co-operative

Up and down the country local authorities, independent retailers and residents complain that rents are squeezing out interesting independent retailers and creating "Clone Town Britain".

Well, I have an idea. This week the Co-operative Group agreed terms to acquire Somerfield supermarkets. There are some, say management, which directly compete with existing Co-op shops and so one or other may be up for sale. One of these is in Headington in Oxford where there is a fairly recently refurbished MidCounties Co-op store on one side of the road and a Somerfield on the other.

Some people are all excited that someone like Waitrose might step up and buy it - and in a sense there could be no better buyer as far as the Co-op goes - the other end of the market and a sort of a worker co-operative in its own right.

But as I was in a social enterprise meeting earlier today my mind wandered to Headington supermarkets (!) and I wondered if, given it is the Co-operative who have bought them, there might be mileage in proposing a sale to a more local group - perhaps a permanent base for an indoor/farmers' market, or a space which, like the Covered Market in town, could provide "protected space" for independent retailers we wanted to see revived in Headington, set up say as a secondary co-op or a community land trust type structure (or even bought by MidCounties from Co-op Group) enabling local people a say in its management, policies and ownership.

It would require some work of course actually to work out whether the relatively recent decline of independent fresh food retailers in Headington for example has been, as often claimed, because of rent and rates issues where such a facility might be able to help by lowering the cost of access. But if it does seem viable would it be worth trying?

Or would Waitrose or Sainsbury still be a more attractive offering?

I hate the G8, there's no doubt. I find the whole idea a nauseating display of mankind's folly that a few people with power can do more or less anything, from manipulating the world's climate to holding in their grasp the lives of billions whose lot in life those leaders of the industrialised nations can barely comprehend, let alone decree how to change.

It epitomizes to me why nation states are vile, unnatural divisions of humanity and the planet which, frankly, seem to have more to do with protecting the wealth of the few and patronizing the poverty of the many on this earth. Their leaders pose, Atlas-like, for photo-calls after their vacuous pronouncements, like some cabal of gallactic princelings in some dystopian Sci-Fi vision of a future inter-stellar imperial court.

Yet I'm no crusty protester you'll find scaling fences at Gleneagles or taking a bullet in Genoa complaining that these neo-cons and neo-liberals want to sell our world to the most hated capitalist profiteer. Oh no. Business, amongst other examples of voluntary human co-operation, has a huge part to play in addressing the needs of everyone on the planet. If only it could all be carried out on a billiard-table-level playing field.

And this is the greatest power these eight chattering onanists have - they could, if they chose, level that playing field tomorrow, or at least leave Japan this week having agreed to do so. But they don't want that, do they. because they also represent the businesses already raping the planet and its people by dint of playing on a skewed field.

They make me puke when I think of them, quite literally. I am nauseous writing this to be honest. I do not believe there are eight people on the planet, in fact not 2008 nor yet even 200,000,008 endowed with the wisdom of gods and strength of titans who could do any better at securing the future of this planet than the possibility oif billions of us being able to communicate and co-operate directly among ourselves.

At the top of my front page you will find what must be one of my favourite quotes from any politician, in this case the truly radical, Richard Cobden:

"Peace will come to earth when the people have more to do with each other and governments less." 150 years later, like infants only learning to crawl, we still rely on those protectionist, egotistical, smugly self-important governments despite the evidence that they cannot and will not deliver on their promises.

Whilst I certainly do not agree with all their policies, I find the idea of SimPol, in which we use modern communications technology to get ordinary people throughout the world, in diverse and distant countries, to voice together our aspirations and make those same sort of global changes on a consensual and co-operative basis.

Y I H8 G8.

Quite by chance, as if on order to make the local elections more exciting in my ward, two local planning issues have suddenly popped up (not entirely unexpectedly it has to be said) that are likely to cause a deal of controversy when they get to decision-making time. I don't want to talk about their planning merits or otherwise on here. But I do want to use them because they are very good examples of why I am so passionate about land reform.

The first, in the ward in which I am standing is an application for new student residences adjacent to the site on which I am a warden proposed by my employers, Oxford Brookes University. To be fair it will make more of an impact on residents in the neighbouring ward, but it is the economics of it all I want to look at not the planning, to show why land value tax would be such a benefit to the community.

The second, just over the main road in the neighbouring ward but which will make a significant impact on neighbours in both wards one way or another is the news today that Tesco have bought up a local former pub building from a local bar/restaurant entrepreneur who had seemingly been knocked back in the early stages of planning such that he no longer felt it worth fighting for his ideas for the site. Here I want to look at how the planning system seems to favour the bigger developer with the financial clout and how this affects the fairness of land law.

But first, the new proposed halls of residence. This site is approximately quarter remaining of a site the university acquired from the Department of Social Security about seven years ago now. When I was last on the council, just at the end, they had owned the site for about six months, if I remember correctly having bought the whole thing for either eight or eleven million pounds through a charitable trust set up for the purpose and were just getting outline planning consent.

