The Co-operative Economy

1. Questions to the First Minister – in the Senedd at on 30 January 2024.

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Photo of Vikki Howells Vikki Howells Labour


4. What action is the Welsh Government taking to grow the co-operative economy? OQ60628

Photo of Mark Drakeford Mark Drakeford Labour 2:03, 30 January 2024

Llywydd, I thank Vikki Howells for that. Social enterprises and community-led co-operatives are an important part of the social and economic landscape in Wales. Dedicated support to help grow the sector is available through Business Wales, Social Business Wales and the Development Bank of Wales.

Photo of Vikki Howells Vikki Howells Labour

Diolch, First Minister. Last week I chaired a round-table discussion of a new report on the purpose of mutual and co-operative business in society. The report highlighted, for example, that the UK mutual and co-operative economy in 2022 had combined annual revenues of just under £88 billion, or 3.5 per cent of gross domestic product. I know that the Welsh Government is already well on its way to meeting its goal of doubling the number of co-operative businesses in Wales this term. One recommendation in the report calls on policy teams across Government to consider the benefits that co-operatives and mutuals bring to the economy. So, how is Welsh Government embedding this within its economic strategy?

Photo of Mark Drakeford Mark Drakeford Labour 2:04, 30 January 2024

I thank Vikki Howells for drawing attention to the report. It is an excellent report, if colleagues haven't had a chance to read it. What I think brings the report to life are the case studies that are contained right through it, which show the way in which co-operative and mutual ways of providing services are to be found not directly in the economy field alone, as Vikki Howells says, but can do much to assist right across the responsibilities that are exercised in this Senedd.

The case study that is from Wales in the report is of the Principality Building Society, of course itself a mutual organisation, and its partnership with the Pobl Group, looking to make sure that housing in Wales has a better chance of being able to meet the climate change obligations that we know lie there for us today and in the future. But that's not the only example, by any means, here in Wales. If you look across the range of things that are the responsibility of the Welsh Government, in social care many colleagues here will know about Solva Care, which has won many awards. There's the Friends United Together co-operative in Swansea, a co-operative people with learning disabilities. In the education field, we've had a supply teacher co-operative helping to make sure that schools get the assistance that they need when they need to use people from the supply lists. The Calon Wen organic milk co-operative in Narberth is another example of a co-operative. We've got co-operatives in the food industry, in arts, in business. I think the report makes the point powerfully, but I also think that we can demonstrate here in Wales that we are using that co-operative model, of course, in the economy department, but making sure that, right across the Welsh Government, its advantages are known and implemented.

Photo of Paul Davies Paul Davies Conservative 2:06, 30 January 2024

First Minister, we've seen a number of well-loved establishments in Pembrokeshire, such as pubs and shops, being transferred from private businesses to co-operative models of operating over the last few years. Two of the most recent are pubs such as Crymych Arms in Crymych and Tafarn y Cross in Hayscastle Cross, which also received financial support from the UK Government. I know, too, that the Welsh Government is supportive of these assets being taken over in this way for the benefit of the community. I'm sure you'll agree with me that what is vital is ensuring as many volunteers as possible can come forward to support such co-operatives and to make them hugely successful. Given the importance of volunteers, can you tell us what the Welsh Government is doing to help promote the importance of these community assets so that as many volunteers as possible come forward to support such ventures? Can you also tell us what is the Welsh Government doing to support community organisations who have helped facilitate such ventures to become co-operatives in the first place?

Photo of Mark Drakeford Mark Drakeford Labour 2:07, 30 January 2024

Llywydd, I thank Paul Davies for both of those points. It's only a few weeks ago that I was with his colleague Darren Millar in a community-run shop in his constituency, and the person we met, who is the person in charge of it, said to me very directly, 'I'm not the important person here, it's the volunteers that allow this shop to continue to offer the service that it does to this local community.' So, I absolutely understand the point that Paul Davies is making, Llywydd, and, of course, here in Wales we're lucky enough to have a robust infrastructure for volunteering. We have not only the Wales Council for Voluntary Action, which takes that Wales-wide view of supporting volunteers, but we have county voluntary councils that adapt those policies and those grant possibilities to the needs of local communities. They do that not just in supporting volunteering and encouraging people to come forward for that, but they also support community organisations themselves. So, I entirely endorse the points that the Member has made, Llywydd, and I believe that in Wales we are particularly well placed, not simply because we are a nation of volunteers—a higher percentage of people volunteer in Wales than any other part of the United Kingdom—but we also have the infrastructure in place to support them in doing so.

Photo of Luke Fletcher Luke Fletcher Plaid Cymru 2:09, 30 January 2024

Of course, the very idea of co-operatives isn't something that's a foreign concept to Wales. The very idea started in Wales, so it's important that we lead the way into the future. Now, back in October I raised with the First Minister the untapped potential of the sector here in Wales, because, at the end of the day, it does make up 0.6 per cent of Welsh GDP. If we want to see an increase in that figure, of course, increasing the number of co-operatives operating is important, but also, as well, looking at the sizes of those co-operatives and looking at opportunities in other industries where we might be able to grow sizeable co-operatives in the same way in which they've done in Mondragón in the Basque Country. So, my question is: how will the Welsh Government not just look at increasing the numbers of co-operatives, but also look at scaling up the size of those co-operatives as well, so that they deliver the levels of growth we want to see, but also, as well, the good-quality jobs that we know they can?

Photo of Mark Drakeford Mark Drakeford Labour 2:10, 30 January 2024

The Robert Owen co-operatives were on a significant scale, weren’t they? New Lanark was a whole town devoted to the co-operative way of doing things. I was asked a question, as the Member said, earlier in the year about employee-owned businesses becoming co-operatives in Wales and I was able to say to him then that we were making very good progress towards our target on it, and, in fact, that pace has accelerated since I answered that question: 70 employee-owned businesses now in Wales, three more in the legal stage of the transition process and a further five new enquiries now being taken through the process you need to go through to become an employee-owned co-operative.

I remember being told in Mondragón, when I was there, that they hadn’t succeeded in persuading people in the two valleys either side of them to adopt the model, so we shouldn’t beat ourselves up too much in Wales if we haven’t done as much as they had managed. But there are lessons from other parts of the world, and from those large-scale co-operatives, because we do now have some genuinely large-scale employee-owned businesses here in Wales, and our aim always is to assist businesses on that journey, so that they stay rooted here in Wales and use their capacity for growth to go on making that contribution to the wider Welsh economy.