Remember the "Divi"? It's Back

By Hargreaves, Ian | New Statesman (1996), March 19, 1999 | Go to article overview

Remember the "Divi"? It's Back


Hargreaves, Ian, New Statesman (1996)


The Co-op is unfashionable, but the Rochdale Pioneers' model could solve problems of education, health, even London's Tube.

If I were a member of the Co-operative Party or a lifelong member of a workers' co-op, I think I'd be alternately annoyed, puzzled and pleased by the way that the Blair government handles the subject of co-operatives.

On the one hand the Prime Minister undoubtedly talks the talk. In his address earlier this year to the annual conference of the National Council of Voluntary Organisations, he assailed those in the Labour Party who had "at times forgotten [the party's] roots in self-help, friendly societies, co-operatives and voluntary organisations, and the insights of Robert Owen and William Morris."

On the other, there is no sign of the government finding parliamentary time for the promised co-operatives bill, which embodies the movement's long-standing desire for a level legal playing field for the development of co-operatives in Britain. But then again, there is a case for saying that what British co-ops need is not so much an act of parliament as an act of rehabilitation. The problem with co-ops is that although they appear to be the logical key to the Third Way map - neither left nor right, neither public nor private sector - they are stuck with an image of decline. In short, they are unfashionable.

In one sense the decline is real. Since the days when my mother collected her "divi" to buy shoes for us, in industrial Lancashire in the 1950s, the most visible parts of the co-operative movement, its retail shops, have been scaling back. The number of co-operative retail societies has fallen from almost a thousand to 46. In 1997 it looked briefly as if an unscrupulous entrepreneur called Andrew Regan might succeed in taking over the CWS and stripping out its assets, but he was in the end repulsed, not least as a result of his own errors and dishonesty. But the fact remains that in their heyday, the co-ops had 11 per cent of the retail market and today are down to an estimated 4 per cent.

The picture is by no means all bleak, however. CWS, the biggest retail co-operative, brought back the "divi" last year and, coupled with its first national television advertising campaign for 20 years, produced a strong upsurge in sales; it is now focusing on developing smaller shops, which is its area of natural competitive strength.

A number of other regional co-op retail activities have enjoyed strong growth and diversification - the holiday trade has proved especially successful. The Co-operative Bank, wholly owned by CWS, has enjoyed an excellent run, developing its image as an ethical bank that won't lend to polluters, oppressive military regimes and those who are cruel to animals, while generating innovative and competitively priced products. Its return on equity beats Barclays and NatWest and is surpassed only by Lloyds TSB. The Co-operative Insurance Society, CIS, has also enjoyed a growth spurt and ranks with the insurance Big Six, while still fielding an army of premium collectors to provide a service to people who don't have cheque books. It is also topical to point out that CWS pioneered the labelling of genetically modified foods in 1994.

More significant, in a way, are the stirrings at the grass roots. Since 1992 the number of credit unions, co-operatively owned and managed small savings banks, has increased from 383 to 584 and their savings deposits have quadrupled. In housing, it took a report from Price Waterhouse, commissioned by the previous government, to establish beyond reasonable doubt that co-operative housing management and ownership are attractive in terms of popularity and efficiency - though no one seems to be able to explain why the Housing Corporation, which sits atop the housing associations, appears indifferent to this conclusion. There is even growth in industrial worker co-ops, with some star names such as the St Lukes advertising agency and Poptel, the Internet services provider, alongside the less surprising Tower Colliery in South Wales.

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