Co-operatives, Mutuals and Friendly Societies Bill achieves Second Reading

We are delighted that Sir Mark Hendrick’s Co-operatives, Mutuals and Friendly Societies Bill received its Second Reading in the House of Commons on 28th October 2022.

With all-party and Government support, the Bill will now proceed to the Committee Stage in the Commons, where it will receive detailed scrutiny and be subject to technical amendment.  We anticipate that this will take place before Christmas.

You can download a video of Sir Mark’s speech through WeTransfer here.

The Bill will act to preserve mutual ownership by ensuring that assets may only be used for the purpose they were intended. This would ensure they cannot be distributed to members or third parties, and thus disincentivizes demutualisation. The full debate can be read here.

We would also like to thank Richard Fuller MP, Peter Gibson MP, Chris Clarkson MP, Anna McMorrin MP, Sally-Ann Hart, Danny Kruger MP, Andy Carter MP, Dr Luke Evans, and Anna Firth MP for their contributions, as well as Tulip Siddiq MP’s welcome support from HM Opposition.

We warmly welcome the Economic Secretary, Andrew Griffith’s response: “confirm(ing) that we will support it because we believe in, understand and recognise the contribution that the mutual model makes to society and financial inclusion, which is important to hon. Members on both sides of the House, and the diversity that it provides for the financial services sector.”

The Bill received strong cross-party support with Richard Fuller MP stating that it is “an important responsibility of Government to maintain a structure of legislation that enables each of those organisational structures to thrive and prosper. Such organisations are the essential “little platoons” of the Burkean view of Conservative ideals and of the co-operative ideals of the Labour Party.”

Sir Mark Hendrick MP stated that: his “Bill will introduce new provisions to maintain the destination of the capital surplus to ensure that where a mutual’s rules make the capital surplus non-distributable, any resolution to convert it into, amalgamate with or transfer engagements to a company shall also include a provision to transfer the capital surplus, as provided by the rules in the event of a solvent winding up.”

Danny Kruger MP said: “I welcome the Bill…not all capital is fungible. It is not appropriate to allow all capital to be blown to the four winds at the whim of speculators and investors. It is important sometimes to lock capital in the places where it belongs, for the benefit of the people it was invested for.”

Peter Gibson MP also spoke in support of the Bill stating that: “Australia’s Treasury Laws Amendment (Mutual Reforms) Act 2019 introduced new mutual capital instruments (MCI). Under the 2019 Act, share owners in Australia are limited to one vote per member regardless of how many MCIs the owner holds. The Act also introduced a clarification that the issuing of MCIs does not amount to demutualisation by the organisation for tax purposes, I would be interested to hear the Minister’s thoughts on that Act and its relevance to any legislation that might be appropriate for the UK’s mutuals sector.”

Anna Firth MP said: “Co-operatives, mutuals and friendly societies are a wonderful resource embedded at the heart of our communities. They expand opportunity, wealth and aspiration throughout our great nation. They are democratically owned and controlled by their members, with profits reinvested in the organisations or among their memberships.”

Mutuo Managing Partner Peter Hunt said: “We welcome the level of support from across the House and look forward to working with Members of Parliament as the Bill progresses.”

New Bill to enhance operating environment for co-ops and mutuals

Sir Mark Hendrick MP

A new Bill will has been introduced in Parliament this week which proposes a way for co-operatives, friendly societies and mutual insurers to grow and develop their businesses while securing their commitment to member ownership and control. The Bill was formally introduced by Preston MP, Sir Mark Hendrick.

The Co-operatives, Mutuals and Friendly Societies Bill has been designed to meet a range of objectives.

For co-ops:

·      A new permanent share

·      An option for legacy reserves to be indivisible

For mutual insurers and friendly societies:

·      Tax neutrality for Mutuals Deferred Shares

·      An option for legacy reserves to be indivisible

For friendly societies:

·      Modernisation updates to 1992 Friendly Societies Act

It takes forward a key recommendation of The Ownership Commission and builds on similar legislation seen in other parts of the world. Second Reading will take place on Friday 28th October.

Mutuo’s Managing Partner, Peter Hunt, said, ‘This Bill seeks to amend the capital regime for co-ops and community benefit societies, to permit the injection of external capital, while securing their mutuality.  It also brings friendly societies law up-to-date and establishes tax neutrality for Mutuals Deferred Shares. Sir Mark’s Bill offers to enhance the operating environment for co-ops and mutuals so that they can continue to serve their members and offer more choice and competition in their markets.’

