‘The budget give Labour an opportunity to unleash grassroots growth through co-operation’

In his speech to this year’s Labour Conference, the Prime Minister spoke of the need to “grow our economy from the grassroots”. He was clear that growth for growth’s sake isn’t enough, the kind of growth we stimulate – where it comes from and who benefits – is as important as the growth itself. Growth felt in communities, felt by local people, is the only kind of growth that will truly transform our country and give everyone a stake in its future.

The co-operative movement has always met this test.

Co-operatives are rooted in their communities, owned by members rather than distant shareholders, driven by social purpose and impact. They are the drivers of grassroots growth, providing the kind of wealth that reinvests back in communities and is experienced in tangible ways by local people. 

READ MORE: Budget: Almost all Labour members back levies on gambling and banking sector

The Budget is an opportunity to recognise their value and secure their contribution to our growth mission. That’s why, as Chair of the Co-operative Party, I will be hoping for four key themes from tomorrow:

Business support for new co-operatives

The government has a world-leading commitment to double the size of the co-operative and mutual sector. It’s a commitment that we hope will put right a longstanding wrong – the fact that the co-operative model was born here in the UK and yet, almost two centuries later, the size and scale of our sector lags behind many other countries around the world. This disparity in progress hasn’t happened by accident – co-operatives in this country are forced to operate under outdated legislation, in an unhelpful regulatory environment and without any tailored business support. If we are to double the size of the sector, these are the fundamental building blocks of growth that will need to be addressed.

Subscribe here to our daily newsletter roundup of Labour news, analysis and comment– and follow us on Bluesky, WhatsApp, X and Facebook.

The Budget could make progress in this area. The evidence is clear that co-operatives are more resilient, productive and long-lasting than other business models, and yet the state has historically done very little to boost the model. Business Secretary Peter Kyle, speaking at the Co-operative Party’s annual conference last weekend, announced that a condition of funding for Growth Hubs in England, which offer business support at a regional level, will be their support for alternative business models including co-operatives and mutuals. This is a hugely important step forward. Another key step would be the introduction of tailored support and funding for these business models. We rightly spend many millions of pounds annually on business support, but nothing to specifically encourage co-op growth. 

Reform of credit union common bond

Credit unions are community-driven organisations, doing vital work around the country to provide fair financial services to those who need them most. An alternative to big banks, credit unions are owned by their members  and prioritise financial wellbeing, fair interest rates and lower fees. And in an age where so many highstreet bank branches are closing their doors, credit unions rooted in their communities are in many places the last ones standing.

But like other co-operatives and mutuals, credit unions face countless barriers in growing their reach and impact. Legislation from the 1970s requires credit union members to share a common bond, but the government last year rightly launched a call for evidence to ask whether this structure is still appropriate for a modern economy. Many credit unions feel that reforming will give them a better opportunity to attract members from different geographies and communities, boosting the growth of the sector and the pools of people able to share in its benefits. The Budget should therefore seek to move forward these reforms and offer credit unions the best possible opportunities to grow. 

Co-operative Development Unit

Doubling the size of the co-operative economy won’t happen by accident, it needs support and coordination. The government’s Pride in Place strategy announced a new Co-operative Development Unit, sitting in the Ministry of Housing, Communities and Local Government, set up to support our ambition for sector growth. It will be the first unit of its kind, but it must be set up to succeed.

In particular, given the department in which the Unit sits, government should work with it to increase support for community ownership. We will soon have a new Community Right to Buy enshrined in law, giving community groups the first right of refusal when valued community assets are up for sale. This right could be transformational, breathing new life into abandoned or neglected community spaces and giving local people a route to ownership of the places they love. But for this new right to realise its full potential, there must be a package of support sitting alongside it. A right to buy is useless unless people can actually use it, and so the Budget should enable the development of a support package for the Co-operative Development Unit to provide the resources, advice and expertise communities will need. 

Support for high streets 

There are few more visceral symbols of fifteen years of Conservative neglect than high streets across the country. Boarded up shops, corrosive antisocial behaviour and flatlining footfall have become the norm in too many places, with communities paying the price. The fate of high streets should be central to conversations about grassroots growth and ensuring that all parts of the country benefit. At their best, high streets can be stimulants of local growth, providing good jobs and accessible local services. But they can also be vital to building strong, cohesive communities, providing the opportunities for shared experiences and social connection that have been missing from too many places. 

Share your thoughts. Contribute on this story or tell your own by writing to our Editor. The best letters every week will be published on the site. Find out how to get your letter published.

And so the Budget must take account of the needs and opportunities on our high streets. Along with new creative business support for different kinds of business, retailers like the Co-op Group, the UK’s largest member-owned co-operative, have warned that reforms to business rates will need to serve small high street retailers if they are to survive. Without small shops like these, high streets will be even emptier and their revival will be more complex still. 

When it comes to high streets, we need to be moving forward, not backwards. The Budget must seize the opportunity to build thriving high streets for the future, not serve any further decline.

• • SHARE: If you have anything to share that we should be looking into or publishing about this story – or any other topic involving Labour– contact us (strictly anonymously if you wish) at [email protected].
  • SUBSCRIBE: Sign up to LabourList’s morning email here for the best briefing on everything Labour, every weekday morning.
  • DONATE: If you value our work, please chip in a few pounds a week and become one of our supporters, helping sustain and expand our coverage.
  • PARTNER: If you or your organisation might be interested in partnering with us on sponsored events or projects, email [email protected].
  • ADVERTISE: If your organisation would like to advertise or run sponsored pieces on LabourList‘s daily newsletter or website, contact our exclusive ad partners Total Politics at [email protected].