The problems of the Co-op Bank have been well documented, but what impact have they had and is the co-operative movement in Britain still relevant today? Chris Bond reports.
THE origins of the co-operative movement in Britain are as northern as the Pennine hills and the former mill towns nestled around them.
They stretch back to the mid-19th Century when fledgling co-operative consumer societies first began to flourish. These groups were owned by their members, usually small retailers selling local goods and produce, who teamed up to combine their buying power.
From these humble beginnings the early co-operatives grew, developing into organisations like the Co-operative Wholesale Society, what’s now called the Co-Operative Group, and by the 1930s they had become the biggest food retailers in Britain.
Today, the Co-Operative Group has its fingers in many pies. As well as being the largest “mutual” business in the UK, owned by its many members and customers, it’s the biggest funeral provider and owns one of the largest pharmacy chains in the country. It’s also a big player in the world of food, travel and insurance, among other things.
It’s not just been a success on our shores having grown into a global phenomenon worth over a trillion dollars. There are now more than one billion members of co-operatives worldwide which between them employ over 100 million people producing everything from Champagne to Spanish olive oil. They also account for all the Fairtrade goods produced which means that around 887,000 smallholders in developing countries get a fair wage.
However, the Co-operative’s image has been tarnished in recent times after former Co-op Bank chairman Paul Flowers, a Methodist minister from Bradford, hit the headlines when a newspaper alleged he had bought drugs including cannabis, crack cocaine and ketamine.
The bank itself has been struggling following a merger with the Britannia building society in 2009 and a £1.5bn rescue plan had to be approved in December handing 70 per cent ownership to private investors. Last month then brought further bad news after it emerged the bank needs to raise another £400m to cover past issues, with the business set to report losses of up to £1.3bn for 2013.
The bank’s financial problems have certainly had a damaging effect on a brand which prides itself on its ethical values and principles. But despite all the negative headlines, co-operatives remain a major cog in Yorkshire’s economic engine employing 18,000 people and generating a turnover of £2.2bn.
There are more than 200 co-operatives in the region from community groups involving a handful of people, to Suma Wholefoods, based in Elland, which is the UK’s largest workers co-operative.
Sheffield has a proud tradition of supporting co-operatives and its here that a group of craft workers and artisans joined forces to help revive Portland Works, near Bramall Lane. Built in 1870 as the city’s first forge, it provided a working home for successive generations of welders, engravers and metalworkers.
Over the decades the Grade II* listed building fell into disrepair until a campaign was started to revive it and today there are 30 tenants including a knife-maker, an engraver and a photographer.
Colin Havard, who manages Portland Works, says this sense of togetherness has created a thriving working environment. “Any new tenant has to buy a share and the aim in the long term is that tenants look after the building because that hasn’t always been the case in the past.”
He believes the success of Portland Works is down to the collaboration that goes on there. “If the engraver needs to use a blade he can go to the knife-maker and this creates a sense of sharing which is what we’re all about. We don’t just want to have office space, we want to have a space for making things.”
Like Sheffield, Hebden Bridge has long-standing links with the Co-operative movement which proved helpful when Mike Barrett and five others bought Valley Organics, a local food shop, and turned it into a workers’ co-op. “The previous owners were selling the shop and four of us who worked there, along with two others, decided to buy it because it was a way of saving the shop and people’s jobs,” says Barrett, who also works as a graphic designer.
“We’re doing very well, takings are up 20 to 30 per cent and since we’ve taken over we’ve had a lot of goodwill from the community. It’s a positive circle because it means we can bring in more fresh veg which attracts more people into the shop.”
They’re doing so well that they’re already looking to take on two extra staff. “It was a big step in the dark because none of us had done anything like this before so it’s worked out really well.”
Valley Organics isn’t the only co-operative that’s thriving in the vicinity, there’s also a pub, a bakery and a lighting business among others. But Barrett admits that what works in one place isn’t guaranteed to work somewhere else. “The Co-op model still works very well in Hebden Bridge where there happens to be a long history of workers owning things, but that doesn’t mean it will work everywhere.”
Although the idea of co-operatives still appeals to many people, there’s no escaping the fact that recent events have left a sour taste in the mouth and Labour MP Barry Sheerman admits the Co-op’s image has taken a bit of a bashing. “We can’t deny that it’s had a terrible impact on our brand,” he says.
The Huddersfield MP has been involved in the Co-operative movement since the 1970s, when he set up an employee co-operative as a university lecturer, and he wants to see the organisation return to what it’s good at, which is serving its community. “It’s a wonderful ideal but it needs to come to terms with what has happened and reinvigorate its democratic roots.”
At the same time he feels it also needs modernising. “It needs re-energising along the lines of the John Lewis Partnership where employees are given a more hands on involvement,” he says. “There’s also new technologies like crowdfunding and other social media that offer great potential to the Co-op movement.”
It’s a movement he believes still has an important role to play. “We need credit unions to take on exorbitant payday lenders; we need cooperative grocery stores which source their food ethically to take on the big supermarkets; and we need a mortgage provider offering mortgages at reasonable rates.”
He says at a time when the welfare state is being diminished we need the values of co-operation and compassion that the Co-operative movement embodies. “It’s still a not-for-profit movement with any surplus reinvested in the community and the people who live there, and that’s not a bad principle.”