Press release

The inclusive economy, six months on

In her inaugural speech six months ago, on 13 July, the Prime Minster vowed to address the sense of discontent and division that led many people to vote to leave the European Union. Her government, she said, would focus on creating an ‘inclusive economy’, one that ‘works for everyone, not just the privileged few.’

So far the substance has been underwhelming, in part because the Prime Minister has not started with what already works.

As co-ops we have a bold and pragmatic vision for what a genuinely inclusive economy would actually look like. It’s one where people share ownership, decision-making and wealth through businesses built on the powerful combination of pragmatism and solidarity. It’s an inclusivity powered by co-operation. 

Marks out of ten

So, six months on, how is Theresa May’s government doing in creating an inclusive economy? Let’s mark their homework on this.

A flagship element of the inclusive economy agenda was intended to be a series of corporate governance reforms to make big business more accountable to the people it affects, including requirements for workers on boards and greater transparency on tax. These proposals were quickly watered down amid concerns that the Prime Minister’s tinkering with corporate governance through top down statutory interventions and contrived structures for stakeholder voice are unlikely to deliver much, economically or socially.

More quietly, government has created an ‘Inclusive Economy Unit.’ The Unit is enthused by the possibilities of ‘mission-led businesses’, a term dreamt up by Whitehall to cover businesses which do good as well as make a profit. An expert panel has recently made recommendations to government on how to support them. Since then the Unit has announced work to enable people to save in socially beneficial ways and to make it easier to entrepreneurs to be ‘mission-led’ from the outset. Neither initiative catches the eye as a game changer in the creation of a more inclusive economy.

A lot of commentators are increasingly sceptical about the degree of substance underpinning the government’s inclusive economy rhetoric. We think there are good intentions and some decent policy ideas in there, but we’re concerned there is too little focus businesses that, by their very nature, spread ownership, opportunity and wealth. In our view part of the problem is that, on top of Brexit and everything else, this government has made its inclusive economy ambitions even harder to achieve by ignoring what we already have: an existing movement of thousands of co-ops.

"The beauty of co-ops is how they combine solidarity with pragmatism and enterprise to demonstrate how a genuinely inclusive economy could actually work."

This week the Prime Minister used the word “solidarity” four times in a speech setting out her vison for a ‘shared society’. The beauty of co-ops is how they combine solidarity with pragmatism and enterprise to demonstrate how a genuinely inclusive economy could actually work. Yet in the same speech the Prime Minster overlooked how businesses can become shared society institutions, especially when they embrace co-operative values and practices. The Prime Minister talked about creating an environment in which charities and social enterprises can thrive, which is all to the good. But if she is serious about an inclusive economy she really needs to start talking about co-ops.

From what we’ve seen and heard so far, we give the Prime Minister’s inclusive economy agenda five and a half out of ten - mixed beginnings and a long way to go. So, how can government improve? 

Room for improvement

First it must recognise that in a truly inclusive economy ownership and control matters. We have been studying ownership trends over the last thirty years and they point to the need for initiatives that reverse the trend for ownership and control of the things that affect people – housing, work, business – being concentrated in fewer hands.

Whether it’s younger generations who can’t get a foot on the housing ladder, workers whose jobs are moved abroad, or communities who see their town decline, there is a growing desire to take back control and get to grips with the challenges people face. Co-ops are a tried and tested means doing this; be that workers taking over local firms that are up for sale, famers clubbing together to get a fair deal from supermarkets, or communities owning land and other assets. By backing co-ops government can help people choose a hopeful positive path to determine their own future, together.

"In a truly inclusive economy ownership and control matters."

Crucially the Prime Minister can lead her party in recognising that co-ops do not have to be aligned solely with to the left. In practice they can be of any political persuasion or none. When people as politically diverse as George Osborne and Paul Mason are talking about the need to democratise our economy, we know practical support for co-ops can sit comfortably in the Prime Minister’s newly claimed centre-ground.

There is, then, much Theresa May’s government could be doing. But we are only six months in. There is still time for the government to lead a range of policy initiatives that will create the genuinely inclusive economy we need.