The final item of business is a members’ business debate on motion S4M-01683, in the name of Helen Eadie, on celebrating the value of co-operatives internationally. The debate will be concluded without any question being put.
Motion debated,
That the Parliament congratulates the UN General Assembly on declaring 2012 as the International Year of Cooperatives; welcomes the UN’s efforts to raise public awareness of what it considers to be the invaluable contributions of these enterprises to poverty reduction, employment generation and social integration; understands that they have over one billion people members around the world; acknowledges their role in Cowdenbeath and across Scotland in a range of sectors including community retail, housing, agriculture and energy; understands that there are 473 in Scotland with a combined turnover of £3.4 billion, and applauds the role of Co-operative Development Scotland in supporting their development in Scotland.
17:07
I am delighted to lead this debate. We are in a time of financial difficulty, and there is perhaps no better time to examine the great work that co-ops and credit unions do.
For the avoidance of doubt, I refer members to my entry in the register of members’ interests, where I make the voluntary declaration that I am a member of the Co-operative Party. I am privileged to be serving a term as chair of the Co-operative group in the Scottish Parliament and I thank my colleagues for supporting me in that office.
Tonight we celebrate the designation of 2012 by the United Nations as the international year of co-operatives. Last year, global leaders and the co-operative movement marked the 250th anniversary of the founding of the world’s first co-operative for which records are held, the Fenwick Weavers Society—a proud claim indeed for Scotland.
There are areas of my life as a parliamentarian that mean a lot to me, one of which is my work with Bulgaria. Last year I was delighted to visit the first co-operative to be established in Bulgaria—a wine co-op that was formed by farmers in Suhindol municipality.
Members also know me for my work in connection with Remploy and supported businesses in general. I ask most earnestly that the Government make a special effort to help Remploy workers in Scotland. I know that the issue is reserved to Westminster, but disabled people and their futures are not a reserved issue. The writing is on the wall for Remploy workers. I know the difference that ministerial involvement can make—in some circles it is known as ministerial magic dust. We need a minister to champion and take forward a plan to reshape Scotland’s Remploy factories into community-owned co-operatives. We need a pioneer for a way forward, who can show Westminster that co-operatives are something at which we Scots excel, and who will let all disabled workers who have lost heart know that we care and intend to make a difference for them.
According to the “Global300 Report 2011”, in 2008 the world’s 300 largest co-operatives generated revenues of $1.6 trillion, which is comparable to the gross domestic product of the world’s ninth largest economy.
The co-op model is on track to become the fastest growing business model by 2020. Co-ops are huge business. They operate in sectors ranging from banking, credit, housing and health to retail, food, utilities and agriculture. Even funeral parlours are led by co-operatives. Co-operatives are owned by nearly 1 billion people across the globe and employ nearly 100 million people, which is 20 per cent more than multinational enterprises.
Co-operatives promote the fullest possible participation in economic and social development. They innovate to meet the needs of their members and, because members ask for new products or services, co-ops sometimes offer such products or services before competing businesses do.
As well as being widely recognised for their ethical business practices, co-operatives are a vital part of the British economy, employing more than 235,000 people, turning over more than £33 billion a year and generating a significant amount of wealth for the country. Co-operative businesses are already outperforming the United Kingdom economy and have grown by 20 per cent since the start of the credit crunch.
This is an area of policy for which there is now recognised cross-party support. That has not always been the case. In 1979, one of the first things that Margaret Thatcher did was stop the work of the then Co-operative Development Agency, which had been established by the Labour Government. Thankfully, under Labour the Scottish Government established a Scottish co-op development agency. That was very much down to the work spearheaded by our Co-op group of MSPs, especially my party’s new leader, Johann Lamont, in partnership with Cathy Jamieson, who is now a member of the Westminster Parliament. The current Scottish National Party Government has supported the continuation of that work.
I pay tribute to all those involved in supporting Co-operative Development Scotland. Our approach is being observed by other nations, as they reflect on the contribution of co-operative models to their economic future. Within the UK, Wales and Ireland are replicating Scotland’s approach. Over the past year, nations such as South Africa, Bahrain and Mongolia have consulted CDS.
On a positive note, it appears that the Conservative and Liberal-Democrat coalition Government is moving towards much better support for co-ops in the UK. In January, Prime Minister David Cameron spoke in London about responsible capitalism and announced a new co-operatives act to consolidate existing laws.
The Co-operative Party has activists and MPs at Westminster, who were responsible for championing and securing much of the legislation that is to be consolidated. It was a shame that Mr Cameron did not acknowledge the vital role that the Co-op Party has played in modernising the laws governing co-operatives. Acts drafted and assisted through Parliament by the Co-operative Party include: the Industrial and Provident Societies Act 2002; the Co-operatives and Community Benefit Societies Act 2003; the Climate Change and Sustainable Energy Act 2006; and the Co-operative and Community Benefit Societies and Credit Unions Act 2010.
