From banking to radical bookselling

Interesting news comes through from Southampton, where the very long-established radical bookshop October Books has just raised the funding to purchase an old branch of NatWest, enabling it to move to larger premises and create extra space for community activities. The purchase has come about following a very successful campaign to find almost half a million pounds, which has included community loan stock, crowd funding, personal loans and gifts, and a loan from Co-operative & Community Finance (whose press release has alerted me to the story).

October Books was for many years run as a workers’ co-op but in the past two years has restructured, with committed customers who are prepared to do some volunteering also able to become members of the co-op. (Thank you to Martin Meteyard who has sent me some more details about the membership arrangements).

You can access the CCF press release here, but a rather more unusual way of hearing how the bookshop ‘bought the bank’ is told in song form by singer-songwriter Jaquie Daniels here.

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Taking stock at Rootstock

Rootstock occupies its own special (and important) niche in the British coop world, taking in money from supportive investors and investing the capital in radical cooperative ventures, particularly housing coops.  The Spring newsletter from Rootstock has just arrived through my letter box, and I see it’s also available online, here.  Worth a peruse.

Making your savings work positively for good

Since the pioneering days of the nineteenth century the co-operative movement has had an interest in the way that investment capital can be used differently,  not just to make as much money as possible. That interest is still there: co-operative capital is one of the five key areas being focused on in the International Co-operative Alliance’s current strategic plan.

My personal and professional interest in this area doesn’t go back quite to the nineteenth century, but I’ve written over quite a number of years journalistically on some of the major initiatives for what has at various times been called ‘ethical investment’, ‘socially responsible investment’, ‘alternative investment’ and now, it seems, ‘positive investment’.

So I’m interested to see that the ethical share trading platform Ethex is at present supporting a major academic research study into the attitudes of ‘positive investors’ (ie people who make savings and investment decisions on more than simply the rate of return on offer). You may like to support this project by completing their online survey, which is to be found here.

Buying a truck to collect the mango harvest

It appears I have bought a truck to help mango farmers who are working cooperatively in Burkina Faso.

Well, not quite. I have lent the money to the farmers to enable them to buy the truck.

Well, even that’s not quite right. The Burkina Faso farmers’ organisation Association Ton has borrowed money from the UK-based cooperative Shared Interest. Shared Interest takes in share capital from British investors and lends it out again to fair trade producers in developing countries.

I am a modest shareholder in Shared Interest, an initiative I first covered journalistically when it was launched twenty-five years or so ago and whose development I have since followed with considerable interest.  Their latest newsletter has just arrived, and with it news of where it has recently invested my savings. The newsletter, and much else, is at www.shared-interest.com.

Community shares look for higher standards

I’ve been delighted at the growth in recent years of community share issues, supported by the joint Locality/Co-operatives UK community shares project based in Manchester. But I’ve also been increasingly concerned that some community groups, carried away probably by sheer enthusiasm, have been inviting people to buy shares without really having anything like an adequate business plan to show them. There will unfortunately undoubtedly be business failures, and investors who will lose money, as some of the early community share-funded initiatives unravel.

The Community Shares Standard Mark, being launched today, is an attempt to impose some basic minimum standards and give some kind of reassurance for would-be investors. It’s a sensible idea, even though it’s possible to quibble with the details: the standard mark is only available to ventures who pay for consultancy time from one of a set list of practitioners, for example.

Incidentally I like to claim that a workers’ coop I was once involved in was one of the first (perhaps even the first?) to appeal for capital from supporters in this sort of way (in our case through community loanstock rather than through community shares). This was in 1979, and enough money arrived to enable us to buy a shop premises in Milton Keynes. Anyone know of any earlier examples?

Corporate taxation and cooperatives

The International Trade Union Confederation, together with several of the sectoral Global Union Federations and a host of national trade union organisations, issued a call yesterday for pension funds to fight against tax avoidance schemes by companies they invest in.  “The global scale and influence of pension funds creates an opportunity to further advance responsible tax policy and practices”, the unions say.

