Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill

Part of the debate – in the House of Commons at 9:51 am on 11th September 2020.

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Photo of Anna McMorrin Anna McMorrin Shadow Minister (International Development) 9:51 am, 11th September 2020

I beg to move, That the Bill be now read a Second time.

May I start by thanking all those present today and extending my gratitude to those who support my Bill and to the Members who are unable to attend because of ongoing shielding responsibilities? I thank the Minister and his officials for the many discussions we have had on this Bill and the consideration they have given it. I also thank my hon. Friend Gareth Thomas for his advice and support. I wish to pay special thanks to my brilliant team—Hannah Buckingham, James Metcalfe, Lauren Kinsey, Mike Ash-Edwards and Charlie Roberts—who have been with me all the way, poring over legislation, dealing with briefings and emails, visiting projects and researching and preparing for this Bill.

Legislation that supports positive social and economic transformation has never been more necessary. I firmly believe that my Bill, the green share Bill, as it is known, has so much to offer. It feels like a lifetime ago that, in January, as a Back Bencher, I was lucky enough to have been selected in the ballot for a private Member’s Bill. It was a significant moment: the opportunity to put forward legislation that has the possibility of going the distance, becoming law and effecting change. The turmoil over the past few months has been difficult, and we know that these difficulties will continue as we navigate our way through this covid crisis. There has never been a more important time for this Bill, which supports positive social, environmental and economic change and helps tackle the climate emergency from the ground up. It is a Bill that delivers that necessary transformation.

Like all Members selected in that ballot, I was inundated with emails asking me to put forward important pieces of legislation. I want to thank all those who inundated me with their brilliant suggestions and idea; this provides a reminder of the scale of change we need to see across this country. The time and circumstances right now are calling for us to be bold; we cannot go back to business as usual. We must create a society that provides the jobs and opportunities of tomorrow and that reduces the inequalities and injustices of today. My green share Bill is an opportunity to do just that. It aims to build a more equitable and sustainable economy, rooted in all our communities and with environmental sustainability at its heart. It unlocks much-needed finance and creates a level playing field for co-operatives.

We are living through a climate emergency. Innovative green projects within our local communities must be at the heart of our rebuild and the fight against runaway climate change. Yesterday’s report by Climate Assembly UK that was presented to the House highlighted that the public want greater choice and competition for green energy and sustainable services. As we look to rebuild communities post covid, innovative and sustainable projects that create green jobs and apprenticeships and that generate cheaper and cleaner energy and more sustainable living environments must be a priority for all.

The Bill empowers our communities and investors to do their part in tackling the climate emergency from the bottom up. If we are to help to tackle climate change, we must legislate to enable our communities to rise to that challenge. Top-down approaches from the UK Government alone are not enough, even if they did not fall woefully short of the radical action required. Too often, we have heard the Government make big announcements, but we do not see the delivery of those promises on the ground. Instead of action, we have seen empty rhetoric and missed targets. Instead of climate action, we have seen abject failure and staggering hypocrisy.

People across this country are demanding change. Research last year by Greener UK and the Climate Coalition found that almost 70% of the British public want urgent political climate action and leadership. When I asked constituents in my constituency of Cardiff North what they wanted to see, the answer was healthier, greener and safer communities. This Government are not delivering. When we have a Government who are still willing to funnel billions into fossil fuel projects, how can we trust them to have our best interests at heart? The gulf between action and empty words is widening daily, and with it, the window of opportunity to make any meaningful difference to our planet is shrinking.

Covid-19 presents a significant fork in that road for the UK Government. Do we continue on a path of limited decarbonisation, missed targets and missed opportunities to future-proof environmental legislation, or do we use this opportunity to take a bold approach to rebuilding a more sustainable, resilient world that transitions away from a fossil-fuel driven economy and embraces serious measures to tackling the climate crisis at all levels? We must step up and begin to put the mechanics in place that are needed to deliver on our binding targets, including the Paris climate agreement, our commitment to keep global warming to a maximum of 1.5°C and the UN sustainable development goals that were adopted by the UK in 2015. Action must start now, and the Bill provides an opportunity fundamentally to transform our communities and do just that.

The Bill provides a way for co-operatives to raise private investment. The maximum threshold that can be raised through fixed term withdrawable shares is currently £100,000. Co-operatives UK said that that is the biggest practical limitation on societies seeking institutional investment, because as a result, co-operatives have less money to invest to innovate and grow their businesses. There is a need to facilitate new capital in co-operatives, without compromising their co-operative nature or members losing control. My Bill would remove the threshold that is holding co-operatives back, while enhancing the economic democracy and accountability that lies at the heart of co-operatives. The new green share would protect the economic democracy at the heart of co-operatives operating a one person, one vote system. The Bill would also safeguard co-operatives from individuals or businesses that seek to liberate—or asset-strip—a legacy asset by demutualising a society and taking over its business for private benefit; that threat would be nullified.

Some may ask about potential loopholes in the Bill. I accept that where there is risk, there are always those who are actively exploring ways to undermine financial law. That is why the Bill protects against tax and fraud loopholes by allowing the Treasury, by regulation, to address such concerns and establish a pilot scheme for the framework. In my correspondence with the Economic Secretary to the Treasury over the last six months, he has been enthusiastic about doing so.