While there were no announcements of new policies on co-operatives in his speech, David Cameron signalled that he supports co-operative businesses as part of a range of business models in a free market.
I was a founder member of Gumboots community nursery in Southwark in London, which still exists, and a member of a cleaners co-op in Kennington and a reproduction furniture co-op in Fife. To me, the attraction of co-ops is the fact that there are many ways to shape them—from workers co-ops to community co-ops—to offer people opportunities. In Scotland, we have many co-ops—too many to mention individually.
Workers co-ops have been shown to beat the credit crisis. Statistical assessment and surveys show that worker co-ops have been more resilient than conventional enterprises in withstanding the economic crisis. In this day and age, when we have become so distrustful of the banking sector and capitalism, we may do well to think of the option of credit unions. A credit union is a member-owned financial co-operative, democratically controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members. Unlike many banks these days, it has both local staff and a local office. Many credit unions also provide services that are intended to support community development or sustainable international development at a local level, and they could be considered community development financial institutions.
Worldwide, credit union systems vary significantly in terms of total assets and average institution size. They range from volunteer operations with a handful of members to institutions with several billion dollars of assets and hundreds of thousands of members. Even the White House in Washington, home to Barack Obama, boasts its own credit union. In Edinburgh, we have Capital Credit Union, and all MSPs and Scottish Parliament staff are encouraged to become members. In Fife, we have several credit unions, including those in Cowdenbeath, Rosyth, Ballingry and Lochgelly, and they are all happy to recruit new members.
I hope that members agree that I have risen to speak and lead this evening’s debate with real enthusiasm for all forms of co-ops and credit unions. I hope that we will get some real support from members throughout the chamber for these modern institutions that owe a great deal to the past but perhaps also point the way to a better future.
I would be grateful if you would draw to a close, please.
Co-operation and mutuality are an idea whose time has come back. In the year when the whole world celebrates the co-operative model, we should look at every possible way in which to put co-operatives on a level playing field with other forms of business. At a time when poverty is still too prevalent in Scotland and unemployment too high, as parliamentarians, every breath that we take and every move that we make should be about assisting our people to develop whatever sort of co-op they wish to make.
I would be grateful if you would come to a close, please.
I am grateful to have had this chance to speak this evening. Thank you, Presiding Officer.
17:17
It is with great pleasure that I speak in this debate as a member of the Labour and Co-operative group of MSPs. I congratulate Helen Eadie on bringing her motion to the chamber for debate and I strongly welcome the efforts by the United Nations to raise public awareness of the issue globally, including in Scotland. I also congratulate Scotmid—I believe that Ian Miller is in the public gallery tonight—on being at the heart of Scottish communities for more than 150 years.
In my speech, I will highlight producer co-operatives. Broadfield, in my region of South Scotland, is an organic farm that is a member of a countrywide co-operative of organic dairy farmers. That enables collective power in bargaining and also sharing of good practice. Such models are important, not least in relation to the power of supermarkets and the stranglehold that they often have on producers.
Internationally, producer co-operatives have given power to growers and, increasingly, to women. There is often a fair-trade element, which brings additional benefits in addressing food security, population growth, climate change, women’s empowerment and high commodity prices. Jennipher Wattaka, a member of a co-operative of women coffee growers in Uganda that is supported by Equal Exchange, tells us about the Gumutindo Coffee Cooperative Ltd. I hope that I pronounced that right. She says:
“Gumutindo means quality. We were asked to join and benefit as fair trade producers. We immediately joined without hesitation and have not looked back. I take pride in myself being a member of a co-operative that revived the spirit of working together on Mt Elgon.”
As a member of the cross-party group on Malawi, I know that there are ways in which we can support co-operatives there as part of Scotland’s on-going relationship with that country. Women farmers in Malawi speak about how farmers, organisations, working collectively and often as co-ops, are using their power to break down material barriers; to enable better access to important extension services, credit and inputs; and to enable better access to agricultural markets. They are also offering women greater opportunities to engage in leadership positions in the public sphere.
In a different sector, the ways in which we generate our energy globally is a power issue in more than the literal sense of the word. The Bangladesh rural electrification programme dates back to 1977. More than 70 co-operatives, or Palli Bidyut Samities, reach over 25 million people as customers. Typical household incomes have increased by 16 per cent, infant mortality has fallen, enhanced employment opportunities have resulted in people migrating to villages that have power, and a variety of new industries have developed.