There’s a lot of activity in this area going on at the moment. Last month’s newsletter from the UK charity ShareAction (it used to be called Fair Pensions) suggests that institutional investors should ask all the companies they invest in a set of questions about these companies’ tax strategy, including the size of tax savings brought about by intra-group financial arrangements.

These are useful initiatives, but do they fall within my self-imposed restriction in this blog to cooperative matters?

I think they do, for two reasons.  Firstly, it’s been encouraging to see some UK cooperatives (most notably Midcounties and the Phone Coop) taking a lead in endorsing the ‘Fair Tax’ mark, itself an initiative of the (cooperative) Ethical Consumer group.

There’s another reason.  The world’s cooperative insurers and banks hold phenomenally large amounts of investment funds on behalf of their customers. The members of the international coop and mutual insurers’ federation ICMIF (some of whom have a commendable track record incidentally in promoting socially responsible investment) alone have over one and half trillion US dollars in assets.

The necessary work of campaigning against companies’ manipulation of  corporation taxation is an area, in other words, where cooperative businesses can take a lead.

(If cooperatives are to claim the ethical high ground,  change the verb in that last sentence of mine from ‘can’ to ‘must’.)

Ethical banking: so what else is there?

It’s the morning after the day before… and, particularly in the light of those posts appearing from unhappy Co-op Bank customers pledging to move their accounts, it seems natural today to ask what we have left in terms of cooperative and values-driven banking in Britain.

The short answer is that cooperative banking in Britain, unlike many other European countries, has effectively meant just the Co-operative Bank, originally established in 1872 to serve the 1000+ local consumer co-operative societies.  Elsewhere in Europe co-operative banking grew not from consumer co-operation but from what we would now describe as locally based credit unions. If you’re interested, you’ll find a piece I wrote in the summer for The Guardian on European coop banking sector (and there are some very big banks involved) here.

What Britain did have (at least until the wave of demutualisations following the Thatcher-era Building Societies Act) was a thriving mutual savings and mortgage loans sector.  The largest remaining mutual mortgage lender by a very long way is the Nationwide Building Society, of course.  As a footnote, the Nationwide was originally directly associated with the cooperative movement (it changed its name from the Co-operative Permanent in 1970).  As a result of Co-operatives UK’s wooing of the mutual sector,  the Nationwide has recent chosen to become a Co-ops UK member.

Triodos Bank has been an innovative player in Britain in relation to ethical investment for almost twenty years, since the parent Dutch bank took over a small Rudolf Steiner-inspired UK bank in 1995.  Triodos’s own roots are in the Steiner movement (or anthroposophy, if you prefer), although the bank dropped its formal links with the Steiner movement in 1999.  It is not cooperatively structured, and indeed its internal structure is complicated (I last wrote about Triodos in detail for The Observer in 2004).  Its shares are held entirely by a Foundation with the mission of protecting the original principles of the bank, but a form of quasi-equity (so-called ‘depository receipts’) is made available to both individuals and institutions.  Incidentally, a Dutch cooperative bank is the largest institutional shareholder in Triodos, with a 6.6% holding of depository receipts. Peter Blom, a Dutch banker, has been in charge since 1989 and there’s an interesting video interview with him where he discusses among other things Steiner’s influence and Triodos’s approach to money on YouTube.

The Charity Bank is owned by CAF, the Charities Aid Foundation (the “charities’ charity”).  It offers savings products but not personal banking.  Unity Trust, owned by trade unions and with a minority shareholding from the Co-operative Bank, offers banking for charities and the not-for-profit sector but not for individuals.

And last but not least is Britain’s growing credit union movement. Britain was a late developer in terms of credit unions (perhaps because of the reach of building societies) and not everything over the past twenty years has been entirely plain sailing but Britain does now have some established and strong credit unions, the largest of which offer basic personal banking.  I wrote earlier this year on credit unions for the magazine Choice, and you’ll find this article on my website here.