Let’s Take Back Our Co-operative

Let’s Take Back Our Co-operative

Posted: 10/03/2014 | Author: The Political Idealist | Filed under: Uncategorized | Tags: Activism, capitalism, co-op, Cooperatives, fairness, paul flowers, social justice, socialism co-operative party |Leave a comment

The British co-operative movement has seen better days. Just as the waves of carpetbagging and consolidation were fading into memory, the UK’s second largest co-operatively owned institution is seeing its finances and principles come crashing down into the mud before it. Management say that a series of bad decisions by the Co-operative Bank during the financial crash created the multibillion black hole that is forcing their hand.

But what is the fuss about? What is the loosely accountable board of the Co-operative Group doing that is so controversial?

The Co-operative Group has built up a debt mountain following a buyout spree, in which the group attempted to grow inorganically by taking over (mediocre) rivals like Somerfield convinience stores and the Britannia building society, then absorbing them wholesale into its general retail and banking operations. Trouble is, the former is associated with high prices and shoddy customer service, whilst the latter had what seemed to be a large but manageable hangover of post-crunch bad debt. In what has been colourfully described as “a crusade of corporate imperialism”, the mutual that “did things differently” diluted its record on customer service and responsibility. Unfortunately, that was not the end of it.

Last year, it became apparent that the black hole in Britannia’s finances was much larger than previously thought- ironically, this emerged when the bank’s takeover bid for another financial institution fell apart. The Co-operative Group’s banking division was broke. After the Group pumped over a billion pounds into it, then surrendered a 70% shareholding in the bank to US-owned vulture funds, that crisis was over. But now the Group itself is broke.

So I understand that the members’ dividend had to be scrapped, and that some of the Groups’ business must be sold to ease its debts. It will be regrettable to see the “whole life” model of the Co-operative go: there was a time when it provided everything from the sweets you ate as a child to the clothes you were, the mortgage you bought your home with, the holidays you went on, the car you drove to your funeral service. As a mutual, it drove prices down and standards up for everyone. It might still do so in the future.

But I’m not on board with the thousands of redundancies that executives are inflicting on the Group’s workforce… whilst planning to award themselves over 50% pay rises.

Under the proposals, revealed today by the Observer, new chief executive Euan Sutherland will receive a base salary of £1.5 million this year, plus a retention payment of £1.5 million. With other extras included he will receive a total of £3.66 million – by contrast, his predecessor Peter Marks received £1.3 million last year.
Other executives in Mr Sutherland’s team will take home amounts similarly inflated beyond what was being paid out in the past – between £500,000 and £650,000 compared to between £200,000 and £400,000.

Independent on Sunday

The new management are not to blame for the Co-operative Group’s current problems. But they are to blame for the injustice of paying themselves obscene bonuses whilst forcing their workers onto the dole. Completely at odds with the Group’s anti-capitalist principles.

This is a member-owned organisation, and we have the power to force our representatives to exercise more restraint. I appeal to fellow members to co-operate to do this, otherwise we might as well not be a co-operative.

Watch this space.