Although I whole-heartedly support small co-ops, I have to wonder how the myth developed that co-ops have to be small-scale. It certainly did not develop in Bangladesh or, indeed, in Spain’s Basque Country, where the Mondragon Corporation was founded long ago in the town of the same name. Although its origin is linked to the activities of a modest technical college and a small workshop producing paraffin heaters, the corporation is currently the seventh-largest Spanish company.
Here in Scotland, energy could be in people’s hands more. Members will be keenly aware from a previous members’ business debate and our—mostly virtual—mailbags of concerns, of landscape capacity with regard to onshore wind generation. Although that issue must be addressed, there are also concerns about ownership. I am still waiting to meet the minister with responsibility for energy matters, Fergus Ewing, to discuss maximising opportunities for communities to retain ownership of larger-scale projects through the use of co-operative models. Now that the Government’s community and renewable energy scheme is under review, the issue has become very urgent.
I would be grateful if you could draw to a close.
I will, Presiding Officer.
In Scotland and internationally, co-operatives build a better world. In this country, we must do all that we can to facilitate their birth and development as well as to support them internationally. I know that MSPs across the chamber will do so. We wish co-operatives well for the future.
17:21
I welcome the debate and congratulate Helen Eadie on bringing it to the chamber. I also endorse her comments about Remploy.
I support the motion with pride. As Helen Eadie pointed out, last year saw the 250th anniversary of the establishment in Ayrshire of the Fenwick Weavers Society, which was one of the very first worldwide co-operatives. It set fair prices for yarn and completed products and eventually started to buy and sell food, which funded charitable work with the local library and an emigration society.
Co-operatives, be they consumer co-operatives—the so-called “sosh”—worker co-operatives or community co-operatives, are a critical component not just of the Scottish economy but of the world economy. They are autonomous associations of persons who unite voluntarily to meet their common economic, social and cultural aims and aspirations through a jointly owned and democratically controlled enterprise or association. They are, indeed, a beacon of shared partnership and should be promoted as such.
As the motion points out, there are 473 co-ops
“in Scotland with a combined turnover of £3.4 billion”.
They employ nearly 30,000 people and their survival rate is 80 per cent better than equity investor-owned companies. In the UK, there are 5,450 profitable co-operative organisations with an aggregate turnover of £33.2 billion and they are present in all sectors, including the public sector. Worldwide, they account for more than 100 million jobs, which is 20 per cent more than multinational companies. They stand for shared endeavours, shared work, shared assets and shared returns. It can be no accident that in the four fastest-growing countries in the world—Brazil, Russia, India and China—co-ops outnumber shareholder-owned companies by four to one.
Because of the overall stakeholder interest, co-ops are productive. Participation, both physical and financial, lays the foundation for resilience, productivity and growth.
Will the member give way?
I am sorry—I have only four minutes.
Do we honestly believe that the massive public bailout of the banks would have been necessary or that the banks would have descended to the position they ended up in if the values of shared stakeholder interests had been recognised and if employees and customers had been more involved in scrutiny of their activities? The International Labour Organization, the International Co-operative Alliance, industry academics, the European Parliament with its agenda for change and even Nick Clegg, in one of his more lucid moments, have recognised the importance, value and contribution of co-operatives.
In my previous life as a company turnaround specialist and troubleshooter, there was one case in which—although I was not quite able to develop a co-op—I ensured that the employees held shares in their company. They managed to turn the company around successfully, and when they transfer their shares back to the company they will enjoy some form of pensionable arrangement.
Sometimes marriages can be difficult, but a real and strong marriage between capital and labour should be everlasting, and should strengthen the global, UK and Scottish economies. I am happy to support the motion.
17:25
It gives me great pleasure as one of the co-conveners of the cross-party group on co-operatives to speak in the debate. I congratulate Helen Eadie on bringing the debate to the chamber, and on her speech, which emphasised her strong commitment to and passion for co-operatives throughout the years in which she has been a parliamentarian and a political activist. I welcome the guests who are in the gallery tonight for the debate, and who will attend the reception that will take place shortly afterwards in the Parliament.
The debate gives us an excellent opportunity not only to celebrate the international year of co-operatives, but to look at some of the fine examples of co-operatives in Scotland. We should also look at some of the international examples, and consider how we can implement that good practice in Scotland.
As Chic Brodie mentioned, there is a rich vein of history with regard to co-operatives in Scotland. We have held a debate before in celebration of the work of the Fenwick Weavers Society. As Helen Eadie pointed out, and as the motion mentions, the co-operative movement has developed extensively in the retail and energy sectors, in credit unions, and in football and other areas.