The entire site had been only about a quarter used for several years since most parts of the DSS had moved out. And even when at "full capacity" it had been an egregiously inefficient use of a piece of prime inner suburban land - even for offices - since it was half car park and half single storey nissan hut type buildings.

Since it had been government owned, effectively there was no income to the public purse from this land. Once it was owned by a charity the empty land has generated no receipts to the public purse in the form of business rates. The charitable trust sold off about a quarter of the land to the adjacent Oxford International Centre for Islamic Studies, first for use as a contractors car park and now it lies more or less empty. A hectare of prime city centre building land. The university built nearly seven hundred student rooms in new halls on half of the original land and these were opened five years ago now. But it is the effect of this last quarter of of the site I want to examine and show how failing to encourage optimal use of land where it is available is a disaster for the rest of us.

The site is about a hectare. So if the original purchase price for the entire site was the higher of the two figures I remember hearing at the time - eleven million pounds, its share would be two and three-quarters million. The current application is for 335 study bedrooms and since the student halls market has changed out of all recognition in those seven years, commercial firms are willing to pay it is rumoured up to £45,000 per room for suitable land, as a site alone it would be worth more like fifteen million pounds.

Point one: whilst the local authority has received virtually nothing for this land in rates, the owners, either the university or the charitable trust, have effectively got a book profit of £12 million - a four hundred per cent return in seven years.

335 study bedrooms would, if theory, allow some 83 four bedroomed family homes to be freed up from the current student private rented market somewhere in the city assuming student numbers overall remained static. That's 83 largeish families who have been otherwise excluded from the housing market in Oxford for seven years because these halls did not exist. At its worst, that means that the tax-payer, through housing benefit, has spent upwards of ten million a decade supporting those households in private rented accommodation while they wait for "affordable housing".

Point two: the cost to the tax-payer of that piece of land laid idle and not producing any local taxation has been at least ten million in housing benefits to private landlords while the owners have made that massive book profit.

Now imagine if that land were taxed on its value at its most productive use - that's currently the £15 million or so a commercial halls of residence developer would pay for it. A ten percent land tax would now be yielding the public purse £1.5 million a year, and more importantly would have been liable for that tax all the while it has been so underused. No owner with any financial sense would have kept that land out of productive use with a tax bill like that. The land would have been brought into its best use long ago, either as housing itself or freeing up those equivalent 83 units for family use instead of student private lets, and the tax-payer would not have had to support 83 families to the tune of that £10 million pounds a decade in supported housing.

Now, don't get me wrong, I am neither criticising my employer nor demanding ten storey blocks of flats on every vacant site. But I am illustrating the cost to society of holding land out of use, and the unfairness where, in doing so, the owners have made a vast profit at the direct expense of the tax-payer. It's the system that causes this, not the participants in that system who are only following the rules everyone else plays by.

Now to the "Tesco pub". Some time ago this down at heel local pub was closed, its future uncertain. A well known local restaurant and property entrepreneur bought it up and a few months ago publicized his idea for turning it into a row of three shops and some flats above in a "landmark" new building. But with an ambivalent local reaction and, it seems, less than enthusiastic reception from the city's planners to the idea, this chap pulled his plans and decided to look around for a buyer. The land registry records show that the property had cost him £400,000 and that it was mortgaged so he had financed it empty for seven or eight months developing his ideas and the prospect of a long uphill struggle into the unforeseeable future in the planning system means he would be financing it empty for many months, if not a couple of years to come.

It is opposite a long established and not so long ago refurbished and extended local Co-op store (where I joined as a member of the Co-operative and where I shop several times a week in preference to all the other supermarkets around I could potentially choose from) and a less long established Costcutter store that houses the local Post Office and a similarly aged Chemist shop that replaced a locally owned and well patronized cycle and fishing tackle shop and an electrical retailer. It is, to put it mildly, on an awkward site, at a very odd junction just at the point the Marston Road becomes a dual carriage-way "boulevard" and buses turn right against the traffic whilst the off-road cycle lane comes to an end, the road splits into two lanes prior to a busy and slightly awkward double roundabout junction. There is just enough parking in the lay-by outside the existing shops for their customers and nowhere else for cars to park.

The site might have been viewed as ideal for shopping or catering uses complimentary to the existing neighbouring shops. Extending the range of goods and services people could get in a single visit to the local shops. All very sustainable. And contributing to the local economy and the success of local entrepreneurs - all of which tends to keep more money in circulation more locally in Oxford, making us all better off.

But now Tesco have the site. Obviously, they are in competition with two of the existing local stores. For many, they will do a better job of supplying their grocery needs and at lower prices. That too is good for peoples' pockets and therefore local wealth retention. But since, if they've borrowed to buy it at all, as opposed to taking the purchase price out of the weekend's take from the nearby Tesco out of town superstore, it's probably a tiny dent in their current income rather than a major liability as it would have been to the local entrepreneur who had borrowed to buy it as a significant chunk of his portfolio. And they can afford to sit on it until the planners give in, until attrition of any opposition to the idea gives them an easier ride in the planning process.

