Sir Mark Hendrick has put forward a private members’ bill to amend the law governing the co-op and mutual sector
Sir Mark Hendrick, the Labour/Co-op MP for Preston, has today introduced a private members’ bill to update part of the law on co-operative businesses.
If passed, his Co-operatives, Mutuals and Friendly Societies Bill would address problems with the types share capital issued by co-operatives; make provision about the taxation of mutual insurers and friendly societies which issue deferred shares; permit the capital surplus of co-ops, mutuals and friendly societies to be non-distributable; and amend the Friendly Societies Act 1992.
Sir Mark was one of 20 MPs selected from last month’s ballot to present a bill. It is rare for such bills to become law but because he was drawn fourth on the ballot Sir Mark will get more parliamentary time, increasing his chances.
He said: “The new Co-operatives, Mutuals and Friendly Societies Bill looks at how to make it easier for co-operatives to get more investment whilst retaining their democratic structures, ensuring they work in the interest and are owned by their members.
“As an LV member I supported the campaign last year when venture capitalists Bain Capital threatened the democratic status of one of our oldest and most historic mutuals, Liverpool Victoria.
“From this, it’s clear more needs to be done to make sure this never happens again and our mutual and co-operative sector is protected for years to come. My bill would make sure these protections are secured into law.”
The bill, which has its second reading on 28 October, takes forward a key recommendation of the 2012 Ownership Commission and builds on similar recent legislation seen abroad – notably in Australia.
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The bill has been welcomed by think tank Mutuo, whose managing partner Peter Hunt said: “This bill seeks to amend the capital regime for co-ops and community benefit societies, to permit the injection of external capital, while securing their mutuality.
“It also brings friendly societies law up-to-date and establishes tax neutrality for Mutuals Deferred Shares. Sir Mark’s Bill offers to enhance the operating environment for co-ops and mutuals so that they can continue to serve their members and offer more choice and competition in their markets.”