A new Bill has been introduced in the UK Parliament this week which aims to facilitate more capital investment into cooperatives. The Private Members’ Bill, brought forward by Cardiff North MP, Anna McMorrin, was read for the first time in the House of Commons on Wednesday 5 February.
The Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill proposes a way for cooperatives to grow and develop their businesses whilst enhancing their commitment to member ownership and control. Also known as the Green Share Bill, it will focus new funds on environmentally sustainable investments within this important business sector.
According to mutual/cooperative consultancy Mutuo, the Bill also introduces new provisions including an option restricting the demutualisation of cooperatives into companies and the distribution of their legacy assets.
Mutuo says that the Bill takes forward a key recommendation of The Ownership Commission and builds on similar legislation seen in other parts of the world.
Co-operatives UK also supports the intent of the Bill and their evidence (based on what their members have told them) shows that its provisions enjoy support in the UK cooperative sector and they believe it would have a very strong positive impact. According to Co-operatives UK, the Bill would enable the Britisih government to use secondary legislation to:
- give cooperative societies the option of legally preventing their capital surplus (what is left after share capital is repaid) being distributed among members upon dissolution
- give cooperative societies the option of legally preventing their future conversion to a company
- provide a new equity instrument that is repayable at the option of the society rather than withdrawable at the option of the shareholder
Secretary General of Co-operatives UK Ed Mayo said: “We are fully supportive of this Bill, which could help more co-ops raise capital that is committed to social purpose, while adding protections against demutualisation. We’re delighted to see Anna McMorrin MP taking this forward and will be helping our members to have their say as the Bill progresses.”
Mutuo’s Managing Partner, Peter Hunt, said: “The challenge has been to amend the capital regime for co-ops and community benefit societies, to permit the injection of external capital, whilst enhancing their mutuality. We can point to existing examples of where this has been achieved in other countries such as Canada, Australia and The Netherlands.
Anna McMorrin’s Bill offers an important step forward for these mutuals, helping to make the business model even more popular for co-ops which are keen to take advantage of their high levels of trust among customers and members.”
Learn more about the Bill on Co-operatives UK website.