In my constituency, I do not have to look very far from my home in Cambuslang to see a shining example of a successful co-op. The West Whitlawburn Housing Co-operative Ltd became a co-operative in the 1980s, and the turnaround has been remarkable, not only in the quality of the housing but in the way the community has come together to combat crime and antisocial behaviour. People have much more pride in the area as citizens, and it is a great example of the real benefits that co-operatives can bring to an area.
It is important that we look at international examples to see how we can learn from them. One area in which we can see such examples is football, which people in Scotland obviously feel very strongly about. It is interesting to look at the German example. The rules in Germany are such that they offer a greater opportunity for community involvement and influence, which can be seen in the fan-friendly policies that are implemented there. I do not need to point out that Germany has a much greater success rate in club and international football than not only Scotland but England, and we can learn something from that.
In taking forward such ideas from Germany, we should look at the work of Supporters Direct in Scotland, which is an excellent organisation that has been at the forefront of developing 34 trusts and seven community-owned clubs. I know that its work is well supported by members throughout the chamber. I point out that we are coming up to the funding rounds, and good consideration should be given to the budget benefits of supporting Supporters Direct for what it can bring to football and sport throughout the country.
The debate is an excellent opportunity to celebrate the history of co-operatives in Scotland, to show how they can be beacons and platforms of success, and to discuss how we can develop the co-operative movement not only in Scotland but internationally, so that we can build those solid co-operative ideals at home and abroad.
17:29
I congratulate Helen Eadie on bringing this important debate to the chamber, and I am pleased to make a short contribution. I am delighted to say that, despite the huge amounts of money that were poured into Labour’s coffers by the original co-operative movement that Helen Eadie mentioned, the Scottish Conservatives are now very positive about the role of co-operatives in Scotland. I agree with Helen Eadie that co-operatives, along with other models such as charities, trusts and mutual business and private sector organisations, can help to reduce poverty and boost economic growth and employment. Co-operatives, combined turnover of £3.4 billion is clearly a hugely important part of Scotland’s economy.
I am pleased that the Prime Minister, David Cameron, has committed the Westminster Government to introducing new legislation governing co-operatives before the next general election. That bill will consolidate more than a dozen pieces of legislation into a single statute. I note that Ed Mayo, the general secretary of Co-operatives UK, welcomed the news, saying that he was delighted that the UK Government is
“taking action to put co-operative businesses on an equal footing and create a diverse economy.”
David Cameron, who established the Conservative co-operative movement in 2007, has described co-operatives as
“a vital branch of popular capitalism”
and said that he wants them to expand.
Helen Eadie’s motion refers to co-operatives in the agriculture sector. I have some experience of those, as I was involved in two farmers co-operatives in Argyll that shared and co-ordinated machinery use and the ordering of feeding stuffs and animal medicines in the 1980s and 1990s. In fact, I was chairman of them for a while. One was called SLAG—south Lochaweside group—and the other was called SLAM—south Lochaweside machinery ring. In their initial years, those co-operatives cut local farmers’ expenditure on food and medicines by around 30 per cent by getting discounts for quantity. That was very acceptable to the farming community, but not so acceptable to the merchants, who naturally preferred to deal with individual customers. That can be a problem if a co-op is set up somewhere where, previously, trade was between individuals and merchants only. However, the merchants who get the deals do very well out of them.
Scotland’s first machinery ring was established in 1987. Now, the Scottish Machinery Ring Association has member rings throughout Scotland serving more than 7,000 farmers and other rural businesses. I commend the work of the Scottish Agricultural Organisation Society Ltd, whose members are experts on co-operative and collaborative strategies, structures and management in the farming, forestry and aquaculture sectors. I particularly commend its work in promoting local food, which has the potential to be a growth area.
In my region, food from Argyll—an initiative that was started by Fergus Younger, who was linked to the old Argyll and the Islands Enterprise—has gone from strength to strength. It provides marquees and events where everything from oysters and local shellfish to MacKay’s lamb stovies, beef and even Bumble’s delicious exotic puddings, which are made in Lochgilphead, are advertised and eaten. That initiative is a great shop window, which brings much added value to many farmers who, before, had to rely on the low livestock prices at store auction markets. For those who make the effort to get the added value, the rewards are significant. However, many are now complaining about the high prices that event organisers who have cottoned on to that are charging for stalls and marquees. If I might say so, those organisers are becoming greedy and should give Scottish food producers—who, after all, provide a service—a fair deal.
There are some first-class examples of co-operatives in Scotland, and we have heard about many of them this evening.
Due to the number of members who still wish to speak in the debate, I am minded to accept a motion under rule 8.14.3 of standing orders that the debate be extended by up to 30 minutes.
Motion moved,
That, under Rule 8.14.3, the debate be extended by up to 30 minutes.—[Helen Eadie.]
Motion agreed to.
