Cooperatives could be the way forward

A belief that small- and medium-sized businesses, just like the many family firms here in Lincolnshire, are the backbone of Britain’s economy informs all I do.

Nonetheless, I was delighted to learn that the John Lewis partnership would be rebranding.

In a wonderful, voluntary change, John Lewis will now be renamed John Lewis and Partners, whilst Waitrose will henceforth be called Waitrose and Partners.

I recognise that for some these will seem like an insignificant additions, but for the 83,000 men and women who work for the company, the change is a powerful recognition of their status as partners at their place of work – each as important as the other. The new tagline: ‘For us, it’s personal’ couldn’t be more fitting.

John Lewis Partnership is a successful example of a cooperative business and could and should be the catalyst for a flurry of growth in cooperatives, mutuals and guilds that can reshape and reform our economic system.

While the tradition of economic cooperation and local unity can be traced back far further, the first recognised cooperative in Britain was established in 1833 by the Rochdale Society of Equitable Pioneers – 28 men and women who combined their resources to open a shop.

Cooperatives are businesses owned and controlled by their members - often staff, suppliers, customers or local residents - and there are numerous ways in which they are different from and superior to huge soulless corporates.

Fundamentally, cooperatives act in the interest of their members, rather than for remote shareholders or venture capitalists. All profit is controlled by the members and partners, who are given the opportunity to decide if it is to be distributed amongst them, reinvested in the business or given to the community.

Numerous studies have demonstrated that those who work for cooperatives feel a far greater sense of connection and commitment to their jobs, manifested in increased productivity and better staff retention. As it’s in everyone’s interest to pull in the same direction, an adversarial relationship between ‘bosses and ‘workers’ is largely eliminated.

Business in this form, like small family firms, allows disadvantaged members of the community to find a route back into the workplace. Applying to an organisation which values deeper interpersonal relationships, rather than the cold, arid calculations often used by recruiters in global big-business, gives more people more chances. This, in turn, allows cooperative businesses to create meaningful relationships with their customers. After all, it’s their communities that benefit from an ownership structure that keeps capital reinvested locally, not exploited or outsourced to faceless corporate chains. Indeed, research by the Social Economy Alliance has also found a clear preference among consumers for community-owned businesses which reinvest profits.

Its clear cooperatives are viable and on the increase – with the 29,000 cooperatives worldwide represented in almost every sector of employment imaginable and increasing their global share of the market from 23 per cent to 27 per cent since the financial crash of 2007.

Football offers a particularly compelling comparison between business models. Whilst billionaire tycoons cast aside the history of ancient British clubs with a wave of their all-powerful cheque books, German fan-owned clubs are delivering highly successful outcomes. Bayern Munich is 84 per cent owned by its fans - it has no debt, guards its traditions fiercely and delivers ticket prices five times lower than the Premier League average.

Though cooperatives are excellent and effective, there are not nearly enough of them. This is partly to do with a lack of awareness of their potential. A good way to change this would be the creation of a recognised trademark, similar to ‘Fair Trade’, by which consumers can recognise a cooperative or independent business before purchasing goods and services.

Moreover, the Government could give the private sector an additional nudge, by giving priority to SMEs, cooperatives, mutuals and guilds in public sector procurement and offer meaningful tax breaks and financial incentives to new start-up businesses that choose the cooperative model.

For years, I have warned my party that it must not allow itself to sleepwalk towards becoming a mouthpiece for globalist corporate business. Whilst the post-crash vision of economics set out by Jeremy Corbyn at last week’s Labour conference is ultimately flawed, it was, for many, compelling.

His critics must draw a legislative distinction between predators and producers and so devise a policy programme that is ambitious in its determination to restore and return Britain’s economy to the communities it exists to serve.

Cooperatives, along with independent small firms, can be the cornerstone of the nation’s economic renewal.