At the moment I wouldn't dare to have made up my mind about the idea of Tesco Express there. On the one hand, competition is good for the consumer. On the other, Tesco has such financial clout that it could send its competition to the wall and leave it eventually and open field to increase prices because of its local monopoly. And there again, whilst as a member I would be very sad to see either of the two existing competing stores fail, they would almost certainly then be occupied by some other, and probably local, entrepreneur with another great idea that would compliment rather than compete in its turn with the Tesco store. Again, this increases the range of goods and services a person can get in one trip to the local shops.

But all I am highlighting is that because the planning system causes a proportionately greater opportunity cost to fall on the smaller businessman it actually favours the big financial muscle of large corporates who can afford to take the risk for longer. It is not a level playing field. But, as in the previous story, it's the playing field on which all would be developers have to play. On the other hand again, it would be quite wrong for the planning system to become a tool of protectionism, benefitting one business or businessperson over another by preventing competition. Perhaps in an LVT based system the tax payable on a site should be suspended for the time during which the planning bureaucracy was deciding on a proposal to concentrate the minds of planners on getting the best deal for all parties in the minimum time possible and enabling people to get on with running their businesses, extending their homes, or whatever the application was for.

Anyway - all that was a bit of a marathon use of two local and serendipitously current issues illustrate quite well some of my hot button issues on land reform, free trade and anti-protectionism and localism.

Here's another thing about the Conservative party and their tenuous claimed link with the Co-operative Movement. It is no coincidence that the international rainbow flag for peace is also the international co-operative movement's flag. Nor that it was the Co-operative Womens' Guild that instituted the idea of wearing white poppies to promote peace instead of red ones that commemorated the "glorious dead". It is axiomatic that the Co-operative Movement strives for peace - the very phrase "Peace and Co-operation" encapsulates the ethos.

So, will Dave be wearing red, for the more traditionally Conservative Remembrance of War, or white for the traditional Co-operative Promotion of Peace? I think we can probably predict pretty well which it will be, don't you?

Just as we are trying to get to grips with whether the Liberal Conspiracy is actually Liberal, so now we have Dave the Chameleon saying the the Conservatives and the Co-operative Movement have always been natural bed-buddies:

The co-op movement has generally been associated with the political left. I think that's a shame. First, because there have always been people on the centre-right concerned about the effects of capitalism on the social fabric. Men like Carlyle and Disraeli, following the tradition of Edmund Burke and Adam Smith himself, who recognised at the outset of the industrial revolution that profit was not the only organising principle of a healthy society. And second, because the co-operative principle reflects an important part of the vision of social progress that we on the centre-right believe in: the role of strong independent institutions, run by and for local people. That's why Conservatives have always argued that free enterprise and the co-operative principle are partners, not adversaries.

It is true that, faced with an alternative between co-operative localism and central state organization, the Conservatives have occasionally championed the mutual. Notably in 1908 when the Old Age Pensions Act was passed the Conservatives tried to promote the use of Friendly Societies and Mutuals instead of a state pension system. And it may be that there have been well-meaning Tories worried about the "effects of capitalism on the social fabric". And yes, co-operatives operate in the same markets as capitalists often and compete, often successfully with them.

However, the International Co-operative Alliance provides the ground rules for bona fide co-operative enterprises. And the Co-operative Values they promote are indeed motherhood and apple pie stuff: "Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity."

But the Co-operative Principles, developed from this vision and building on the rules of the Rochdale Pioneers, set bona fide co-operatives at odds with the traditional capitalism that the Tory party has long championed. "Democratic Member Control" for example means that every member, regardless of their financial stake, has an equal say in the running of the business. Capitalism is based on the exact opposite - that he with the most shares has the greatest say.

"Voluntary Open Membership" was a challenge to the "Church and State" party - with many mutuals founded precisely because their non-conformist members were barred from services and facilities because of their religious associations.

The Co-operative Movement, at least in Britain, was basically founded to empower the lower classes against the Tory ruling class and its economic hold over them. Its principles can be and are used to democratise and devolve services from an overbearing state as with Cameron's regurgitation of the liberal Milton Friedman's idea for co-operative schooling. But it is an extra-ordinary claim that the principles of the Co-op Movement are compatible with the protectionist capitalism embodied in the Conservative party.

Dave incidentally perpetuated the popular story that the co-operative movement started in Rochdale - they codified the idea of course, but it was proto-socialist Robert Owen who opened the first co-op store for his workers in New Lanark, and, to take it to its logical origins, Gerrard Winstanley's Diggers in 1649 who set the scene for the long battle between co-operation and collectivism on the one hand and enclosure and privatisation of our common birthright on the other. I doubt the Conservative Co-operative Movement will be agitating any day soon for wholesale equitable redistribution of the common wealth.

Incidentally Guido - I believe you are quite wrong in this respect - a hedge fund partnership cannot by definition be a bona fide co-operative since one of the other obligations of a bona fide co-operaive is to promote and educate about the co-operative principles. The hedge fund exploits to the max the capitalist principles of shareholder power - might is right. I don't have a principled objection to hedge funds and private equity - they have their place in this broken world, but they cannot be counted as members of the co-operative movement by any stretch of the imagination.