October 2022 digital edition

COST OF LIVING CRISIS
Liz Truss announces support measures on energy costs – but could
co-operative values offer more effective solutions?
As the government begins to assemble
support packages for households and
businesses struggling to cope with soaring
energy bills, the co-op movement has
been among those calling for equitable
and effective solutions.
It comes at a critical time for the sector,
with Co-operatives UK, the apex body
for the UK’s 7,000 independent co-ops,
reporting that 25% of its members are
concerned for their survival over the
next 12 months, with 5% approaching
such a crisis point that they could cease
operating within the next three months.
Support measures
With the Conservative leadership question
resolved after a lengthy election process
and Liz Truss moving into Downing Street,
the government announced a freeze
on domestic energy bills and a £40bn
funding package for businesses.
With the business sector urgently
calling for more help, business secretary
Jacob Rees-Mogg announced the Energy
Bill Relief Scheme, which will provide a
discount on wholesale gas and electricity
prices for all non-domestic customers.
This will include all UK businesses, the
voluntary sector – such as charities – and
the public sector, including schools and
hospitals. This support will be equivalent
to measures put in place for households.
Co-operatives UK is writing to Truss
to ensure that the co-op sector is “fully
included and effectively supported in any
action for businesses, along with all other
social enterprise, community businesses
and charities affected by the energy
price shock”. James Wright, policy and
development lead, added that members
are particularly calling for action to limit
prices for non-domestic energy customers.
Wright said: “Our latest data adds
to evidence that to do otherwise risks
a ‘doom-loop’ of destitution, corporate
insolvency, high unemployment and
wasted potential.”
Co-operatives UK surveyed its members
and found that:
• Half of responding co-operatives, which
together employ more than 85,000
people, are severely impacted
p Liz Truss during the leadership campaign (Image: John Snelling/Getty)
• 25% are concerned about their survival
in the next 12 months
• 5% are concerned about their survival
in the next three months
• 28% of co-operatives find their ability
to create value for members/customers/
communities in a financially sustainable
way is severely undermined.
The “ability and potential of these
businesses to create and sustain decent
livelihoods, expand opportunity and
benefit communities across the UK, is
jeopardised,” warns Wright in an online
statement for Co-operatives UK.
“Co-operatives are an essential part of
the social economy our communities rely
on in hard times,” he added. “Of the cooperatives
who tell us they are severely
affected, 60% are currently active in
the mutual aid response to the social
emergency and are looking to ramp up
such activities over the winter, subject to
their own financial sustainability.
“What’s more, co-operatives offer
excellent prospects for growing a stronger,
fairer, greener UK economy. We cannot
afford to lose these co-operatives now. The
new prime minister must take immediate
and effective action to prevent permanent
damage to businesses, including co-ops.”
Rees-Mogg’s announcement of
support for businesses helps to address
these concerns. Tony Armstrong, CEO
of community business support body
Locality, said: “This scheme will help
many local community organisations
facing the double whammy of soaring
energy bills and rapidly rising demand for
their services.
“These are the organisations providing
the essential spaces and support
communities will need to get through this
hardest of winters – everything from debt
advice and health services to a hot meal.
“We look forward to working with
the government to ensure this scheme
continues as the winter progresses. But
this crisis reaches far beyond energy bills
– we need to see targeted grant support
if community organisations are going to
keep playing their essential role on the
front line of this crisis.”
Call for new economy
The Co-op Party has been calling for
government action – and measures that
go beyond financial support to a more
fundamental economic reform.
General secretary Joe Fortune said: “We
are clear about the changes Liz Truss must
make in both the short and long term.
“Our movement and Party are alive
with ideas which will give our country a
better future. Over the coming months and
years, we must campaign for those ideas
and the movement we represent with even
more zeal and energy.”
8 | OCTOBER 2022