Where the State’s Writ Does Not Run

1^st August 2014

To mark the passing on the Co-operative and Community Benefit Societies Act, Ed Mayo, Secretary General of Co-operatives UK discusses what it means for the co-operative movement

We have the first new consolidated Co-operatives Act in the UK for nearly fifty years. With our technical input, lobbying by co-ops and mutuals, ResPublica and the Conservative Co-operative Movement, plus support from across the political spectrum and preparatory work by the Law Commission, the Coalition Government has made UK a better place people who want to start and grow co-operaties.

As a co-operative legislator from a previous generation, WP Watkins, wrote: “true co-operation draws its inspiration from realms where the state’s writ does not run. Co-operative movements are not created by legislation. Nevertheless, without an appropriate legislative framework, a co-operative movement in the form of a growing economic organism is not possible or even conceivable.”

The landmark Co-operative and Community Benefit Societies Act 2014, which comes into force today , brings together long dated overly complex legislation into one unified statute. It also wraps up a programme of legislative reform delivered by the Coalition:

• cutting quite a bit of red tape;
• closing down some unhelpful loopholes where coops were overlooked in relation to business benefits and;
• confirming some new gains, such as a three-fold increase in the investment limit in co-operatives.

This shows what can be achieved when broad political support is backed up by firm government action. One new co-operative starts every working day of the week and the turnover of the sector has outpaced the UK economy in recent years.

Of course, there is focus and learning too, coming out of what went wrong at one co-op (out of over six thousand in the UK), The Co-operative Group. It lost sight of what members wanted, with leadership and governance structures that didn’t advance their interests. Co-operatives are businesses that are owned by and run for its members and are at their best when that co-operative difference runs through it like a stick of rock.

In that spirit, co-operatives across the UK came together recently at a congress in Birmingham, to develop an Action Plan for the co-operative sector, focusing on new solutions and new needs. A great example is the new programme AltGen, which supports young people from age 18 – 29 to set up worker co-ops as a collaborative and empowering solution to youth unemployment.

There is a new law and a new sense of purpose for co-operatives in the UK.