Cats, dogs, co-ops, Brexit and breakfast.

Over the weekend, I was with a wonderful gathering of staff and Board directors across the UK’s co-operative retailers. It was our annual Co-operative Retail Conference.

The photos are now up online of many of the people who participated. But there are a few four-legged delegates that we have had over the years and this year was no exception.

Newt is a cat who prompted some instant teamwork at the event, as she escaped her car and left Jane Cameron, one of the most experienced co-op housing specialists, searching with others across the surrounding lands. Radstock Co-op offered a room for the night for Jane and her partner, so the search could go on and eventually, underneath another car on the other side of the hotel, Newt showed herself and let herself be led to the warmth and comfort of a Co-operatives UK conference.

On stage, there was one slip from a speaker that I thought could be a hopeful meme to spread – at least for those concerned with Brexit. The speaker referred to ‘Breakfast’ instead of ‘Brexit’.

Now I understand that the substance of our planned exit from the EU is totally serious, but all too often the endless debates of the day are not. They can be fanciful, ideological, fantastical.

So the next time I hear something that sounds crazy on Brexit, I am going to think of it in my mind as Breakfast.

Breakfast Britain…? Breakfast Blues…?

Life after Breakfast.

It doesn’t sound so bad.


How do we communicate the case for a co-operative economy?

We all tend to tell the stories that reaffirm our existing beliefs. So where we flock together with others that share our assumptions, we tend to communicate in ways that work for us – but don’t persuade anyone else of those things we are already persuaded of… we have become closed, not open.

Technology and social media widens the envelope of who we reach, but can reinforce the same effect of people clustering around affinities of belief.

The idea of framing is that we have a mental model that we project on and out into the world. One classic work of political science that examines this is by George Lakoff: Don’t Think of an Elephant: Know Your Values and Frame the Debate. His argument is that we live our life in stories and metaphors, and prompted by one or another story, we respond – and vote – in different ways.

A excellent new Report on this is published by the New Economics Foundation and partners. It explores the frames that can reach out to a wider audience and that reinforce positive values of social justice or environmental sustainability.

When it comes to the economy, many people feel a sense of fatalism or helplessness. It is a force which acts on people, but is not one which they can shape.

Two frames the authors explore to overcome this are to harness people’s frustrations with this, pointing to big business which is running that economy, or to harness their values, by setting the economy within a wider frame of the common good. With those starting points, conversation can go wider.

I think these are great tools for those who work in co-operative education or want to communicate the benefits of co-operative action. They are worth testing. And if they are reinforced by other organisations and campaigns that share the same values, the multiplier effect could potentially be significant.

A cookbook for co-operatives

Co-operation started with food, when the Rochdale Pioneers set up shop. If we thought of growing the co-operative sector like preparing a meal, what would be our cookbook?

First the ingredients. Co-ops are people centred businesses, and so they start with people’s needs and stand or fall by the extent that people work together and take responsibility. But they can’t be just any people. They have to be a little bit organic – willing to put their ego aside and to work with others. There are many entrepreneurs in the co-operative sector, but theirs is the entrepreneurialism of the team. It is not for everyone even if most people have skills of co-operation and can learn more; what we have always called ‘co-operative education’.

Second the timing. Some co-ops are rapid, pop-up businesses that emerge in response to crisis. When the Star Inn in Salford was put up for auction, it was the only pub left within a twenty minute walk. Local people rallied together to raise the money to save the pub. When foot and mouth disease struck farmers in Lincolnshire, the local independent co-operative helped to organise them into a co-op, so that they could keep more of the money from the livestock in future. Other businesses take time, because they rely on relationships. Sometimes co-ops can be slower to start as a result. But they can also be slower to fail, as well, because having people onside is key to survival when things get tough.

Third, the preparation. There is no one chef for the co-operative sector. It is a plastic model that is constantly being renewed and reinvented. One of the fastest growing areas is co-operatives with multiple constituencies of members (sometimes called ‘multi-stakeholder’) – with new approaches developed for their design and governance. But it can help to have recipes and for many initiatives, there will be a template or set of examples that can be drawn upon and adapted. Co-operatives UK runs a programme called The Hive, with support from the Co-operative Bank, as part of its continuing commitment to an Ethical Policy. One way or another, there is advice out there for would-be co-operatives.

