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Co-operative Bank ≠ co-operative banking 7 November 2013

Posted by cooperatoby in cooperative, Social enterprise.
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new ICA logoThe Co-operative Party, Brussels, has just written to the Party’s General Secretary to remind everybody that co-operative and ethical banking is alive, well and of steadily growing significance.

Dear Karin,

Thank you for your message on Monday [see below] about the Co-op Bank. Our branch met to discuss the issue.

We have noted with puzzlement the silence on the matter from both the Co-op Party and the Labour Party, presumably so as not to “scare the horses” while the negotiations were under way. You have attempted to reassure us that co-operators’ values as well as assets are safeguarded, but it seems rather defensive. We think that now the movement should be much more visible.

Our members have their own interests of course, with substantial savings on deposit with the Co-op Bank and as Co-op Group members. We realise that as a fraction of the £1.5 billion this is a drop in the ocean, so individual shareholder activism seems futile. We hope that the ‘Save our Bank’ campaign may yet achieve change through co-ordinated action.

We reckon that the Bank’s new owners understand that its ethical stance is its best marketing asset, so will not want to degrade it. Nevertheless the closure of branches and laying off of staff already hints at asset stripping. We are concerned, without being disloyal to the movement’s institutions, that our funds should be invested to achieve positive social change.

Now the die is cast, we think there is an opportunity to go beyond damage limitation and focus attention on the positive side of co-operative banking. Co-op banking goes well beyond the UK retail movement’s own bank, and is a significant force in Europe’s banking sector with around 20% of the retail market. As well as being well-rooted, it is an innovative force, as the example of Italy’s Banca Etica shows.

In Britain Stella Creasy has done some excellent work on credit unions and payday lenders. Fair Finance (not strictly a co-operative but that other sort of IPS, a society for the benefit of the community) shows what can be done to improve financial inclusion. Community shares – supported by the Co-operative Loan Fund – are taking off, with the Westmill wind and solar co-ops raising over £4 million each through public share offers, and over 400 offers on the database. This shows that there is a massive fund of ethical investors waiting to be given principled uses for their savings.

We therefore feel that the Party should accentuate the positive by drawing more attention to these diverse forms of member-controlled financial institutions.

Yours sincerely,

Toby Johnson
Secretary, Co-operative Party, Brussels

Letter from Karin Christiansen to Co-operative Party members, 4 Nov 2013

Dear Member

You will have seen the announcements made today by the Co-operative Group on the steps they have taken secure a future for the Co-operative Bank. Further detail can be found on their website here.

There is no doubt that these have been challenging times for the Bank and the Group but I know that Party members will want to support the aims of the plan set out today – ensuring the Bank’s survival and enshrining its ethical values in its constitution.

For our part, the role the Co-operative Party is as important as ever before: promoting and defending our movement, values, principles and model. All of us will need to work hard to ensure that current events are not used to call co-operation into question or to undermine the co-operative and mutual sector as a whole.

The Party was created in 1917 to bring co-operative values and principles into politics and the wider public policy debate. Today, co-operative ideas have never been more pertinent to the social and economic challenges Britain faces – community and co-operative energy as an alternative to the ‘Big 6’; co-operative schools which put teachers, parents, pupils and the wider community at the heart of their governance and credit unions as an alternative to payday lenders. The Co-operative Party will continue to work with the movement to champion co-operative ideas and make the case for co-operation.

The economic benefit of our movement is undoubted. Co-operatives UK recent work shows that the sector has grown by 20% since the start of the recession in 2008. Their research shows that co-operatives continue to deliver higher levels of consumer trust, employee productivity, innovation and importantly, financial resilience than limited companies.

So, we have much work to do together. The first step in that will be to spread the word about the value of co-operation, click on this link to forward this message to a friend.
Yours in co-operation,

Karin Christiansen
General Secretary, the Co-operative Party


1. Valerie Wilkinson - 25 November 2013

How likely are hedge fund managers to “co operate?” Surely they will be calling the shots,and aiming for profits before people,regardless of ethical policies-that requires patience!

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