policy makers not understanding it (no coop school for example has been allowed to form in legal terms yet as a society) and coops facing uncertainty or having to pay for expensive professional advice in order to get on and do business.

Changing laws doesn’t make for business success. But laws can get in the way. As a cooperative legislator from a previous generation, WP Watkins, wrote “true cooperation draws its inspiration from realms where the state’s writ does not run. Cooperative movements are not created by legislation. Nevertheless, without an appropriate legislative framework, a cooperative movement in the form of a growing economic organism is not possible or even conceivable.”

It is fair to say, this is a historic decision.

A John Lewis or a Goldman Sachs Economy?

We have called, in a submission earlier this month, for the idea that there could be a ‘right to request’ for employees to buy a firm that is threatened with closure. It is good news that the Liberal Democrats have picked up on the idea. Nick Clegg this morning calls for a ‘John Lewis Economy’.

The Deputy Prime Minister also focuses, according to media reports, on tax incentives. You have to say, though, that there are already significant tax advantages for employee ownership.

I believe there are in total around £1.2bn of annual tax incentives for employee share ownership. With the honorable exception of the Share Incentive Plan, the big disadvantage of this spending is that past schemes have tended to benefit people on higher incomes far more than others. One factor is the difference between capital gains tax and income taxation rates, when corporate executives benefit from ownership options as part of their packages. This makes employee share ownership a driver of rising top executive pay rather than one for wider staff economic participation.

That is not John Lewis. It is Goldman Sachs.

Surely, it is more interesting to look at how to use employee ownership to foster a more participative economy? Here are three suggestions as a starter for Nick Clegg.

1. Any executive compensation schemes that benefit from the taxpayer ought to be open to at least fifty per cent of the workforce. It ought to be open to all legal models for employee-owned co-operatives, rather than driving through taxation policy a preference for certain corporate forms.

2. The insolvency regime could be made more conducive to the rescue of ailing firms through employee ownership, taking on board some of the ideas set out by Anthony Jensen in his recent report, funded by Co-operative Action.

3. Italy’s Marcora Law, for example, makes it easier for people who are made redundant to package up their unemployment benefit to capitalise a buyout co-operative, moving from welfare to self-employment.