I am proud to be a Labour and Co-operative MP and to represent both parties in Parliament.
The last month has been a difficult time for everyone involved in the Co-operative movement.
This is clearly a challenging time for the Co-operative Bank and the wider Co-operative Group but it must be remembered that there are over 6000 co-ops in the UK and they are playing an increasingly important role in the economy. The co-op sector in Britain grew 20% between 2008 and 2012 whilst the economy as a whole shrunk 2%. So this is a vital sector that is growing and developing.
It is really important that we don’t lose sight of the important work of co-operative housing, energy and credit unions in local communities. They are working day in day out to promote a fairer society. Opponents of co-operative and mutual principles will try and use recent events to say that our values of mutual ownership and democratic control are no longer relevant. They are wrong.
The Co-operative Group have been clear that they want to learn the lessons of what happened and they have two reviews in place which must provide those answers. The first review, which is being chaired by Sir Christopher Kelly, is looking at the events which led to the announcement of the Co-operative Bank’s capital action plan needed to address its capital shortfall. The second review will be carried out by the Board of the Co-operative Group and is a root and branch review of the democratic structure of the organisation. Additionally there is a fact-finding process happening to look into any inappropriate behaviour at The Co-operative Group or the Co-operative Bank and to take action as necessary.
Securing the future for the Co-operative Bank, without the need for recourse to public funds, is clearly the top priority. As a Co-operative MP I believe it is important that the new management at the Co-operative Group have committed to embedding the ethical principles, which are at the heart of the Co-operative Bank’s unique approach, in its constitution. The Co-operative Group have been clear that despite the changes in the bank’s management structure they will retain an effective veto by holding more than 25% of the shares of the bank. The 30% stake the Co-operative Group retains will be far greater than any other individual shareholding in the bank. I hope that the recapitalisation will be a new and positive beginning for the Bank and in time the Co-operative Group can grow its stake again in the future.
As a member of the co-operative movement I believe it is critical that we learn the right lessons from what has happened including ensuring that the governance structures within our sector are robust and appropriate for the 21st Century. Labour MPs have been calling on Government for some time to amend financial legislation to ensure that those at the top of banking institutions have the necessary financial services experience. This is important for the entire banking sector large parts of which, let us not forget, needed to be bailed out by taxpayers in the last 5 years.
Co-operative principles and values have a vital role to play in our movement and our society .