17:34
I, too, thank Helen Eadie for securing this debate on an important matter. I also extend my sympathy to her on her recent family bereavement. I had not made the connection.
It is all too easy for people to overlook the hugely significant role that co-operatives play in our society, so I warmly welcome the opportunity to highlight their work through the debate.
The Scottish economy has benefited from the £4 billion turnover of co-ops in 2010-11. With 28,600 employees in Scotland, they have also generated employment. They have helped Scotland to grow economically and have increased and improved community engagement throughout the country. Much of that success is owed to Co-operative Development Scotland. Last year, CDS exceeded its targets by supporting the creation of 30 new co-ops and increasing awareness of co-operatives in Scotland. As new co-ops are being created, there is a greater opportunity for Scots to become involved in one. Thanks to CDS, Scottish co-ops and their members have the support that they need to succeed.
As the UN has declared this the international year of co-operatives, it is appropriate that, like other members, I speak about the progress that they have made around the world. Co-ops have helped UN members and other states to come closer to achieving the development goals that they have set. In North America, co-operatives have been set up to provide day care for children, while in Japan they are used to care for the elderly. In parts of Europe, they have helped to find employment for their members during difficult times. Claudia Beamish mentioned Malawi. When Liam McArthur and I were there last year, we thought that there was a huge gap in the Malawi economy that could be filled by co-ops, especially in relation to the wastage of food. The latest edition of the Association of British Credit Unions Limited’s publication Credit Union News reports that,
“To coincide with the UN event,”
the Co-operative Bank, which has been very active in micro-finance, has
“announced the launch of a new type of international investment scheme that will provide much needed finance to third world co-operatives for capital and infrastructure projects.”
We are beginning to see a start in that area.
Co-operatives provide a fairer way of doing business through the application of democratic principles. Co-ops exist to meet the needs of their members and have helped to reduce poverty around the world. They show the importance of working together to achieve a common good by giving power to the people who might otherwise be powerless. They give their members a say in their own affairs and promote confidence in the partners as well as in the co-operatives. However, co-operatives are not just good for their members; they also have outstanding business performance across every sector. They are efficient and sustainable, and they have better customer services overall.
Co-ops are especially useful in tough economic times because they do not face the same dangers that many businesses face and they are less risky, as they tend to rely on financial support from their members instead of taking loans from banks. While other businesses rely on bailouts, co-operatives are capable of sustaining their trade and have shown that there is a safe alternative to risky business. That is extremely important, especially in the current economic climate. Businesses need to be safer and more accountable to their customers, and co-operatives encompass those values while spreading the risk and wealth more evenly throughout the co-op. As a result, when one member of a co-op benefits, all members benefit. That makes for a more even distribution of wealth, motivated employees and superior customer service.
I would be grateful if you would come to a close, please.
I am disappointed that Lloyds is now charging co-operatives for its services, but I congratulate the food co-operative in my constituency, Community Food Initiatives North East—CFINE—and the North East Scotland Credit Union.
17:38
I congratulate Helen Eadie on bringing the subject to the Parliament, not just because I am one of the co-conveners of the cross-party group on co-operatives—it is good to see all the others here this evening, including the Presiding Officer—but because I have long thought that more can be done to build on the work of good organisations such as Co-operative Development Scotland in furthering the cause of working together for the common good rather than disparately. Co-operatives also give workers the chance to share in the success of their business. What a great incentive and what better way to address fairness in the workplace?
The motion mentions that 473 groups of businesses in Scotland have a turnover of £3.4 billion—nearly a staggering £7.2 million for each group of businesses. Imagine the buying power of a company with a turnover of more than £7 million compared with the buying power of each of the many small businesses within the group, which may have a turnover of only £20,000 or £30,000. It is all about economies of scale and, of course, working for mutual benefit.
Traditionally, people who were in business saw neighbouring businesses as competition. I do not believe that that is the case. We live in a global marketplace in which barriers to trade are disappearing. For example, purchasers of holidays who do not want to build all the blocks of a good holiday themselves—such as where to eat, where to rent a car, what to see and where to stay—now benefit from going online and clicking one button to get the whole experience. VisitScotland has done good work with its online system for members. That involves microbusinesses working under one umbrella.
The motion mentions agriculture, and I declare an interest in that. The agriculture industry has a plethora of microbusinesses that are often at the mercy of big companies that dictate the price of supplies. In recent years, advances have been made, often supported by organisations such as the Scottish Agricultural Organisation Society, which Jamie McGrigor mentioned. Those have advanced the buying power of businesses or expanded the opportunities to reach out to markets, which is difficult for a one or two-person business to do.