How do investors view the importance of sustainable business?

By Louis Attlee

The Global Mutual Leaders’ Symposium was held in London and Sydney on 8th September. It was an opportunity for leaders from both countries to come together to discuss mutual business purpose and how best to engage with the growing focus on ESG frameworks and investing.

After opening remarks from Melina Morrison, CEO of the Business Council of Co-ops and Mutuals in Australia and Peter Hunt, Managing Partner at Mutuo, a consultancy for co-ops and mutuals, the talks kicked off with Geoff Summerhayes, Senior Advisor of the Pollination Group.

Geoff spoke about how “fossil fuels are embedded in everything…” which must come out if net zero becomes more than a distant possibility. One of the running themes of the whole event was leadership, and Geoff honed in on this astutely, emphasising the need for management to take the lead on building buy in with members and communities.

Next was Jonathan Labrey, Chief Strategy Officer at The Value Reporting Foundation, the leading global standard setter for sustainability reporting. Jonathan outlined the history of corporate reporting frameworks, and he communicated how the different epochs of corporate reporting inform our current approach to the question.

Since the millennium, Jonathan argues, we have seen the transition from a scramble to include all global risks of a seismic nature into a framework, what he called the “end game phase”. Then came moves to incorporate the “six capitals” which represent the needs of all involved in a sustainable business environment. Currently, efforts are centered on moving away from thinking about ESG as a silo, to more of an overarching business strategy. Jonathan expects big things from COP26, where he wants to see solid steps towards global alignment on ESG reporting. We agree, and see a crucial part to play for co-ops and mutuals in contributing to this agenda, and not getting lost in intellectual debates which have preceded earlier conversations on ESG.

Barry O’Dwyer, Group CEO of Royal London Insurance, came after Jonathan, and he took more of a cautionary tack in emphasizing what he called a just transition towards net zero. Barry was careful to outline the need for good stewardship of this new agenda, “partly it is the right thing to do, partly because we need people from all parts of society to come with us on this journey.” We couldn’t agree more.

Barry has inherited a rich history of ethical investment at Royal London, which has the longest track record of ESG investments in the UK. By investing in the right businesses, who care about communities and the planet, financial mutuals such as Royal London play a big part in shaping a better future, while corporate competitors who are forced to comply to shareholder directives.

In a mutual bank, commercial success and customer prioritisation are the only two objectives of management, no shareholders means less pressure on management to deliver other objectives which exist with corporate competitors.

Louise O’Brien, CFO of Bank Australia also sees this as a major advantage. In terms of the operational running and marketing of Bank Australia, Louise simply commented that they don’t “try to compete with corporate competitors, we simply continue to raise our own standards…” On becoming a B Corp, Louise adds this transition “didn’t mean changing what Bank Australia was doing, it just meant communicating our strong track record as an organisation.”

Rohan Lund, CEO of the National Roads & Motorists’ Association, followed Louise’s contributions to the symposium who in true Aussie style, was uncompromising in how he described the core strength of coops and mutuals: they “Can’t be bought, can’t be bullied.”

Like all businesses coops and mutuals exist to make owners happy, but unlike competitors, the owners and customers of coops and mutuals are one and the same and of a much broader demographic of the overall population. This means they are at a structural advantage when taking on competitors, especially in the long-term.

Esther Kerr-Smith, CEO of Wealth and Capital Markets at Australian Unity was next. She argued that “lifelong wellness, economic empowerment, and community connectedness” are the three tridents by which Australian Unity conducts itself.” Also, the reality of no shareholders means these objectives are delivered, not just talked about.

Dialing in from Manchester, Ruth Woodall, the Sustainability Reporting Manager for the Cooperative Group, was sharp in her analysis of why standardized metrics are important to “make sure ESG is not just a box-ticking exercise”. She presented the Co-operative Group’s globally recognized sustainability report for the audience.

This is important given Colin Melvin from Arkadiko Partners UK was up next and used his experience of being involved in ESG from the get-go to explain why ESG needs to be driven by coops and mutuals so it does not become the new CSR. What we all need is evidence of change, towards articulation of actual impacts in the real world. Climate change action needs to find its “nexus in the space between governments and industry”, so words are matched to actions.

Jim Parker represents, Dimensional Fund Advisors, and was keen to emphasise the importance on maintaining good quality data, partly  because different ESG measurements do different things, but also so that coops and mutuals are proactive in aligning themselves and partners to ESG strategies.

