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:

• 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.’

So now we know what the EU negotiating position on Brexit will be. To be fair, anyone could have guessed it, but here on Planet UK we are expected to be surprised.

The level of British self-delusion on the realities of this divorce are going to take some time to overcome. After all, the whole basis of the referendum was forged out of misinformation about the EU. People here will talk seriously about bendy bananas, benefit tourism and uncontrolled immigration, none of which are real things.

The referendum campaign did little to illuminate the general public, with a strong media campaign reinforcing negative EU stereotypes and impossible promises for an ‘independent’ UK written on the side of buses.

As Progressives we must take our share of responsibility for the lacklustre Remain campaign, but also for years of failing to counter the anti-European propaganda that is fed to the British public on a daily basis.

All of this is well known among our friends in the EU. The question is how British Progressives should respond next.

If we just look at a handful of the conditions of the 27, we can see how soon reality is going to collide with the fantasy world of Planet UK:

-We expect that EU citizens rights will be quickly agreed – this can be presented positively as the UK citizens in the EU will benefit equally.

-The single financial settlement is much more problematic, as it is a key tenet on Planet UK that we ‘won’t pay a penny.’ The absurdity of this position will be laid out shortly as the list of commitments are identified, at which point the huge likely cost of 40-60 billion Euros needs to be accepted to move forward.

-A ‘soft’ border with Ireland sounds ideal in principle, but will potentially produce an anomaly that makes a farce of leaving. Expect this to re-ignite long held animosities in Northern Ireland.

-The location of EU agencies are to be in the EU. Expect UK media to scream about ‘punishing’ the UK. Louder if this extends to the Euro clearing system, which looks inevitable.

-Ongoing jurisdiction for the European Court of Justice – this is guaranteed to make the arch-Brexiteers foam at the mouth. Expect a disproportionate and incoherent response from the UK.

Progressives should urgently provide leadership, yet the Labour Party position since the referendum has been a disaster. Despite an unequivocal pro-European policy platform, and with most Labour voters and virtually every Labour MP supporting Remain, the Labour Parliamentary response to Brexit has been muddled, contradictory and ultimately self-harming. Labour proposed a number of amendments to the Bill enacting Article 50, including a unilateral guarantee of rights for EU citizens in the UK and crucially, a meaningful vote in Parliament on the final deal; all were defeated by the Conservative majority.

Inexplicably, Labour then voted with the Government after the amendments failed, allowing the article 50 Bill to pass with a massive majority and feeding the folklore that there is a popular majority support for the UK Government’s idea of a hard Brexit.

The logic was that Labour would pacify the Labour supporters of Leave, who it feared would desert them for UKIP or the Conservatives in Midlands and Northern Labour constituencies. More likely, their tactics in Parliament will instead have disillusioned ardent Remainers who are now considering lending their vote to the Liberal Democrats, who have been steadfast in their opposition to the Government’s position.

This all adds to the serious challenge Labour faces in the General Election, and on current polling, is likely to face severe losses.

So is there any chance of a Progressive response to Brexit? In many ways, one could say that this situation has to get worse before it can improve. Labour will inevitably be weakened by the election, but after that, it has the chance to take a principled stand against a hard Brexit, though its influence and power will be much diminished.

In the meantime, former Prime Minister Tony Blair and others have called for voters to only support candidates (of any party) that have an open mind on the final deal for Brexit. This is unprecedented, and may have little effect on who is elected, but it may deliver a few more MPs who are prepared to insist on being able to intelligently consider a final deal before it is adopted.

The fact is that sooner or later, the UK will have to face the realities of the divorce, and it remains to be seen how the public will respond to the cold, hard, truth of leaving.

This article was first published in The Progressive Post

Mutuo has today launched the Mutual of Mutual and Cooperative Capital at the Quebec International Summit of Cooperatives.

The project has launched after a year of close work with our partners, Charles Taylor PLC.

Introducing MoMaCC 

Mutuals and cooperatives of all sizes need to raise capital. They also need to make secure investments to deliver returns. It is proposed to create MoMaCC as a new mutual to meet these needs. 

MoMaCC’s members and investors will themselves be mutuals and cooperatives. The board of directors will be drawn from the membership.

It is believed to be the first time that mutuals and cooperatives will be able to securely raise capital through an institution that they collectively own and control.

Who will create and manage MoMaCC? 

MoMaCC will be created by two businesses with a history of working with mutuals and cooperatives – Mutuo and Charles Taylor plc. Mutuo is an independent consultancy that works internationally with mutuals and cooperatives, particularly in relation to legislation and policy.

Charles Taylor plc is a professional services provider which has managed mutuals for over 130 years. The Group currently manages four mutuals and advises a fifth.

The opportunity 

Mutuo and Charles Taylor are approaching a small number of leading mutuals and cooperatives to become the founding members of MoMaCC. Founding members will join the initial board of the mutual, controlling key decisions including quality control of membership, investment criteria and areas of operation.

Longer term the membership of MoMaCC will be open to any cooperatives or mutuals that meet the due diligence and other quality criteria set by the board. The initial membership will focus on entities within the International Co-operative Alliance (ICA) top 300 plus other mutuals of similar standing.