There are many good examples of that but, to be parochial, in the South Scotland region, there is the Borders Machinery Ring, which enables its members to improve their buying power through the economies of scale of co-operative buying. That is along the same lines as the approach of the Fenwick Weavers Society just over 250 years ago. I was glad to have been at the celebration of that anniversary last year and to sign the new Fenwick charter, which I think was thanks to Willie Coffey.
We also have the Scottish Borders Food Network, which markets food from producers and outlets across the Scottish Borders to make it easier for the buyer to buy the whole package. Hotels are co-operating with farmers and farmers markets to deliver quality produce in a single marketplace. One of the network’s great successes is the Borders banquet, which provides two weeks of culinary delights throughout the Borders, giving people a chance to taste food such as Peelham’s salami, which is one of the few salamis that have been exported successfully to Italy—talk about selling sand to the Arabs—Giles Henry’s free-range eggs; Standhill and Stichill cheeses; and, of course, Traquair ales. Those are all microbusinesses that benefit from co-operation in the true meaning of the co-operative movement.
The UN General Assembly has announced that 2012 is the year of co-operatives. I am proud that Scotland has always led the movement. We have come a long way from the Fenwick weavers and New Lanark to where we are today, but we still have a long way to go. In that, our focus should be on banking. In the past, many mutual building societies have gone private, and we now have loan companies that offer pay day loans for a staggering annual percentage rate of 4,214 per cent. I believe that, as Helen Eadie said, credit unions need to play a larger part in our society in future. Therefore, let us celebrate 2012 as the year of co-operatives and use it as a starting point to promote more co-operation in our society.
17:43
I, too, congratulate Helen Eadie on securing the debate and on the excellent start that she gave to our discussions. Like her, I declare an interest as a member of the Co-operative Party. I put on record the fantastic work that co-ops do in Scotland and throughout the United Kingdom. In an economic recession, co-operative businesses are a particularly important way in which to secure local economic development and to secure profits for people to share out locally, whether that is in the local community or among the workers who run the company. They share the wealth that is created and sustain wealth locally. Helen Eadie was right to point out that co-operatives perform well and are a positive way in which to retain investment.
Maureen Watt was right to point to the work of the Co-operative Bank in promoting ethical banking, supporting local co-operatives and supporting renewables throughout the UK. That is worth celebrating. Sarah Deas of Co-operative Development Scotland has rightly said that
“Co-operative business models used to be considered niche”
but they are
“now entering the mainstream and being taken seriously at a national level.”
As Helen Eadie pointed out, that also applies at the international level, which is fantastic.
In Lothian, Scotmid has been trading for many years. It has done fantastic work in supporting Fairtrade in Scotland, and was one of the first key retailers to take Fairtrade from its niche and put it into the main stream.
Like other colleagues in the chamber, I have visited a sugar co-op in Malawi. The benefits of that co-operative were being spread into some of the most disadvantaged communities. It was especially important for women workers and their children; they got real benefits from profits that could be reinvested both in the business and in the local community.
Closer to home is the Edinburgh Bicycle Cooperative, which has been fantastic. It has made cycling in Edinburgh trendy. It provides fantastic bikes at a decent price, and it provides fantastic clothing. As a result, other bike companies have set up across the city. A new market has been created. The work of members of co-operatives can lead to expansion.
Edinburgh Community Food also has an ethical flavour. It aims to tackle inequalities in low-income communities by supplying food co-ops across the city. It aims to relieve poverty and to promote health equality by providing affordable healthy food to communities that could not otherwise afford it. It does a fantastic job.
Two other types of co-operatives are established locally. One is the Edinburgh Community Energy Co-operative. It was set up at the end of 2007, and it has taken a long time to arrive at something tangible. The co-operative has done a lot of work in studying opportunities in Edinburgh for co-operative renewables, and a project is now up and running in Leith thanks to the climate challenge fund. Progress is being made. The co-operative has been instrumental in drawing individuals and communities together across Edinburgh, allowing us to focus on what practical measures we can take to tackle climate change in a way that creates green jobs. Colleagues in the City of Edinburgh Council are proposing that we take the idea and run with it. If the co-operative model is a success, thousands of people will benefit.
Another real contribution has been made by housing co-operatives. West Granton Housing Co-operative and Lister Housing Co-operative have provided a fantastic model of decent housing. I had always assumed that the co-operatives were quite old, but when I looked them up in preparation for today’s debate, I found that Lister Housing Co-operative was set up in 1976, and West Granton Housing Co-operative in 1990. However, they have both enabled tenants to play a full part in the management of their properties. They have made an important contribution towards the sustainable management of housing in Scotland. It is an example that I would like to see a lot more of.
17:47
As the last of the quartet of co-conveners of the cross-party group on co-operatives, I thank you, Presiding Officer, and I thank Helen Eadie for bringing co-operatives to the attention of the Parliament, once again, through this members’ business debate.