Hans Georgeson, CEO of Royal London Asset Management, is clearly very excited by the change that is currently happening, but he is also keen to show this doesn’t mean business has to suffer as a result. It is important that “mutual asset managers remain profitable so that more dividends are transferred to financial mutuals, so that members continue to receive market leading financial products.” Hans is keen to move away from passive index tracking, towards ‘tilts’ which are meant to help partners who are willing to transition, but who maybe have a history with fossil fuels, for example. His three main tips for those involved in the ESG transition were; 1. Make your money count, 2. Make your votes heard at a board level, including actions such as divestment, and 3. Make sure to engage with staff and clients because they will reward you.

Hans, like the earlier speaker has worked for corporates most of his life. The transition, he describes, “coming from a PLC world to a mutual world is a breath of fresh air.” This still means marketing is essential, and “how you represent yourself in the market place in the UK must be in terms of longer terms profit horizons which can be fed back into services”, rather than relying on the ‘goodness’ of the business purpose. This tallies with Mutuo’s view, that co-ops and mutuals must prove their worth to society, rather than relying on the clarity of their purpose.

As announced at the end of the event, BCCM is launching its new ESG project for co-operatives and mutuals. The program will commence next month and I would like to invite your business to participate as a project partner.

Download the brochure

If you would like to talk to us about this, please contact melina.morrison@bccm.coop or peter@mutuo.coop.

The private equity threat to co-operatives and mutuals

As long as legacy assets can be appropriated, co-operative business will remain a target for demutualisation

Demutualisation occurs when a co-operative or mutual converts into a proprietary company.

The main justification given for demutualisation has been a lack of capital or scale that is not available to the business in its mutual form. Demutualisation inevitably alters a business’s corporate purpose. It will no longer be committed to delivering the best value to members and instead will join the majority of businesses as one that is focussed on delivering value to its investor shareholders.

The impact of demutualisations in the past has been to the detriment of members, particularly over the longer term. The requirement to service shareholder capital is a drain on business and means that there will be less money for members to benefit from. Short term payments for loss of membership rights are soon recouped through higher costs and lower benefits in a proprietary firm.

Beyond its own members, demutualisation also effects the wider industry and competition and choice. For markets to work for the benefit of all requires that the various corporate models each enjoy the necessary critical mass, defined as the degree of market share necessary to enable that model to operate successfully and thus to provide real competitive pressure on the other players within the market.

The lived experience of most demutualisations is that following conversion, board and executive management were quickly rewarded through increased remuneration and share options. The rationale for the conversion, that they needed additional capital to develop the business also fell away, as soon after, most business ceased to trade as independent entities as they were merged into larger consolidated groups. Of the few that remained independent, some saw their own spectacular collapses, as seen at Northern Rock in the UK and AMP in Australia.

Demutualisation is bad for members, for competition and choice and for market stability

Co-operatives and mutuals operate different business strategies, helping to mitigate against the overall risk of these firms in the sectors they operate, and therefore to the wider economy. It benefits economies if this diversity of risk means that businesses are not all chasing the same short-term business objectives, and risking a herd mentality, which if flawed, carries significant risk for the economy. The global financial crisis is testament to how differently owned and purposed businesses behaved.

Over time, co-operatives and mutuals consistently provide better value products to their members because their businesses are focussed on long-term plans enabling them to provide price competition against profit-maximising competitors. The existence of co-operatives and mutuals in markets dominated by proprietary competitors means that they are able to provide the only meaningful competition on the basis of service proposition and price.

Legislation can incentivise demutualisation

In many jurisdictions, legislation governing co-operatives and mutuals incentivises demutualisation. It does this by permitting legacy assets to be distributed. Legacy assets have been built up over generations of membership and often constitute a significant part of the working capital of the business. Current members usually have not contributed to this capital base but have enjoyed the benefits of previous years of successful trading.

In some countries, legislation does not permit the distribution of such capital. Instead, the capital must be used for the purpose intended by the original founders or otherwise transferred to a different co-operative or mutual organisation. In those jurisdictions where legacy assets are not available for distribution, demutualisation is extremely rare and as a consequence, large co-operatives and mutuals maintain their member ownership, reflecting significant mass in a range of markets.

In some countries such as the UK and Australia, however, there are no legislative restrictions on the distribution of assets and as a result, waves of demutualisation have occurred, starting in the late 1980s and 1990s. In these countries, in order to protect legacy assets and the purpose of the business, co-operative and mutuals often adopt constitutions which require a high threshold member vote to permit a transfer of ownership. This works to an extent as a deterrent to demutualisation but is vulnerable to rule changes.

