With Liz Truss moving in to No.10 and the energy crisis mounting, Co-operatives UK and the Co-op Party have joined the national chorus calling for action to help householders and businesses weather the storm.
Co-operatives UK, the apex body for the UK’s 7,000 independent co-ops, reports that 25% of businesses in the sector are concerned for their survival over the next 12 months, with 5% approaching such a crisis point that they could cease operating within the next three months.
With the leadership question resolved, the government is now reportedly planning measures to support the public and businesses, including a freeze on domestic energy bills and a £40bn funding package for businesses. Co-operatives UK is lobbying the government to ensure that co-ops and community businesses are included in this.
Policy and development lead James Wright said: “The new prime minister must act immediately to support households and businesses. Our latest data adds to evidence that to do otherwise risks a ‘doom-loop’ of destitution, corporate insolvency, high unemployment and wasted potential.”
Co-operatives UK is writing to Truss to ensure that the co-op sector is “fully included and effectively supported in any action for businesses, along with all other social enterprise, community businesses and charities affected by the energy price shock”, said Wright, adding: “Our members are particularly calling for action to limit prices for non-domestic energy customers.”
Co-operatives UK surveyed its members and found that:
- Half of responding co-operatives, which together employ more than 85,000 people, are severely impacted
- 25% are concerned about their survival in the next 12 months
- 5% are concerned about their survival in the next three months
- 28% of co-operatives find their ability to create value for members/customers/communities in a financially sustainable way is severely undermined
The ability and potential of these businesses to create and sustain decent livelihoods, expand opportunity and benefit communities across the UK, is jeopardised.
“Co-operatives are an essential part of the social economy our communities rely on in hard times,” said Wright. “Of the co-operatives who tell us they are severely affected, 60% are currently active in the mutual aid response to the social emergency and are looking to ramp up such activities over the winter, subject to their own financial sustainability.
“What’s more, co-operatives offer excellent prospects for growing a stronger, fairer, greener UK economy. We cannot afford to lose these co-operatives now. The new prime minister must take immediate and effective action to prevent permanent damage to businesses, including co-operatives.”
The Co-op Party has also called for action on energy bills and other economic pressures. General sectetary Joe Fortune said: “Today, as Liz Truss becomes the new Conservative leader and the next prime minister, we in the Co-operative Party are clear about the changes she must make in both the short and long term.
“Our movement and Party are alive with ideas which will give our country a better future. Over the coming months and years, we must campaign for those ideas and the movement we represent with even more zeal and energy.“
He called on the government to tackle the energy crisis, with “urgent action to prevent households and businesses facing unpayable bills come October”.
In the longer term, “actions must include reforming the ownership of our energy system at every level, supercharging retrofitting to make our homes and businesses more energy efficient, and creating hundreds of thousands of new owners of community energy generation schemes so that our country benefits from fair and clean energy production.”
Fortune also urged action on the wider cost of living crisis, with “more support for co-operative and community-based measures to deliver food justice, increasing emergency support such as the Household Support Fund”.
He want the government to “unleash the co-operative economy”, offering “a fairer, more resilient way of doing business – especially in turbulent economic times”.
Reiterating the Party’s goal of doubling the size of the co-operative economy, Fortune suggested measures such as “increasing co-operative development capacity, reforming legislation holding co-operatives back, and creating new capital raising instruments for co-operatives and new mutual guarantee societies to support SME lending”.
He also urged the government to support community ownership as a means of “tackling inequality, generating and keeping wealth locally, and taking ownership of the places, spaces and decisions that matter to them” through measures such as a local buy-out fund and the devolution of levelling up funds “so that communities don’t need to go cap in hand to Westminster”.
The Party also made a call for a fairer financial system. “This must involve steps to protect vulnerable consumers such as tackling exploitative ‘buy now, pay later’ providers by facilitating the growth of not-for-profit micro-loan providers and facilitating the growth of credit unions by extending the common bond, and a duty to provide access to cash.
“We must ensure the wider financial system reflects our values too, from supporting the development of regional banks to ensuring huge multinational businesses pay their fair share of tax.”