It is an exciting time to be in the co-operative sector, with a strong commitment to its growth from leading politicians, reflected in this week’s Ways Forward conference in Manchester. We are a bottom up movement, so the state can’t create co-operatives directly but it can challenge a business environment which privileges investor ownership, to create a more sustainable balance with which co-operatives can thrive. Co-operatives UK is working with our members and partners of the sector to feed ideas into this process.

And like the best food, after all the work, with co-operative success comes the sharing.

How to double the UK co-operative sector

I am speaking today at a conference organised by the Labour Party on different models of ownership. This follows an open and substantive report on new technology and co-operative and mutual models of business in today’s economy from last year – the Alternative Models of Ownership report.

One of the manifesto commitments Labour made going into the last election was an aspiration to see the UK co-operative sector double in size.

In the co-operative sector, we are not waiting for national government and we will work with all parties in power. The Lib Dems deserve credit for backing renewable energy co-ops when in government, the SNP for overseeing a renewal of farmer co-operatives and local food in Scotland.

But the commitment by Labour, with input from the Co-operative Party, is an unprecedented recognition of the power of co-operation to spread entrepreneurial action, to harness innovation and to engage communities and workforces at a time of risk.

As the Confederation of British Industry (CBI) said recently: “it is vital that employees are engaged with and motivated by the businesses they work for and co-operatives can be a way of delivering this.” The think tank IPPR has published an excellent agenda for action to promote co-operative and employee ownership. Worldwide, Oxfam last month pointed to the way in which successful co-operatives are successful in helping to spread wealth.

It helps in Brexit times, of course, that co-operatives tend to have rooted ownership, contributing to local economies and, as pioneers of the Fair Tax Mark, believe in the values of social responsibility when it comes to paying tax.

Here is a wonderful video of one recent community co-operative, Glenwyvis Distillery, supported through the Hive Programme backed by the Co-operative Bank.

So, how would a government go about creating the conditions for that growth?

The co-op sector itself has developed its own bootstrap ambitions and actions under the theme of Do It Ourselves in the form of a National Co-operative Development Strategy. This recognises that growth is of value if it is growth not just in turnover, but the growth of people’s participation and the spread of values of equality and sustainability. It also looks at examples of successful co-operative sectors across the world, in research by the Co-operative College. Regions such as Basque Spain, Emilia Romagna in Northern Italy and countries such as Finland, Brazil and Switzerland benefit from a ‘co-operative effect’.

On the back of this, I will suggest that there are four key steps for policy action to accelerate co-operative action.

Labour four steps

This is an open conversation, not limited to our sector or to any one brand of politics. It is a good time to imagine what our economy could be.

What are your ideas?

Fake Non-Profits – lies, damned lies and Carillion’s non-profit companies

One of the ripples that has emerged out of the failure of Carillion is the use by private companies of ‘non-profit’ companies as a front for delivering public services.

What could be more trustworthy than a community enterprise which makes no profit out of essential services?

Well, the answer is that these can be fake non-profits, simply serving as a way for investor-owned outsourcing giants to launder the proceeds.

In June 2013, Carillion (then John Laing Ltd, subsequently Carillion Integrated Services Ltd) was awarded the contract by Ealing and Harrow Councils to run their library services for ten years, covering:

• Six static libraries

• Libraries back office support services

• Home Library Service

• Schools Library Service.

But there was a fig leaf thrown in, in the form of a non-profit company with a heartwarming name – Cultural Community Solutions, responsible for day-to-day management.

When we look at the accounts submitted to Companies House, the story becomes visible. Cultural Community Solutions made no profit because it looks as if it has paid all of its profit out to others including companies in the Carillion family. From year to year, gross profit is simply eaten up by the ‘administrative expenses’. In 2016, they were exactly the same figure.

As a non-profit, they could also do something that other commercial, or indeed in-house services, could not, which is to claim discretionary relief on business rates payable on library premises. As with the big fostercare companies financed by offshore venture capital, designed to escape taxation, the financial profits this non-profit passed through to Carillion were in every possible way a gift from the taxpayer.

This then is not a non-profit company. It is a for-profit operation, masquerading as a non-profit and presumably using time honoured techniques of transfer pricing – a device for corporate groups to shift monies between legal entities through inflated charging.

Devices like these, some charitable, have been used in the leisure sector as well. This is one part of public services where true social enterprises, like Freedom Leisure, Fusion Lifestyle and GLL, have a successful track record. Outsourcing companies have sought to get back into the market through a similar device of non-profit trusts. Serious questions surely now need to be asked about these.