The process of demutualisation

Demutualisation has typically been proposed by boards of directors of co-operative and mutual businesses. It is extremely rare for a demutualisation to be proposed by members although the exception to this would generally be in agricultural co-operatives where there is more of a direct link between the membership and the original investment in capital.

The favoured method for demutualisation in these jurisdictions is to transfer the co-operative or mutual into a proprietary company, either with shares allocated to existing members or alternatively, compensation paid for the loss of membership. In this way, members are rewarded to vote for the transfer.

This compensation paid rarely reflects the underlying capital value of the business. In fact were it to do so, it would remove the logic for the transfer, which is to gain control of underlying capital assets. It is common therefore for this payment to reflect the perceived value of membership, or in other words, the amount that the board estimates is necessary to pay members to vote for the conversion.

A less common but equally effective route to demutualisation, involves the sale of the mutual to an external entity. This is much more frequently used in the United States, where the process is formalised and is known as a sponsored demutualisation. As such it has more in common with a hostile takeover bid, though in many cases the external approach is supported by the co-operative or mutual’s board.

One such example is the current live transaction involving Liverpool Victoria (trading as LV=, a mutual insurance company based in the UK) and Bain apital, where the business was put up for sale and Bain was selected as the purchaser, thus necessitating a full demutualisation. Prior to the sale being offered, LV= altered its constitution to remove the ‘poison pill’ high demutualisation threshold. At the time of this change, members were assured that there were no plans to abandon the mutual status of the firm.

It is clear from this experience that the continued protection of legacy assets can only be assured through legislation. Co-operatives and mutuals should have the opportunity to choose a form of constitution that cannot permit the distribution of legacy assets. Members would remain entitled to the share of capital to which they have made a contribution, but no more. We expect that this would successfully remove the incentive to demutualise.

Private equity: a clear and present threat

The interest that Bain Capital is showing for the UK mutual insurance sector reflects the evident motivation private equity sees in accessing assets built up within co-operative and mutual businesses. Separately, JC Flowers, which had previously driven the demutualisation of Kent Reliance Building Society has joined with Bain Capital to bid for the Co-operative Bank, which was demutualised and sold to hedge funds in 2014.

These moves by global private equity reflect a clear and present danger to well capitalised co-operatives and mutuals. Demutualisations will be attractive where assets are held, and stakeholders can be persuaded to walk away. Fundamentally, the legacy capital assets belong to past generations, current generations and future generations of members and were never intended to be distributed at one moment in time.

Fundamentally, the legacy capital assets belong to past generations, current generations and future generations of members and were never intended to be distributed at one moment in time.

We recommend that co-operatives and mutuals ensure that they have contingency plans in place for any hostile interest from global capital funds and take appropriate action before this becomes a trend:

• Ensure that a defence strategy is in place in advance of any approach being made
• Establish a strong member value proposition to contrast with any approach
• Maintain strong constitutional requirements to guarantee high member voting thresholds
• Join with others to lobby for legislative change to disincentivise the raiding of legacy assets

Peter Hunt is Managing Partner at Mutuo.

Talk to Peter@mutuo.coop if you would like to discuss this further, to equip your business to repel approaches from capital funds.

Mutual, fan ownership in football

The European Super League was the inevitable result of government inaction on football club ownership

The debacle of the European Super League once again brings to the fore the troubled question of football club ownership.

Established as community groups over a century ago, many professional football clubs have morphed into big businesses that are now focused entirely on revenue and profit opportunities.

The handwringing from English football authorities over the proposed breakaway was a bit late in the day. It should be no surprise to them that the corporatisation of football would lead to this.  The warning signs have been there for years, with landmark issues from the public listing of football clubs through to the purchasing by oligarchs and hedge fund investors.

These are people who are interested in finding an investment rather than supporting the sporting endeavours of a club for its own sake.  Their ownership of a football club is not just foreign based on their nationality, but on their personal objectives for the club.

It is a financial transaction pure and simple, as evidenced by their desire to do away with the jeopardy of competition. This is incompatible with football ownership and should rule them out as unfit to be proprietors of clubs.

The problem is deeper than the super league participants, however. The arrogance of football owners ignoring the interest of the clubs’ fans has long been a problem. Even as consumer businesses, they have failed to nurture and support long-term relationships with their customers. With a few exceptions, clubs are subject to a merry-go-round of fortune, depending on how benign the current owner is.

