With a general election looking likely before the end of the year, Co-operatives UK has launched a campaign encouraging parliamentary candidates to support the sector.
Themed “It’s common sense”, the policy agenda calls on the next government to unleash the potential of the co-operative economy.
It urges action to aim for one million employee and worker owners by 2030, help communities take control of their local economies, support high-impact co-op development, improve the operating environment for co-ops and mutuals and support investment in the sector.
To achieve this, Co-operatives UK suggests measures such as providing funding for local awareness and support programmes, and extending the £3,600 income tax free allowance on bonuses for employees of trust-owned companies, to bonuses paid to members of worker co-ops.
Other steps include earmarking 25% of the new UK Shared Prosperity Fund for community-led economic development or using the next tranche of dormant assets to establish ‘community wealth funds’.
Another proposal is offering corporation tax exemption of a percentage of any surplus that a co-op chooses to pay into an accredited co-operative development institution.
LEPs and combined authorities should also include support for co-op development in their Local Industrial Strategies and ensure they have the funding to make an impact, adds Co-operatives UK.
In terms of legislation, the policy agenda proposes prioritising giving co-ops the option of applying statutory protection to their common, non-distributable capital. At the same time, legislative responsibility for co-ops should be moved from HM Treasury to the Department for Business, says Co-operatives UK.
To support investment in co-ops and mutuals, the trade body advises establishing criteria and a checking process that allows some co-operative societies to benefit from Social Investment Tax Relief; creating a new tax relief that exempts from corporation tax a percentage of any surplus that a co-operative pays into its non-distributable reserves; and supporting the British Business Bank to create a new equity-based impact investment fund that responds to the distinct nature of co-ops and other mutuals.
Co-operatives UK highlights that new co-ops are more resilient that other start-ups and worker control tends to lead to enhanced commercial performance. Furthermore, argues the trade body, co-ops are a proven tool for communities to achieve their economic, environmental and social aspirations.
In spite of the evidence quoted by Co-operatives UK, when it comes to legislation, there is room for improvement. The umbrella organisation points out that incorporation is usually more costly and protracted, while co-op law is dysfunctional and lacks a number of features that members of co-ops would welcome. Other challenges such as banks not responding well to the organisational and legal forms of co-ops, who are also disadvantaged in public and private sector procurement, due diligence and credit scoring.
Co-operatives UK is asking members to share its policy agenda through their networks and email it to their local MP and prospective parliamentary candidates.