It is not a new issue. Wolves will snap up some sheep’s clothing if they see a bargain and allowed to get away with it. In 2012, Social Enterprise UK’s Shadow State report helped to shine a light on companies like A4E, banned that same year from calling itself a ‘social purpose company’, since its primary purpose was always shareholder profit.

Cultural Community Solutions wasn’t a Community Interest Company, a specific form of social enterprise, nor necessarily marketing itself as a social enterprise, but it appears as if it was assumed to be such by some commentators.

Anyone can call themselves a non-profit, just as many can claim to be a social enterprise, but there is an underlying first principle that needs to be recognised, as in the International Statement of Co-operative Identity, which is that of independence.

The Financial Conduct Authority for example, rightly tests co-operative and community benefit societies against this measure of independent ownership and control, including any close links that societies may have. We need that same test more widely when claims of being community are made – in the name or in the legal form of a company.

If a business is set up with a dependency on others, whether state or private investors, the nature of the company will ultimately reflect the interests of those dominant partners.

The Co-op as Campaign – taking action on modern slavery

Unadulterated food was the first campaign of the co-operative movement, a natural offshoot of efforts by members to meet their own needs in the nineteenth century. In the late twentieth century, the Co-op campaigned with its members on issues of international debt and climate change – an unadulterated planet.

In a sign of its return to health, the Co-op has returned to campaigning. With 4.6m members, a decision was taken in May 2017 to campaign on the issue of Modern Slavery. Since then, building on the core focus of reducing the risk of slavery in its supply chains, the campaign has had three aims:

  • awareness of slavery – research the Co-op ran in 2017 suggested 4 out or 10 people in the UK do not know what modern slavery is;
  • extension of Project Bright Future which is the Co-op’s unique scheme to provide a pathway back to paid employment for victims of Modern Slavery; and
  • greater support from all of civic society for victims of modern slavery to assist their recovery.

Bright Future had an initial launch in March 2017, with independent evaluation by University of Liverpool in November 2017 and Parliamentary Roundtable coverage in January 2018.

The Co-op is now recognised as the leading business voice in the UK on the issue – a member of the Home Secretary’s Business Against Slavery Forum, on the Expert Panel for the Evening Standard’s Slavery campaign chaired by Cardinal Nichols of Westminster, with a report due to be published imminently and often held up by the Home Secretary and the UK’s Independent Anti-Slavery Commissioner as the model for businesses to follow.  In November the Co-op became only the sixth company – and the first UK company – to be recognised for leadership on the issue with the Thomson Reuter’s Stop Slavery Award for work on victim support.

The Co-op has worked openly and collaboratively with other co-operative societies, with a number engaged in Bright Future. Alongside this, Co-operatives UK has shared resources with our members –

The call is now out for members to sign up. There is now a very clear, simple and effective way for anyone to support the campaign – by writing to their MP to ask them to support Lord McColl’s Private Members Bill which is easily done by clicking on the #FreeforGood campaign.  All you need to do is click, enter your postcode, your email address and – ideally – add in a line to the letter saying you are a co-operator and… press send.

Co-operative values are about working together. When you co-operate, you raise the limit of what could otherwise be done. In this case, a return to business health and a return to campaigning means that the Co-op is helping to transform the lives of some of the most vulnerable and exploited people in our country and the world.

Davos – the world’s problem-solving summit… for those who cause so many of the world’s problems

The agenda is a tribute to its organisers, identifying so many challenges that an unequal and unsustainable world faces. But who is the agenda for? This is the trouble with Davos. It is the world’s problem-solving summit for those who cause so many of the world’s problems in the first place.

Oxfam has just published an update on its work on global inequalities. 82% of wealth created worldwide went to the top 1%. The poorest half saw no increase at all. Oxfam together with a wider alliance called Fight Inequality is calling, among other things, for wider ownership. Quite right and co-operatives are one proven way to disperse ownership more broadly

So, as the world’s business elite starts the World Economic Forum in the snow and slopes of Davos in Switzerland, we are publishing a report on the co-operative alternative – showing how the world’s largest co-ops share ownership, control and profits with tens of millions of people.

The report by Professor Johnston Birchall is on the governance of large co-operative businesses across the world. It is a comprehensively revised and updated second edition of a classic work, examining how the world’s largest co-ops ensure that their customers, employees and suppliers have meaningful influence over what the businesses do.

The findings are encouraging. Good governance can’t be taken for granted, but done well, it allows for that magical mix that the Davos participants are talking about – inclusive innovation and a formula of economic success that empowers the many and not the few.