It is significant that no German club participated in this circus. Bundesliga rules insist on 51% supporter ownership of their clubs. They do not and never will exist as vehicles for investment, because they are rooted in their communities.

It’s over 20 years since we set up Supporters Direct in the UK and progress is glacial. We have some fan owned clubs and board representation, but it has been hard fought on an individual basis. This is because real reform has not happened either from football authorities or government. Leaving it to the fans can only go so far if the odds are stacked against them.

The UK government is now reviewing this again. Maybe change will happen but that means facing down the big money.  Real reform is regulation of how clubs can be treated as investment commodities and fan control as exists in Germany. 

In 2014 the All-Party Parliamentary Group for Mutuals made many of these points to the Football League, the Premier League, UEFA and the government. It said that the prevailing attitude on ownership was problematic then and it is now proving to be disastrous.

It made a number of recommendations, none of which have been acted upon. Had they, we would not be in this situation today. Its recommendations were:

  • Football authorities should undertake a joint study of football club ownership in other countries, including for example the Bundesliga, in order to understand the effect that different ownership structures have on the corporate behaviour of football clubs.
  • Football authorities should adopt a policy of promoting supporter involvement and ownership in football clubs as a strategy for building trust and confidence for the long term.
  • The Football industry should pay for the work of Supporters Direct (now within the Football Supporters Association) on the basis of a fixed percentage levy on transfer fees. This could also cover other community activities and remove the self-interested discretion from the decision-making processes.  
  • FA and League rules should be altered to protect the legacy assets of football clubs. (club colours, club name, home ground ownership and the rights to securitise assets).   If this does not happen, Government should legislate to include such protections and to extend the right to bid for community assets to a right to buy for supporter groups.
  • The Government should consider legislating for the changes it wishes to see in the ownership and governance of the football industry. (e.g.to protect minority supporter stakes in the case of a compulsory purchase order).

It is important to drive home the issue of supporter ownership to protect and maintain the fundamental purpose of a football club. Which is, for the avoidance of doubt, to play football- competitively- for the entertainment of supporters.

None of these issues are new and for years, Government has treated the football authorities with kid gloves by ignoring serious proposals for giving fans a say in their clubs. Inaction has consequences.  This time, there can be no excuses.

Peter Hunt from Mutuo
Peter Hunt is Managing Partner at Mutuo

Potential sale of LV= to Bain Capital

The All-Party Parliamentary Group (APPG) for Mutuals is today [8th February] announcing an inquiry into LV=’s recent decision to sell to Bain Capital.

LV=, one of Britain’s biggest financial mutuals, founded in 1843 and trading for most of its life as Liverpool Victoria, is well known across the UK.

The inquiry will consider whether LV=’s proposals are good for policy holders, for competition and for the business.  LV= has itself described the deal with Bain as “an excellent financial outcome for all of our members.”

Launching the inquiry, Gareth Thomas, MP for Harrow West and Chair of the APPG said:

“Members of the parliamentary group are concerned at what impact the sale will have on LV= members, the insurance industry and competition and choice in financial services. We are also interested in whether the LV= decision reflects weaknesses in the Government and regulators’ views and support of mutuals.”

The APPG will seek evidence from mutual sector experts, financial analysts and from LV= itself.  The Group is keen to hear from other individuals and organisations and with an interest in this Inquiry. The deadline for the submission of written evidence is Friday 5th March and the APPG plans to hold a number of oral evidence sessions in the first quarter of 2021, before publishing its inquiry report. Evidence can be submitted to the APPG Secretariat at appg@mutuo.coop

Inquiry Terms of Reference

The APPG will consider, and is keen to understand:

  1. The context of why at this time the status quo is not good enough, given LV=’s brand strength, capital and momentum.
  2. The impact that the sale will have on LV=’s members, the insurance industry & the implications for competition & choice in financial services more widely.
  3. The rationale that supported the decision by the Board of LV= to sell the business to Bain Capital, and whether other options were considered fully.
  4. The motivation behind LV=’s recent conversion from a friendly society to a mutual company, including how this is connected to the proposed demutualisation.
  5. The wider legislative framework for Friendly Societies and Mutual Insurers, with a particular focus on barriers to raising capital, protection from demutualisation and attitude of Government and regulators.

Free Webinar: Policy Guides for Co-operatives and Mutuals

Over the past decade Mutuo has produced a series of policy guides, helping to improve the business environment for co-operatives and mutuals.

As a central part of a communications plan, these guides improve lobbying by sharpening our messages and by clarifying our joint objectives.

