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25 September 2000

The Co-op faces the barbarians

Demutualisation rages on, but the co-operative movement will resist

By John Monks

The establishment of the first Co-operative Retail Society in 1844 has been described as one of the 20 greatest business decisions ever made. The principles established by the Rochdale pioneers have had an impact across the world.

From India to Italy, Canada to the Carib-bean, Germany to Japan, whether in social democratic states or those that encourage capitalism red in tooth and claw, the co-operative sector is flourishing. The idea, at its most basic, that consumers or workers should take control of an enterprise for themselves and run it on open and democratic principles is as powerful as it is simple.

In Britain, the co-operative movement is widely seen as dated and out of touch. But the principles it embraces are in tune with modern thinking; the democratisation of communications offered by the internet and other technological developments could yet herald another golden age for co-operation.

As the state retreats from some areas it previously embraced, most particularly in the caring services, the potential is there for co-operatives to step in. It has even been argued that “co-operatisation” – to coin an ugly term – could be to this decade what privatisation was to the 1980s.

Over the past six months, as chair of the Co-operative Commission, I have been hearing evidence from organisations and individuals with a wide range of views on the direction that the movement should take. My colleagues and I have been impressed by many things: first and foremost, the goodwill towards the co-operative movement that is to be found in many, many places. There is also a willingness to embrace change and an awareness that no change is not an option.

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Almost 50 years ago, Hugh Gaitskell chaired the first Co-operative Commission. Tony Crosland was the secretary. They came forward with many sensible proposals, which they believed would boost a movement whose advance during the early part of the 20th century was then beginning to slow. What they failed to recognise (and who can blame them?) was that a retail revolution was about to sweep the country, creating superstores, widening consumer choice and transforming the lives, or at least the shopping habits, of most of the population. We must not make that mistake again.

The retail sector – and, in particular, the Co-operative Wholesale Society (CWS) – remains the jewel in the Co-op crown. It might not be the biggest player in the food retail sector, but it retains a prominent position, and it is doing much to establish a strong position with its “Welcome” stores, serving neighbourhood needs, and the “market town” stores, filling a gap for which the out-of-town superstores fail to provide. There has been substantial refurbishment, and the standing of the Co-op is rising at a time when that of some other famous businesses is falling. The CWS family also includes the CIS, the highly regarded insurance arm, and the Co-operative Bank, whose transformation over the past ten years has been based on the promotion of ethical values and co-operative principles – an example of how co-operation can become a strong selling point. Then there are the funeral services, another instance of how, when people need someone they can trust instinctively, they turn to the co-operative movement.

Yet the threat to the movement’s future remains. Internet shopping and WalMart may well transform retailing. And all the while, like the barbarians at the gate, de-mutualisation lurks. The first challenge was seen off, but it might not be the last. Some see legislation as the answer. However, others argue that a strong, active co-operative movement, providing the services that members want, should have the strength to see off even the most determined carpetbaggers.

Our aim as a commission is to help foster a renaissance of co-operation. We need to help the retail sector meet its potential, provide direction on issues of corporate governance and, in particular, look at the issue of membership. We will also need to look at how we might strengthen the links between the different parts of the retail movement. Some local societies are showing a strong and imaginative lead, but others are lagging behind – and the public knows the Co-op only through the parts with which it has direct connections. One of our top priorities will be to encourage greater co-operation within the co-operative sector.

The second, related, priority will be to look at ways in which we might spread co-operative principles into areas that, at present, the movement scarcely touches.

Time and time again, the caring sector has been mentioned to us. Whether you are looking for someone to care for young children while you go to work, or to provide the support that the elderly require when they are no longer able to take care of their own daily needs, you want someone you can trust. It is clear now that the state is neither willing nor able to take on universal provision. The private sector has been found wanting. Here is an area in which there is a crying need for the application of co-operative principles.

But how can the co-operative movement enter that sector? Is it, as currently constituted in Britain, able to meet that challenge? What is absolutely clear is that whatever business or service the co-operative movement enters, it needs to enter with confidence and to remain there as a long-term player. Whatever else co-operative businesses are, they are not fly-by-night operations, and that is one thing that we will be keeping firmly in mind over the next few months.

The writer is the general secretary of the TUC. A round-table debate on the future of the co-operative movement will be held on 10 October and the discussion published in a special New Statesman supplement in our issue dated 23 October

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