As I said in one of my previous members’ business debates on co-ops, their time has well and truly come. This year is as good a time as any to highlight not only their record of achievement but the very real opportunities for their future in establishing new businesses and social enterprises.
I am sure that everyone is aware by now that the principles of co-operation were perhaps first established in 1761 in Fenwick in my constituency when a group of local weavers signed a charter outlining their commitments. The weavers resolved that they would be
“honest and faithful to one another ... and to make good and sufficient work and exact neither higher nor lower prices than are accustomed”.
The first society members demonstrated one of the key strengths of our current co-operative model—a clear focus on the needs of members and the local community. It opened a shop and made bulk purchases of essential goods, which were resold to members and their families. It also loaned money to members at preferential rates.
I said perhaps first established because our local experts, the twa Johns, Smith and McFadzean—one of whom I can see in the public gallery—have been at pains to point out that, although the Fenwick weavers have clear documentary evidence placing them ahead of all others, including Rochdale, by some 80 years, some other evidence may emerge from elsewhere to thwart Fenwick’s claim. I hope not.
As Ms Eadie says in the motion, there are nearly 500 co-ops in Scotland turning over a staggering sum of £3 billion-plus. That is nearly 4 per cent of our GDP and is a considerable contribution to the Scottish economy.
It has been estimated that there are more than 130,000 co-ops across Europe, with more than 80 million members supporting 2 million jobs. That is quite staggering when we think back to their humble beginnings. The Fenwick weavers have a lot to answer for.
Some time ago, I had the pleasure of meeting the Mondragon Corporation in the Basque country, which is one of Europe’s biggest and most successful co-ops. Claudia Beamish mentioned it earlier. There are more than 100 companies in that organisation. In the chat, I was interested to hear that it transfers its worker-owners around the various co-ops if anyone is facing a particular difficulty. I hope that employers and businesses in the wider economy will consider that principle of looking after worker-owners and retaining them to work in other growing sectors of the economy.
Locally, we are, of course, blessed with many and various impressive examples of co-operation. Our very own Kilmarnock Supporters Society operates as a community benefit trust. The Killie trust was established in 2003 with the help of Supporters Direct, which James Kelly mentioned, and it has raised more than £120,000 for a variety of local causes, including setting up community bursaries, supporting young female exercise and dance groups, and supporting work to improve the 3 Rs among youngsters through the medium of football. Perhaps that is an intriguing and welcome initiative.
The recognition by the United Nations of the contribution that the co-ops have made since the early days is as welcome as it is fitting. Depending on who we believe, the global economy is in meltdown, currencies are at risk, and some countries are in danger of going out of business. Debt is no longer sustainable and the world has to change. The time for co-ops has therefore come, as I said at the start of my speech. They are reliable, honest and sustainable, and people trust them and share their founding principles, which put their communities first. Their approach to business and social enterprise is surely a model that will find greater prominence in the changing economy of the 21st century.
I am happy to support Helen Eadie’s motion.
17:52
Like other members, I am pleased that we have the opportunity to debate the motion and I thank Helen Eadie for lodging it.
I find it hard to see how anybody could fail to recognise the many benefits of the co-operative business model, its important historical roots and its profound relevance to the modern age. Willie Coffey alluded to that at the end of his speech.
There are people who see that there are differences between forms of economic activity and that not all economic activities are the same and should be measured in the same way. Some forms of economic activity are driven by competition alone and the desire of a small handful of people to ensure that they serve their own interests come what may and irrespective of the impact on other people in the world around them. Then there is the co-operative model, which is very different from the competitive model. It is not the same thing, and it is not a subset of the same economic system. The co-operative model is about mutual aid and democratic accountability, local community links and—often—consumer empowerment. It provides something that is fundamentally different from the conventional business model.
My only regret is that the co-operative model is sometimes seen as being an alternative business model under an unspoken heading alongside other models such as mutualism and social enterprise. In reality, we should seek to make the characteristics that co-operatives demonstrate the default. We should aim to achieve an economy that shares those characteristics rather than simply think that a small number of co-ops can do their good work and we can congratulate ourselves on supporting them without transforming the rest of the economy. Members have talked about a range of sectors in Scotland in which co-operatives have demonstrated those characteristics well, such as the housing and food sectors. In particular, Jim Hume talked about cheese and beer, which are two of my favourite things in life. I could speak about them all night, but I will focus on energy and banking.
Sarah Boyack made points about energy that I would have made. The co-operative business model can have a profound role in energy in Scotland, both in respect of bulk buying it and providing it to individuals as the retailer. Local councils, the public sector and other business models could be doing that, but co-operatives could also play a really profound role, as well as generating energy from renewables and ensuring that the benefits of that generation come to and impact on the widest possible number of people, rather than seeing renewables as being under the control of a tiny number of massive multinational corporations.
