Co-op and Britannia Merger – Vote yes, But…

Voting papers have gone out to members of Britannia Building Society to approve the merger with the Co-op Bank, which should be ratified at the meeting on 29th April. See: Co-op – Britannia Merger . The new Bank, with assets of £70 billion, will be a part of the Co-op Group. In light of the financial crisis hitting Capitalist Banks, the merger joining together two organisations that have largely kept clear of the chaos around them, and which have links to the Labour Movement is to be welcomed. As the International Co-operative Association put it in their submission to the G20,

“At the same time, those same world’s citizens know that there is an alternative secure, stable and sustainable model of business owned and controlled by 800 million people worldwide. It is true to its global values and principles of self-help, sustainability, community ownership and control, democratic participation, fairness and transparency. It is a model of business that is not at the mercy of stock markets because it relies instead on member funds for its value; and is not subject to executive manipulation and greed because it is controlled by local people for local people. It is a business where the profits are not just distributed to its shareholders,but are returned to those who trade with the business, thus keeping the wealth generated by local businesses in the local community for the good of the local environment and families.

This is the co-operative sector of the global economy which employs 100 million people worldwide. It is no coincidence that the world’s most successful and stable economies generally also happen to have the world’s most co-operative economies.
It is also no coincidence, that those co-operative businesses that have stayed faithful to cooperative values and principles, are the same businesses that in recent weeks have benefited from the flight of deposits and bank accounts from the failing and collapsing investment houses and banks – an acknowledgement of the continuing trust with which they are endowed by the general public.”

See: ICA Open letter to G20

Of course, not all mutual Building Societies performed so well as the collapse of the Dunfermline Building Society shows, which seems to have engaged in some of the same risky operations that other Banks such as Northern Rock came to grief on. Its Chairman, who presumably was responsible for those actions, now has the nerve to criticise the Government for not bailing him out for those actions. The best thing would be for the Co-op to pick up the healthy bits of the business. In fact, the best thing would be for the merger with Britannia to be just the first step in a process of bringing all the Mutual Financial organisations under the auspices of the Co-op Bank. With one proviso….

The example, of the Dunfermline shows that the principle of a Co-operative Bank is only as good as the actions of its members to ensure that the Bank acts in a way that is responsible, and in the interests of the millions of workers who own it. The problem with all of the Co-operative and Mutual sector is that just as few workers take part in their Trade Union, so too few workers take an active part in controlling the Co-op and Mutual organisations, of which they are the owners. That is why members of the Britannia should vote yes to the merger, but workers must begin to take an active part in controlling the new organisation. The Trade Unions themselves have a large role to play here. The Trade Unions need to mobilise their active members to also take an active part in the meetings of these organisations. More than that the Labour Movement needs to take an active part in democratising these organisations. At the moment the democracy within them is purely formal, often members are presente with a fait accompli – Vote for or against this or that resolution, this or that Board Member. For example, I’ve been unable to find out from the Co-op Members website where my Local Area is, or who the representatives are. Last time I checked the nearest meeting was somewhere in Wales, and I live in Stoke!!!

Even so this lack of democracy does NOT make the Co-op a state capitalist institution as Bill Jefferies of Permanent Revolution suggested to me some time ago. For one thing its not owned by the Capitalist State! Its owned by workers. It is directly parallel to the Trade Unions which are also workers organisations, but which need a root and branch democratisation. The two things go together with the need to rebuild the Labour Movement including the Labour Party from the grass roots upwards. Its not going to be easy, but there is no shortcut.