They have had a real impact, leading to better relations with government, new policy initiatives and improvements to legislation.

The guides have been produced for national representative bodies in the UK and Australia, and for global business sector bodies such as the International Co-operative Alliance and ICMIF.

In this presentation, Mutuo’s Mark Willetts sets out how and why these guides were created, how they help to influence, and what they have achieved.

So please check out the webinar,  if you’d like more information about how we can help you, please get in touch.

UK Parliament considers new co-operative capital Bill


A new Bill will be introduced in Parliament today [Wednesday 5th February 2020] which aims to facilitate more capital investment into co-operatives. The Bill, brought forward by Cardiff North MP, Anna McMorrin, will be read for a first time in the House of Commons on Wednesday 5th February.

The Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill proposes a way for co-operatives 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.

The Bill also introduces new provisions including an option restricting the demutualisation of co-operatives into companies and the distribution of their legacy assets.

It takes forward a key recommendation of The Ownership Commission and builds on similar legislation seen in other parts of the world.

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.’

A Manifesto for Mutuals: 2019 General Election Policy

Since the last General Election, UK Mutuals have enjoyed continued and welcome all-party political support. 

But there is much more to do to ensure that these important businesses can play a greater role in our economy and society and help to build a fairer country. 

By its policy, legislative and regulatory actions, the next Government can enable these businesses to fulfil their potential and deliver a wide range of public policy objectives. 

In this election, we call upon each of the political parties to promise to adopt our plan for action:

1. Recognise and support the value of diverse forms of enterprise in the UK economy 

2. Ensure that policy, legislation and regulation works to provide a fair business environment for mutuals: 

• Greater recognition and policy understanding of the sector by national and devolved politicians 

• A commitment to an enabling legislative environment for the sector in the UK 

• An understanding of where inappropriate regulation affects the sector and a commitment to address this where it occurs 


3. Work with Mutuo and other sector bodies to implement the objectives of the UK Mutual Economy Report 2019

Download the Manifesto

Mutuo launches new influencing strategy for consumer co-ops

Mutuo has launched a new influencing strategy document for consumer co-operatives. The policy guide, co-produced with Consumer Co-operatives Worldwide [CCW], makes the case for consumer co-ops and demonstrates their importance to the global economy and wider society.

The document sets out a number of ways in which a better policy environment for consumer co-ops could be created, including:

  • Adoption of the 2002 UN recommendation that governments should support co-ops
  • Ensuring government departments and ministers are sufficently skilled to work with co-ops
  • Improving education about co-ops
  • Adopting the legal principle of ‘indivisible reserves’ to safeguard co-op assets
  • Legislating for new co-op capital raising instruments 
  • Permitting more cross border trading for co-ops 
  • Better collection of statistics nationally and internationally 

Speaking at the launch of the guide in Moscow, Mark Willetts said: 

“We want to ensure the best possible business environment for consumer co-ops. These businesses are the original type of co-op. They provide significant competition for consumers and drive up standards of safety, quality and sustainability. CCW’s guide sets out a number of key measures that should be adopted to ensure this sector continues to grow and thrive.”

The document is the latest in a series of policy guides that Mutuo has co-authored in order to boost the international co-operative and mutual sector, having previously published guides with ICMIF, AMICE, the ICA and Australia’s BCCM.

Download the guide

To find out more about CCW, click here.

Purpose-driven businesses top £130 billion income per annum

Purpose-driven businesses top £130 billion income per annum

Co-operative and mutual businesses account for over £133.5bn of income annually and touch the lives of 1 in 3 people in the UK, according to a new report published by the All-Party Parliamentary Group for Mutuals.

These businesses have a distinct purpose to serve their customers and communities, in contrast to investor owned firms.

Mutuals exist in every sector of the economy, from financial services to housing, to food retailing, to public services and sport. Whether it is through supplying affordable and sustainable services to consumers, providing rewarding work or strengthening community enterprise, a strong network of co-operative and mutual businesses plays an important part in a diverse and modern British economy.

The report shows significant income from each of the various sub-sectors of the co-operative and mutual sector:

from co-operatives:£36.1bn
from building societies:£5.8bn
from friendly societies & mutual insurers:£19.6bn
from housing associations:£20.0bn
from NHS foundation trusts:£52.0bn
Total:£133.5bn

At a time when Brexit dominates the UK policy agenda, mutual businesses are continuing to grow – creating an economy and society that works in the interests of the widest number of people by sharing power in, and the rewards of, business.