I also want to talk about banking. It is no coincidence that, when we look around our neighbouring countries in Europe at those whose banking and financial services industries survived better than the UK’s did, we see much greater diversity. They have small banks and public banks, as well as co-operatives. Co-operatives have a role in this country, but it could be so much better. If they had a stronger role in the financial services sector in this country, we would not be debating whether to put a workers’ representative on a remuneration committee, or the obscene pay ratios in some parts of the financial services sector, because that simply is not part of the co-operative ethos. That ethos should be celebrated where it exists and we should be learning from it to transform our entire economy.
17:56
I congratulate Helen Eadie on securing the debate and presenting it in such a constructive and informative way. Indeed, all members have contributed in a helpful way and covered the country in co-operatives and what they have given us in the way of produce, models and ethics.
I thank the minister for allowing me to squeeze into an oversubscribed debate, but I want to extend our geographic reach a little bit further. Patrick Harvie touched on the Heineken effect of co-operatives and there are two examples in my constituency on the small islands of Papay, which has a population of around 70, and Eday, which has a population of about 150. The only sustainable model for a local shop on Papay extended to a hostel and petrol and diesel retail, and on Eday, it extended to a small wind turbine development. The only way in which the people on those islands could sustain those businesses was by using the co-operative model and both businesses have been thriving for the past three decades or so.
That is a fair point about how diversification ensures the sustainability of such projects. Of course, we are talking not just about businesses in our own country but about compassion around the world, as is shown by the fair trade movement. That is where I have an interest, not just as minister but as former chair of the Renfrewshire fair trade steering group, which ensured that the county achieved fair trade status and increased the amount of work being done on that. The Government endorses the work of co-operatives for their collaboration and their ethical approach.
There should be no embarrassment in name-checking all the products and projects from across Scotland that we have talked about, because they make an important contribution. We know that co-operatives go the extra mile to support their customers and communities with compassionate policies. Many people could take a leaf out of their book on ethical policies, investment and procurement.
Co-operatives are not just about worthwhile projects. There are many in the high-tech sector, such as Clansman Dynamics, delivering top-level and innovative design, and there are others, such as the Heart of Argyll Tourism Alliance, operating successfully in the private sector. The Scottish Government pays tribute to all who are involved in the co-operative movement.
Jim Hume talked about being at the celebration in my colleague Willie Coffey’s community of Fenwick; for a moment, I thought that he was going to suggest that Willie Coffey was at the inception of co-operatives 250 years ago, when 16 weavers gave birth to the charter and the co-operative movement. I would continue, as Willie Coffey has done, to assert the truth that Fenwick was the birthplace of the co-operative movement around the world, to which Scotland has contributed so much. We also have to learn from that success.
As capitalism is under some pressure—and even David Cameron has discovered the true benefits of co-operatives in his Government statements—we can also learn from progress around the world. Who would have thought that a co-operative might be the business model of choice going forward to 2020?
It is important for co-operatives to focus on growth areas, which they are doing. A healthy economy is encouraged by healthy business ethics, such as those from co-operatives and the collaboration that they enjoy.
Scotland has 485 co-operative businesses, which employ 28,500 people and have an incredible turnover of £4 billion. That is very positive. Co-operatives will continue to grow as we continue to support the co-operative movement.
I pay tribute to Co-operative Development Scotland, which has supported a number of businesses. I understand that it has supported 28 new employee-owned co-operative businesses in taking forward their cases to achieve sustainability. They include Design Collective Scotland and others such as Accord Energy Solutions, Galloway & MacLeod and Hebridean Jewellery, which have transferred to employee ownership to drive future growth and sustain their business in their community. For the avoidance of doubt, I say that Co-operative Development Scotland as a subsidiary of Scottish Enterprise will continue to carry out its function and the Scottish Government will continue to support it to do so.
Co-operatives have made and will continue to make a big contribution to Scotland. As a relatively new minister, I am delighted to have participated in the debate. Helen Eadie said that ministers have “magic dust”. In my initiation to ministerial office—it has taken a few weeks to get an office, but I have one now—I have not yet found the magic dust. If any civil servant wants to point it out to me, I will be happy to spread some on all matters co-operative.
We come to the penultimate moment of this occasion, which does not end with my closing remarks. We will proceed to a reception to meet people from co-operative societies and celebrate their contribution to Scotland and the world. We will be joined there by the Cabinet Secretary for Finance, Employment and Sustainable Growth, who has a close interest in the subject.
Meeting closed at 18:02.Previous
Decision Time