I am delighted to speak in this debate, and I congratulate my hon. Friend Anna McMorrin on her important work on the Bill. As someone who is half-Welsh, I was particularly interested to hear the history of the co-op movement in Wales. That was something I did not know a lot about, so I thank her for her contribution.
The green shares Bill would bring about key legislative changes, which I believe would enhance the contribution of co-operative and community benefit societies, to use investment to generate sustainable and inclusive economic development. We must all do our bit to tackle climate change. Every Member in this place will have visited schools, where our young people push us every day to do more and to be more ambitious on tackling climate change. To achieve that change, there must be provision for green investment and finance, as my hon. Friend says, from the bottom up in our communities.
My right hon. Friend Edward Miliband said yesterday:
“The government’s warm words on climate change desperately need to be matched by deeds worthy of the scale of the challenge we’re facing. We urgently need to transform how we power our homes, move around, and use our land. We also need to ensure that it is a just transition, in which no community is left behind, and we all enjoy the benefits of changing our economy and society for the better.”
We on the Labour Benches are clear that the UK needs a green new deal to kickstart a green recovery from coronavirus.
The UK’s co-ops have a key role to play here, and they have a successful history. They are owned and controlled by 13.7 million members, the equivalent of more than a fifth of our population. As has already been mentioned, they also remain significant employers, with 233,000 people earning their livelihoods directly through co-ops. Co-operatives are resilient; almost three out of four co-op start-ups—72%—still flourish after the difficult first five years of existence. In stark contrast, more than half of all new companies—57%—go to the wall before they reach that milestone.
The co-operative movement has always focused on localism and looking at how to achieve wider societal benefit, and that goes hand in hand with the wider principles of sustainable development and environmental sustainability. We must ensure that the laws are in place for our communities to effect change and create secure green jobs and growth.
The Committee on Climate Change has underlined the importance of creating the conditions for an attractive environment for green investment to achieve net zero greenhouse gas emissions. Its 2019 report stated:
“Government success in providing clear and stable mechanisms that attract sufficient volumes of low-cost capital will be key to the overall success in reaching a net-zero” greenhouse gas target. The committee found that the UK was “well-placed to lead” internationally
“on developing products to finance low-carbon investment”.
This green shares Bill is a rare opportunity to give co-operative and community benefit societies a first-class legal framework. It includes positive changes to society law that would significantly enhance those corporate forms as tools to build the more sustainable and inclusive economy we urgently need.
As my hon. Friend the Member for Cardiff North mentioned, the Bill would make important changes to allow co-operatives and community benefit societies to gain powers to raise finance by issuing shares. That new finance would have to be invested in environmentally sustainable projects. The Bill seeks to introduce safeguards to prevent any share issue from leading to a co-op’s conversion into a commercial company. It also specifies arrangements about the distribution of capital in the event of winding up, again to protect the mutual purpose.
Ethstat Ethical Stationery in Croydon is a co-operative, run by the people who work for it and owned by the people who use it. It is a brilliant organisation, which is locally based and works at the cutting edge of sustainability. Its profits go to projects that help some of Croydon’s most vulnerable people. All its projects sit alongside its core work of protecting the environment.
Such businesses are the cornerstones of the UK’s social economy and have huge potential to deliver sustainable and inclusive economic development. Across south London, organisations such as South East London Community Energy and Repowering are playing a key role. We can go further and look to other parts of the country. For example, Plymouth has more than 30 energy co-ops, which are providing sustainable energy and local employment and using their surplus to generate community good.
The Bill would provide much-needed finance to help in our housing sector, where we know there are huge issues with our homes and, for example, retrofitting. Our homes are some of the most inefficient and therefore the most expensive to heat in Europe.