Mutuals help to deliver a wide range of public policy objectives. They:

  • Strengthen a UK owned business sector
  • Spread wealth more broadly and fairly throughout the country
  • Provide competition and choice for consumers in a range of markets especially those for essential goods and services
  • Create diversity in business, withbusiness strategies for a healthy, balanced economy that take a longer-term view and act as a counterbalance to mitigate systemic risk to the economy
  • Create business structures for public service providers that keep them accountable to their users and taxpayers, reducing centralisation and bureaucracy
  • Provide more than just an economic benefit to local communities by aiding social bonding and stakeholder empowerment
  • Rebuild and maintain public trust in business

Published today, the UK Mutual Economy Report makes a number of policy recommendations for increasing the contribution of co-operative and mutual business to growth, prosperity and fairness.

The All-Party Group calls on all parties to encourage:

  • Greater recognition and policy understanding of the sector by national and devolved politicians;
  • A commitment to an enabling legislative environment for the sector in the UK and
  • An understanding of where regulation disproportionately affects the sector and a commitment to address this where it occurs

Parliamentary Group Chair Gareth Thomas MP said:

Whether it is through providing rewarding work, strengthening community enterprise, or supplying affordable and sustainable services to consumers, this report clearly shows that a strong network of co-operative and mutual businesses plays an important part in a diverse and modern British economy.”

View the report

Australian Parliament passes reforms for co-operatives and mutuals

On Thursday the Australian Parliament passed the Treasury Laws Amendment (Mutual Reforms) Act 2019.

This is the culmination of three years work by Mutuo, the Australian Business Council of Co-operatives and Mutuals and an unprecedented collaboration between mutual businesses across industry sectors.

It is a major step forward for Australia, delivering new landmark legislation and the first positive change to the Corporations Act for mutuals in 18 years.

• The mutual definition in the Corporations Act now identifies the importance of the sector as part of a diverse economy.
• New mutual capital instruments will facilitate growth and innovation of mutuals helping them to compete with listed businesses.
• All of this achieved whilst mutuality is safeguarded for future generations by ensuring member control remains paramount.

Mutuo’s Chief Executive, Peter Hunt, said:
“This success reflects the willingness of the Australian sector to work positively and provide leadership for mutuals. The story in Australia is inspiring. In just a few years, the way mutuals are seen and understood by the government and opposition has been transformed.”

“We have also enjoyed ongoing and sustained support across the political landscape, from the government as well as opposition parties. The Australian sector has shown how a well executed strategy can deliver real improvements to the business environments for co-operatives and mutuals.”

Find out more about the Act.

Launch of updated BCCM Sector blueprint

We’re pleased to announce the launch of the updated Business Council for Co-operatives and Mutuals [BCCM] Sector blueprint.  Conceived and produced by Mutuo, BCCM’s updated strategy document reflects the success of its advocacy over its short history as well as the new priorities of the Australian co-operative and mutual sector.

View the document

BCCM-Mutuo Advocacy App

We’re proud to announce the launch of the new Business Council for Co-operatives and Mutuals [BCCM] Advocacy App. The App is the first of its kind and represents a deep collaboration between the BCCM and Mutuo.

For the first time, a national peak body for co-operatives and mutuals has taken the step to communicate with its members in a new and innovative way.

The App, which is available only to BCCM members, provides a quality new service to the membership. The App’s simple format allows members to access key talking points, news and briefing from across the entire co-operative and mutual sector in Australia.

For example, if called on to speak about the benefits of mutuality in your sector the App can provide key talking points and statistics at the touch of a button.

We think this a great way for the co-op and mutual sector to get its message out and we’d love to help you develop a similar App in your country.

Talk to us today about how we can help produce an App for you.

Mutuo project delivers draft legislation for Australian mutuals

On Monday the Australian Government released a second draft Bill to create a new capital instrument for co-operatives and mutuals.

The new legislation when fully enacted will allow co-operatives and mutuals to raise capital and compete on a level playing field with investor-owned firms. The first of the two Bills will be introduced into Parliament in the first week of December, and the second in February 2019.

Peter Hunt, Mutuo’s Managing Partner said, ‘This is the culmination of three years work with the Business Council of Co-operatives and Mutuals (BCCM), building on a carefully designed and executed political strategy.’

Success in this project will mark the seventh time that Mutuo has brought about the enactment of new legislation to improve the business environment for co-operatives and mutuals, in different jurisdictions.

