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Page last updated at 15:12 GMT, Friday, 9 November 2007

Caring and sharing

By Greg Rosen
Author, Serving the People - A History of the Co-operative Party

1929 Co-operative store
It's long been a High Street fixture

From one shop in Rochdale the Co-operative movement grew to be a bedrock of British life, before wilting in the face of big business. But David Cameron's plans to set up a co-operative movement are another sign of its revival.

Ten years ago, few would have predicted that a Tory leader would seek to embrace the ideals of the Co-operative Movement, as David Cameron did on Thursday. Indeed, for much of the 1990s, commentators were queuing up to predict the movement's demise.

The Co-op - and the divvy, or dividend, that its customer-members received as their share of trading profits - were once central to the fabric of British daily life. At its peak in 1955, there were 30,000 British co-operative retail shops, with a 20% share of the retail food market, 12% of the non-food retail market and 13 million members.

But by the 70s the iconic Co-op shops were in the doldrums, suffering at the hands of chain stores like Sainsbury's and Marks and Spencer. Complacent management failed to ensure that the shops kept up with consumer tastes in a more affluent society.

Co-op Food Store
Business in which members share decision-making...
And profits with 'divvy' (dividend) paid to each member
Includes Co-operative Bank, food stores and funeral homes
Now has 4.5 million members

One newspaper described the average Co-op store window as being reminiscent of a shop in a suburb of Kharkov. Their market share shrank. As profit margins were squeezed, many Co-ops allowed the divvy to lapse, forgetting its importance in differentiating Co-op stores from privately owned supermarkets.

Other mutuals too were on the defensive. As the 80s wore on, building societies were de-mutualising and becoming banks. In the era of management consultants and privatisation, the co-operative model was written off by City analysts and mainstream politicians and pundits alike as a 19th Century anachronism.

But just when it looked like expiring forever, the movement began to rejuvenate in the 1990s, led by the Co-operative Bank. And in 2004, for the first time for decades, sales at Co-op stores held firm against the supermarket giants. By 2002, the divvy - of which loyalty reward card schemes are a pastiche - had been restored as a method of returning profits and benefits to members.


Mr Cameron's speech is also a testament to the resilience of the ideas that underpin the movement. Those ideas, rooted in the success of the Rochdale co-operative shop opened in 1844, were about practical self-help.

Neville Chamberlain ignored protests and taxed the divvy

"Here was a genuinely co-operative effort in thrift, born of necessity," said a supporter in 1947. "A device to stretch one's miserable weekly pittance as far as it would go. It was practical, it was canny, it was essentially realistic."

It was co-operation, and its symbolic and practical embodiment was the divvy.

It was the hostility of Conservative governments over the years that spurred the movement to set aside its historic reluctance to engage in politics and found its own party.

Neville Chamberlain first found infamy as the Conservative chancellor who slapped a tax on the divvy, despite the millions of signatures on a National Co-operative Petition. Led by Kettering MP Sam Perry, father of Wimbledon star Fred - once an enthusiastic Co-op political activist - the Co-operative Party proved too small on its own to reverse the divvy tax. By the 30s it had signed an electoral pact with Labour, an alliance that continues to endure and currently sees 29 Co-op MPs in parliament, including Ed Balls.

For its part, old Labour will be mindful that the word "socialist" first appeared in November 1827 in the Co-operative magazine - a vehicle for the ideas of Robert Owen, who sought to run his textile mill in Lanark on co-operative lines.

Follow the leader

Yet while Labour for many years advocated nationalisation, the Co-operative Party maintained a quiet dissent, arguing even at the height of the nationalisation fervour in the 40s that the co-operative model was a better option.

Thatcher at the 1983 party conference
Nor was Margaret Thatcher a fan of the movement

For the past decade, the Co-operative Party has been discreetly permeating the Labour government - Gordon Brown is a member, making Mr Cameron the second, not the first, of the main party leaders to sign up to co-operative ideals. Labour itself has laid the groundwork for co-operative-sponsored specialist schools.

Nor is it clear how the creation of Conservative Co-operative Movement will differ from the existing Co-operative Party and its think-tank Mutuo - apart from the fact that it is Conservative.

Once there was a non-political body which also sought to set up co-ops to deliver local public services, just as Mr Cameron envisages. It was called the Co-operative Development Agency and was launched in 1978 by the Callaghan government at the behest of the Co-operative Party.

It was abolished in the 80s by Margaret Thatcher. The Conservative Co-operative Movement must hope it will not ultimately share its fate.

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