Despite their value to customers and the community, mutuals and co-operatives in the UK are hugely underappreciated. Several barriers prevent co-operatives from growing to their full potential and place them at a disadvantage. Allowing my Bill to progress today would represent parliamentary acknowledgement of the value that co-operatives add to whole sectors and communities, and it would signal our intent to amend existing law, under which co-operatives have one arm tied behind their back. This House should champion, celebrate and recognise what co-operatives have done for the country.

I will provide a little bit of context for the Bill. The co-operative model is a truly British success story and a very successful Welsh story, and it was at the heart of economic renewal in the past. Robert Owen, a prominent Welsh textile manufacturer, was one of the founders of the co-operative movement, and he proposed the creation of “villages of co-operation” as a response to the economic crisis in 1815 at the end of the Napoleonic wars. The first co-operative societies were established in Wales in the early 1840s, among them one started by the Chartists in Pontypridd. The strength of the movement in south Wales was in small valley villages such as Troedyrhiw, New Tredegar and Caerau, which reflected how the coal industry developed. In North Wales, they grew in coal and slate communities such as Leeswood and Llanberis. In mid-Wales, they developed in towns such as Newtown and Welshpool.

Co-operation was about much more than trading; it was a way of life for many. It became a central part of the culture of the local community, similar to that of the chapel. People identified with it and were loyal to their co-operative societies, which became an ingrained way of life. As was said of the Blaina Co-operative Society in 1922, it was

“undoubtedly the biggest thing in the valley outside of the coal industry itself”.

What started as a community model for pooling resources and working as a collective to provide low-priced flour, oatmeal, sugar and butter has grown and inspired the growth of co-operatives across the world. There are roughly 1 billion members of co-operatives worldwide, in more than 100 countries. That is something to be proud of.

In Wales, the feeling of co-operation and belonging has endured. The values of co-operation, fairness and social responsibility are still with us in our communities, and we need to harness and protect those values and strengths. A lesson that we can all learn from co-operatives, as the current health and climate crisis demonstrates, is the potential for renewal and transformation—for keeping up, adapting and tackling the challenging conditions that lie before us.

During this coronavirus crisis, we have seen the spirit of co-operation and community coming to the fore to provide resources to those who most need them. More than £4 million of food and other services have been donated by the Co-operative stores to FareShare for distribution to community food bank and for fundraising. Some 5,000 jobs have been created and targeted at those whose employment has fallen foul of the current crisis. That is just a fraction of the good work that co-operatives have done to support communities, businesses and people. As we face up to the scale of the economic damage caused by the virus, our society must look at the co-operative model as a model of sustainable and ethical economic and social regeneration.

This green share Bill is an acknowledgement of the crucial work that co-operatives do and a recognition of the unlimited possibilities that would be available for people and communities from Cardiff to Canterbury from Manchester to Middlesbrough by unleashing them from these archaic restrictions. Co-operatives can be part of the revival again, whether that is coming out of this covid crisis or addressing the catastrophic climate crisis before us, both of which continue to rage in tandem.

Co-operatives are already leading the way in sustainable business and green projects. The current crisis demonstrates the need for this Parliament to look again at the current restrictive rules and instead put in place legislation that allows them to flourish. We must have economic development, job creation and vital infrastructure built from the ground up, so that we can guarantee economic and social success that works for all.

The Government have been inconsistent in their commitments in England, scrapping a policy to power 1 million homes by community energy in 2017. That is in stark contrast to the Labour Government in Wales, who wholeheartedly support community energy projects and the development of clean energy generation. Since 2010, renewable electricity in Wales has trebled.

Housing associations would also benefit from the legislation in this Bill with capital to retrofit and to build new homes, which again is something that the Labour Government in Wales are spearheading. Millions has been announced for the Welsh innovative housing programme, the optimised retrofit programme and improved quality standards. We need to see that same commitment from this UK Government for England.

Despite the lack of commitment from the Government here, communities and co-operatives continue to press ahead undeterred, because they recognise the value such projects add, but those projects need to be valued and not neglected. Energy co-operatives in the form of renewable or low-carbon energy are now established in all corners of the British Isles.

In March, I visited Awel co-operative wind farm, a joint venture between Awel and Egni in Mynydd y Gwrhyd, south Wales. The wind farm was commissioned in 2017 and has a huge range of local members, including charities, sports clubs and the local arts centre. It really is a community project.

We have Egni Co-op, which was the first solar photovoltaic co-operative in Wales. It is now undertaking the biggest roll-out of rooftop solar in Welsh history. It develops rooftop solar on schools, businesses and community buildings to help reduce their carbon footprint. It has just completed the largest rooftop solar installation in Wales on the Geraint Thomas velodrome in Newport. It has a share offer that has raised £1.3 million so far.

Both projects have the best of co-operative values at their heart, combined with environmental sustainability. They demonstrate a new way of greening our energy network and local economies. Such projects strengthen communities and serve as educational facilities and tourist attractions. They show where community enterprise, private investment and co-operative governance can work together and lead the way.

Both the projects I have visited, alongside others I have spoken to, would really benefit from this green share Bill, but this Bill would also unlock vital finance and help these projects go from strength to strength. Dan McCallum, the director of Awel co-op, strongly supports the Bill. In his words:

“This Bill will really help in terms of unlocking other sources of finance, supporting and strengthening the co-op model. We’ve been amazed at the interest people have shown in renewable energy and co-ops, but any ways of expanding on that and strengthening the model can only be a good thing.”

We face the mammoth task of tackling climate change and transitioning our economy to net zero. It will be particularly challenging to effect climate action at local level, but it is my belief that by allowing co-operatives to expand and bringing the community with them, they can help us rise to that challenge.