BCCM Chief Executive, Melina Morrison said, ‘Today we are delighted to see the final tranche of draft legislation that will help to deliver on the Government’s promise to our sector. The bipartisan nature of this process has been very encouraging.

This will enable co-operatives and mutuals to grow and better serve Australians, whilst protecting their co-operative or mutual ownership structures.”

The consultation can be viewed here:

Treasury Laws Amendment (Mutual Entities) Bill 2018: 

Australian government publishes draft legislation for mutuals

  • Mutuo partnership with BCCM delivers first ever Federal legislation for mutually owned businesses
  • Draft Bill opens for consultation ahead of introduction in Parliament in November
  • Treasury announces a second Bill will follow to introduce new capital raising instruments

Following three years’ work with the Business Council for Co-operatives and Mutuals (BCCM), Mutuo has today welcomed the publication of draft legislation that begins the process of modernising the Federal law for mutual businesses in Australia.

The legislation forms the first part of a two-phased approach to improve the business environment for mutually owned firms and improve their ability to compete on level terms with investor-owned corporations.

The draft legislation provides a definition of a mutual entity to recognise the sector in the Corporations Act and to determine which companies will be able to raise capital through the issuance of mutual capital instruments.

It also addresses the uncertainty in Part 5 Schedule 4 of the Corporations Act to enable mutually-owned credit unions and banks to raise capital by providing that the enhanced demutualisation disclosure requirements are only applicable where an entity no longer meets the definition of a mutual entity.

Mutuo Managing Partner Peter Hunt said,

‘This is a big day for Australian co-operatives and mutuals. It is the result of Mutuo’s careful strategy to influence government, which has been deployed with a leading group of 13 Australian mutual businesses through BCCM.

BCCM was only created in 2013.  In five short years, under the inspiring leadership of Melina Morrison, it has successfully brought together mutually owned businesses from across Australia to take their rightful place on the Australian business stage.

It has made the case for an improved business environment, first gaining political support in the Australian Senate, and now resulting in landmark legislation from the Federal Government.  All the time, this has been achieved with the enthusiastic support of politicians from across the political spectrum.  It is a case study in influence for the global co-operative sector.’

More homes; more voice – Member-based social housing

Cliff MillsIn his latest Mutuo think piece, Cliff Mills talks about the policy opportunity for mutual social housing.

There are two clear challenges for social housing today which are making it one of the top political priorities.

The first is the need to build more homes: homes that people can afford, and are of the quality that people want to live in.  The second is to give tenants a voice in how housing is provided, which includes the ability to have influence over things that impact on neighbourhoods and communities, and being able to use this voice as a mechanism for ensuring that social housing providers are accountable to communities.

Housing is more than one issue.  It cannot be separated from jobs, health and well-being, elderly care, fuel poverty, environmental issues, community safety, education and training, and much else besides.  Homes are part of neighbourhoods and have to be understood in their context. The success of housing can only be measured in this bigger context, and in interaction with that context.

Policy-makers can and should do what they can, seeing things from their strategic vantage point. But since 2000 there have been some radical developments from within the social housing movement itself which it is time to take note of, because they could make a significant contribution in meeting today’s challenges.

These developments involve a democratic member-based approach, giving individuals a voice in their organisation, sharing power beyond the board and senior executives, and at the same time making governance more robust. 

There are now eleven democratic member-based housing providers in England and Wales, which together provide over 85,000 homes. A recently released corporate strategy by one of these organisations (discussed further below) outlines how it will be delivering services and what its ambitions are over the next ten years. This document provides evidence of the relevance of this approach in meeting today’s pressing challenges.

Read ‘More Homes More Voice’

Mutuo working with Consumer Co-operatives Worldwide to develop business sector policy guide

Mutuo is developing a business sector policy Guide for Consumer Co-operatives Worldwide.  This will be an opportunity to address regulatory, legislative and policy barriers to the development and growth of consumer co-operatives around the world.

Its principal use will be to develop coherent policy positions that can be used at a global, regional and national level.

Detailed survey work of CCW members will begin shorty and we look forward to engaging with members to identify the priorities of the consumer co-operative sector.

The document builds on Mutuo’s previous policy work in producing the International Co-operative Alliance Global Manifesto in 2017.

The business sector policy guide will be published in summer 2018.

Consumer Co-operatives Worldwide (CCW) unites, represents, and defends the interests of 26 national organizations of consumer co-operatives around the globe, which represent 75 million individual members, and which register a combined total annual turnover of more than 500 billion EUR.