Is the Co-op still relevant in today’s political and commercial worlds?

Written By: Trevor Hopper
Published: April 8, 2017 Last modified: April 14, 2017

The scandal surrounding Paul Flowers, the ex CEO of the Co-op, that came to light in 2013, which included drugs, sex and financial irregularities, probably gave many in the nation a few smiles amidst grave concerns. Smiles about the rather avuncular figure, using cocaine and also being a Methodist minister – thereafter dubbed the Crystal Methodist. Concerns from the Co-op’s millions of customers, particularly those with bank and savings accounts, at the vast problems of the entire Co-op trading group. But, to those of us in the Labour movement it has a particular significance as the Co-op in its many forms has been at the heart of Labour since the 19th century and its problems are perhaps a reminder of the kind of conundrums that can be encountered by the entire movement in a world of changing class and political affiliation.

The horror expressed more recently over the salary of the new CEO, Steve Murrells, epitomises the dilemma for the Co-op and its ethical ethos. How can the Co-op pay such a vast salary, apeing the corporations it claims to differ from? Similarly concerns were raised at the changes to members’ influence in the democratic structure of the movement and the attempts to curb the Co-op Party’s financial support for the Labour party. There seems to be a major struggle between maintaining the democratic and ethical principles and returning the movement to profitability with a long term future. Like many labour activists over the years, I have dabbled with involvement in the Co-op and my experiences are inevitably personal and limited but have caused me to reflect on its recent issues.

Firstly, there is the rather ambiguous but supportive relationship of the Co-op party itself as a sister party to Labour – a party financed by the wider Co-op that celebrates its centenary this year, but is committed to support for the Labour party. Hence those Labour/Co-operative titles under which a number of MP’s and thousands of Councillors currently sit. But what does this actually mean? The relationship is usually a straightforward financial transaction, a few hundred pounds for a Councillor’s campaign, or more for an MP, in return for a pledge to support the general principles of Co-operative values. The candidate also has to be a member of the Co-op in general. Does this make much sense or relevance to the wider electorate? The generation of those who still remember their dividend number (South Suburban 267438, by the way) must surely be passing and the association of Co-op with Labour is probably known better by Tory MPs than the average voter.

My experience of Co-op party involvement entailed going along to quite a few meetings which seemed to consist of the same members as the local Labour party, and having rather similar discussions. The difference appeared to be that the Co-op had a more cultural side to it, and their AGM often had a good speaker and damn good food and wine!

Finally, in 2000 I was tempted to become involved in the actual Co-op society itself, an advert in the local store requesting Directors to seek election to the board. Anyone with an interest in Co-ops could apply, an annual allowance of a few hundred was payable for attendance at monthly meetings and it appeared a good way to become involved and play a part in real alternative, ethical trading. The ‘election’ of Directors was a farce in itself as everyone who is a member of the Co-op is entitled to vote and yet nobody does. Consequently I, like so many others before me, was ‘elected unopposed’ after nomination on the basis of my labour credentials. Indicative of some of its problems the Co-op probably still possesses the largest unknown electorate. All members are entitled to vote, but who knew who or where they were? Who ever informed the Co-op that they had moved or that a member had died? Ripe for ‘Vote early vote often’.

Still, I was quite excited about being ‘elected’ as, although involved in the Labour party, I was weary of local politics, not wishing to enter the competition and battle­ground of selection procedures for becoming a Councillor. This seemed like an interesting and softer option to becoming involved in my community along labour/social issues and I did have a genuine interest. I’d shopped regularly in the stores, had Co-op ISA’s and bank account, and I believed in those principles of mutuality and non-profiteering. I was also acutely aware of the history of it all.

My experience was rather short lived – a year to be exact. I left because I could not commit to the amount of time required. My main activity was attending the monthly board meetings, which consisted of ten or twelve of us non-executive directors looking over a range of accounts, reports on trading etc. To be honest, I had not a clue what was going on and I suspect neither did some other newcomers. There were some directors, including the Chairman, who had been involved for many years and were clearly steeped in Co-op procedures; he was later promoted to national level.

There were many training opportunities and courses held at the Co-operative College, should I have so desired. But even given years of experience and training I could not help getting the distinct impression, promotion was very much ‘Buggins turn’ through the labyrinthine structures of Co-op governance. The only aspect I felt able to fully take part in was the assessing of applications by various groups for the Community Fund, a useful and interesting distribution of the old dividend.

Otherwise, here I was, a Director of a multi-million pound business covering numerous stores, pharmacies and funeral parlours, yet I did not feel I was competent to question decisions made by the experts who were grocers, traders and managers of many years retail experience. Twice a year we would do a whistle stop tour of stores, where rather like royalty we would shake hands and hear how marvellously they were doing.

This was the problem we were always hearing – how well they were performing. Yet what was actually happening was that the Co-op seemed to be shrinking. The main department store, which looked hopelessly out of date, was full of what were called ‘concessions’ – space rented to other retailers. This meant that we had no say over the employment conditions or buying policies of most of the store. The one major decision that I took along with rest of the board was to close down the Burgess Hill store.

There were also the half-yearly meetings that all members are entitled to attend to again hear how well things were going. The democratic value of these was demonstrated by one member questioning why the organisation was constantly shrinking in terms of store closures, concessions etc but we were still being told all was well and profitable. The answer was not forthcoming.

These meetings were well attended. Why? Because coaches were laid on and it was a free meal and drinks. The average age of attendees was reported as being 75 and, as one director commented, they appeared older. A local Labour Councillor addressing the meeting about the relationship with Labour was booed – they could not see the relevance and had no understanding of the history behind the relationship.

I must not be too critical as this was over ten years ago and there has been considerable reorganisation since, both before and after the 2013 crisis. But much of this has meant further shrinkage, including farms and pharmacies being sold off. The emphasis is to concentrate on retail, banking and insurance, and the purchase of many small convenience stores has proved successful. The Co-op bank retains its principles on paper but is no longer wholly owned by the Co-op group, mainly hedge funds.

I still retain my bank account and try to use the stores for as much as possible, still valuing the mutual model, community links and support for Labour, and must exonerate the Co-op party from any fault. Clearly, I am no Paul Flowers, but thinking of his and the Coop’s fall from grace, I cannot help ponder the problems of an organisation that has given so much power to amateurs, or at best semi professionals in a business that has to compete with the best. Also, I understand many Greens have cottoned on to the relevance of the Co-op to their principles, making yet another threat to its support for Labour. Let’s hope not.