Co-operative Purchase of Companies

Opened the debate

Christina Rees highlighted the economic inequality in the UK that has been exacerbated by the pandemic, particularly for workers who earn low wages. She pointed out that narrow ownership of the economy leads to decisions being made in the interests of the rich and powerful rather than communities, workers, consumers, and the environment. She cited a report which found that only 10% of people believed the UK economy prioritised sharing wealth fairly before the pandemic, while nearly seven in ten thought the recovery was an opportunity for greater community involvement in business operations.

Government Response

It is a pleasure to serve under the chairmanship of Mr Davies. The Minister for the co-operative movement is indeed the Economic Secretary to the Treasury, John Glen, who values co-operatives and supports them through various measures such as the Co-operative and Community Benefit Societies Act 2014, which reduced legal complexity, and an increase in withdrawable share capital from £20,000 to £100,000. There are no plans for a review of the 2014 Act but proposals for reform will be received. The Government has also introduced tax reliefs for employee-owned organisations, enabling them to benefit from schemes such as furlough and business loans during the pandemic. The minister acknowledges that there are differences between the Italian and UK economies, notably in unemployment rates (UK at 4.7% vs Italy's 9.3%), which means a Marcora law may not have the same impact here due to lower levels of sustained unemployment. Additionally, more research is needed on productivity implications before implementing such legislation. The minister highlights that the Government has provided financial support through the furlough scheme and kickstart jobs for young people, with over 50,000 positions already created. They also launched a £150 million community ownership fund allowing communities to bid for up to £250,000 of match funding from the government to take over local assets at risk of closure.