Contribution
It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) for his work in securing this important debate. It has been a real pleasure to hear contributions from all the Labour and Co-operative party Members this afternoon.
The current economic landscape is challenging for our businesses and industries. Years of dire economic mismanagement by the last Conservative Government have led to businesses, including co-operatives, facing huge challenges, ranging from recruiting and retaining staff to soaring energy costs. Those issues have been exacerbated by the increase in trading obstacles following the last Government’s botched trade agreement with the EU. However, many of those challenges are now being compounded by decisions taken by this Government.
Co-operatives are owned by and run for the benefit of their members. As the Liberal Democrats have always believed in empowering individuals to engage in decisions that impact their lives, we are supportive of the co-operative sector, credit unions and non-profit financial institutions owned by their members. The co-operative sector is made up of more than 10,000 enterprises across every sector and region, from local community pubs and credit unions to building societies, mutual insurers and retail societies. Together, they represent one of the most resilient and values-driven parts of the UK economy, rooted in communities and owned by their members.
The Liberal Democrats believe that employee participation in the workplace, together with wider employee ownership, is important for diffusing economic power, promoting enterprise, increasing job satisfaction and improving service to customers. Co-operative enterprises offer considerable potential for member and employee involvement and are an important part of a modern mixed economy.
In the recent “Backing your Business” plan, published in July 2025, the Government committed to growing the co-operative and mutual sector over this Parliament, and launched a call for evidence on how we can support the sector and its businesses to grow. The Liberal Democrats support that ambition, but will the Government be more decisive in their support by acting on some of the recommendations of Co-operatives UK, such as on access to finance, which would expand the possibility for many of these organisations to scale up. Co-operatives often struggle to raise capital because, by virtue of being member-run organisations, they are more limited than companies in issuing shares that are attractive to external investors.
Often, co-operative enterprises provide fairer workplaces; they are four times as likely to be living wage employers, and women lead nearly a quarter of the UK’s top 100 co-operatives—more than twice the proportion in the FTSE 100. Meanwhile, although women earn 12% less on average than men across the UK economy, that figure is reduced to 7.5% within co-operatives. Community-owned pubs are also on the up, with a 51% increase over the last five years, and a 13% increase in the last year alone.
However, training, hiring and retaining a skilled workforce are issues that affect businesses of all kinds across the country. The Liberal Democrats therefore welcomed the industrial strategy this summer and the commitment to an increase in skills and training. The apprenticeship levy does not work, and many businesses cannot get the funding they need to train staff, with hundreds of millions of pounds of funding going unspent. The Liberal Democrats have been calling for the apprenticeship levy to be replaced with a wider skills and training levy, which would give businesses flexibility over how they spend the money to train their staff. We therefore welcome the intention to reform the levy and replace it with a broader growth and skills levy, but we have concerns about moving funding away from level 7 apprenticeships, which we know increase social mobility.