Progress | Centre-left Labour politics

The quiet dissenters

Could next month’s Co-operative party conference be its last, asks Greg Rosen

The recent imbroglio, of which the Paul Flowers extravaganza generated the most column inches, is not the first time the British co-operative movement has taken a battering.

At its peak in 1955, there were 30,000 British co-operative retail shops, with a 20 per cent share of the retail food market, 12 per cent of the non-food retail market and 13 million members. But complacency bred decline. Competition from rival shops meant that by 1970 it was down to a 15 per cent share of the retail food market, eight per cent of the retail market overall and the downward trend continued.

The Co-operative party was not unaffected. Its ethos, its raison d’être as a party, was as the consumers’ champion. As its 1960s general secretary, Harold Campbell, had suggested: ‘The Co-operative party advocates the sovereignty of the consumer. It declares that the state should be controlled in the interests of the consumer as a co-operative society is controlled in his interests … The consumer interest is all embracing: any other is a limited interest.’

The image of the Co-operative party could not avoid suffering when a national daily newspaper could describe the average Co-operative shop window as reminiscent of one in a suburb of Kharkov. As co-op revenue suffered, so did the support the movement was able to give the party it had created. By 1984 a reduction in funding meant that the Co-operative party was in deficit and had to economise. Effective management and leadership meant that, within four years, the party was out of deficit, while better management of the co-op retail sector meant that, by the 1990s, co-op shops had gone a long way to restoring their reputation.

By 2012, Britain’s £35.6bn co-operative ‘member-owned’ economy – businesses owned either (like the Co-op) by consumer-members or (like John Lewis) by employee-members – had outperformed the United Kingdom economy for the fourth consecutive year, growing 1.5 per cent in 2011, double the rate for the UK economy overall. While the real level of GDP in the UK in 2011 was 1.7 per cent lower than in 2008, co-operative sector turnover grew 19.5 per cent over that period.

Likewise the Co-operative party was in rude health. Although it declined during 2012 (the most recent figures available), Michael Stephenson’s tenure as general secretary saw Co-op party membership grow over 2009-2011 by an impressive 27 per cent to the highest level in 20 years, while youth membership doubled.

In parliament, too, the picture looked good. In 2012, there were a record 32 Co-operative members of the House of Commons and 19 of the House of Lords, with record representation for Co-operative party members of parliament in the shadow cabinet, on the shadow frontbench and as a proportion of Labour’s parliamentary Labour party.

Moreover, the growing political influence of the Co-operative party was clear. Under Stephenson and his predecessor, Peter Hunt, the party discreetly permeated the last Labour government with its ‘people power’ agenda. With the support of the Co-operative party team of MPs, of whom Ed Balls was by now a leading light, and of sympathetic Labour ministers including Tessa Jowell, manifesto writers Ed Miliband and Patrick Diamond were persuaded by Stephenson to include 24 Co-operative party policies in Labour’s 2010 manifesto, including the remutualisation of Northern Rock, the conversion of English Heritage and British Waterways into co-operatively owned mutuals, support for more co-operative schools and for mutually run rail franchises, housing, Sure Start, energy schemes and football clubs.

Not only that, the success of the Co-operative party in putting the co-operative ideal at the heart of political debate tempted David Cameron, in opposition, to pledge to ‘take the lead in applying the co-operative ideal’, through creating co-operative schools. Words were not backed by action, however. The coalition axed the funding Labour, at the initiative of the Co-operative party, had provided for co-operative schools. Likewise, the coalition betrayed Vince Cable’s former support for remutualising Northern Rock, a pledge Labour adopted in its 2010 manifesto.

This is not the first time that voices in the co-operative movement have questioned whether they should support a political party to bat for them. The delusion that this was unnecessary explains the co-op movement’s decision to reject involvement in founding the Labour party in 1900. It was a costly mistake. The impact of Conservative MPs actively promoting the anti-co-operative agenda of the private retail lobby led the co-operative movement to found the Co-operative party in 1917.

It is on this issue that the resilience of the relationship between the co-op movement and the Co-operative party depends: the extent to which, when the chips are down and the movement is under threat, the party is able to bat for it when others are clearly batting against it. It is thus fortunate that the Co-operative party has never been as strong as it has become over the past decade.

The Co-operative party is the most significant and powerful ally that the co-op movement has. Its annual conference next month provides an opportunity for it to demonstrate this, to speak out effectively in defence of co-ops – to remind the commentators and Conservative politicians who have been all too quick to gloat at the Co-op’s recent misfortunes that the Co-op Bank was not the only bank with problems and that the overwhelming majority of financial institutions that caused the financial crash, and were exposed by the crash as ill-run, were not co-ops at all.

The party’s annual conference will also be an opportunity to showcase the policy thinking that the party has undertaken to build on the work for the 2010 manifesto and prepare for Labour’s manifesto in 2015 – to develop, evolve and strengthen policies that offer clear answers to the concerns of consumers. It would be a tragedy if those opportunities are not seized.

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Greg Rosen is author of Serving the People – Co-operative Party History from Fred Perry to Gordon Brown

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Photo: Co-operative News

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Greg Rosen

is author of Old Labour to New, chair of the Labour History Group and a political columnist for the Scotsman

1 comment

  • Greg Rosen. Could Next month’s Co- operative party conference be the last. This is wishful thinking. Over the years the conservative party was always against the Co-operative party because of their support for the Labour Party. That’s why the Commentators and Conservative Politicians who have been all to quick to gloat at the Co-op’s recent misfortunes. The Co-op Bank was not the only Bank with problems and the overwhelming majority of financial institutions that caused the financial crash in the first place. The present Collation Government still blaming the last Labour Government for the financial crash so that is nothing new the saddest thing is we have a media don’t tell us the truth.

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