Far from being shattered, the Co-operative movement is doing better than ever

By Kieron Merrett / @kieronam

Carl Rowlands has a theory that the Co-operative movement was “effectively destroyed” in the 1980s, and what remains is being “propelled by a neo-liberal tidal wave.”

He is utterly wrong. But why is it that a Labour Party member like him has so completely misunderstood what the Co-operative Party and the wider movement stand for?

There is a perception amongst some, especially on the left, that the Co-operative movement is somehow all about reforming the public sector. Rowlands is right to say that, whilst many at the top of the Labour Party are also Co-operative Party members, they have been most publicly enthusiastic about using co-operative values in public services. Labour in power did a lot for co-operatives and mutuals, but it did not ultimately support some of our highest-profile campaigns, such as the one to re-mutualise Northern Rock.

He is also right to raise the ‘why now?’ question. Lambeth Council, for example, plans to become the first Co-operative Council, and there are some good ideas in this. This was planned long before we knew about the government’s cuts to local government. But now they are happening together, and the council has been tempted into using the rhetoric of one to help promote the other. It’s no longer just about doing things better using co-operative values, but also about doing more for less. That does make it more difficult for us to explain why it’s not the same as the Big Society.

So there is a danger that the co-operative movement can be seen as part of the right – a movement to reform and even shrink the state. In some cases, there are some good arguments for using co-operative values in public services, and that work should continue. But we urgently need to distance ourselves from the Big Society, and the best way to do that is to emphasise what we have done on the other side. It is as an alternative to private enterprise, not to public services, where co-ops have the longest and proudest tradition of making people’s lives better.

And this is where Rowlands’ article really misses the point. The Co-operative Group, which he mentions, is driven by “the richness of its values and ethos,” not by the profit motive like many of its competitors. Those values are enforced in practice not just by the active members – and he may well be right that there is a need to organise these better, across the whole mutual sector – but also by the legal structure and, most importantly, the culture of the organisation itself.

It is no coincidence that, in retail finance for example, mutuals outstrip private-sector institutions in terms of customer satisfaction and value for money. Co-operative Financial Services was also recently named the ‘world’s most sustainable bank.’ It turns out that when these outcomes are the whole reason for the organisation’s existence, we get better results than if the organisation is only pursuing them to turn a profit.

Nor is it a coincidence that mutuals wade in where private enterprise fears to tread. Whilst politicians have fretted in recent years about financial inclusion, Building Societies have existed to serve low-income communities since 1775. The majority of Child Trust Funds were provided by members of the Association of Financial Mutuals, not by the private sector. And financial mutuals are found based in communities all over the country, not just in the ‘big money centres.’

Far from being “shattered,” the Co-operative movement is doing all this better than ever. The financial and economic crises have rammed it home, for those who weren’t already convinced, that the private sector and the profit motive aren’t always going to deliver the best outcomes for people. People deliver the best outcomes for people. That is why Carl Rowlands is wrong. And that is the message that will distinguish the Co-operative movement from the Big Society.