It is a pleasure to see you in the Chair, Dame Angela. I thank the hon. Member for Wycombe (Mr Baker) for leading the debate. I want to touch on the importance of the co-operative sector in Scotland, particularly in community energy, and the key role co-operatives will have in ensuring that we meet our net zero targets. I am keen to speak about that later.
First, I should declare my membership of Glasgow Credit Union, which is the largest and most successful credit union in the UK, with over 50,000 members. It was formed in 1989 by workers at what was then Glasgow District Council, and it has moved on and flourished from there. I thank the Greater Govan Credit Union, Pollok Credit Union, Vale of Leven Credit Union and Penilee Credit Union for their work on behalf of Glasgow
South West constituents. Joining a credit union was by far and away one of the best financial decisions that I have ever made, and I know that many constituents and many people across the UK feel the same way.
The Minister will know that I have championed the credit union sector cause. To help it grow, I hope that he will join me in pushing the Prudential Regulation Authority to consider changing the capital requirements for credit unions. Successful credit unions appear to be getting punished if their assets rise above £10 million. I know that the Minister has some sympathy with that point, and I look forward to some positive comments about the credit union sector.
Co-operatives and mutuals can help develop communities and the economy. Co-operatives are a form of business owned and run by members. In the UK, co-operatives operate under various governance models and legal forms, including workers co-operatives, multi-stakeholder co-operatives, community benefit societies, community interest companies. It is interesting that they have existed in the modern form since 1844, when cotton mill workers in Rochdale formed the Rochdale Society of Equitable Pioneers to buy goods at lower prices. That example lives on in Glasgow South West, with the creation of the Threehills community supermarket, which is now starting to operate. That has become a very successful model.
The Financial Conduct Authority, of course, holds a public register of major societies, and Co-operatives UK publishes a report each year about the scale of the sector; the 2021 report is quite interesting reading. It noted that there were 7,200 co-ops, employing 250,000 people, with a combined turnover of £39.7 billion, and ranging in size from large retailers, such as the Co-op, to credit unions, farmers’ associations, and, of course, community pubs—what a fantastic idea they are, too. Interestingly, the report argues that co-ops appear to be much more resilient to the challenges brought by covid-19 and, indeed, their coming out in support of their members was a factor in that achievement. Perhaps more interestingly, the report also notes more ambitions and optimism about the future from co-ops than among other small businesses.
In Scotland, Scottish Enterprise, through Co-operative Development Scotland, supports company growth through co-operative models, which can protect community services that bring benefits to the local economy. It helps businesses and community enterprises grow by offering advice and services, including free masterclasses and one-to-one support. A community co-operative is a democratic values-led business model, in which community members come together to buy and run an asset for the benefit of local residents. Typical assets in Scotland include wind turbines, hydro schemes, shops, and pubs, among other things.
The Scottish Government have made strong progress towards community energy, including through co-operatives. They recognise that local energy cannot be delivered in isolation; it must develop alongside, and within, a vibrant national energy network. Both are crucial to ensuring that we transition to a net zero future by 2045 in a way that delivers secure, affordable and clean energy for ususb all.
The Scottish Government established their flagship community and renewable energy scheme—or CARES—with the aim of supporting and growing community and local energy projects throughout Scotland, as well
as aiming for a considerable increase in the number of shared-ownership energy installations across the country. The scheme is open to a host of different groups and organisations, including bencoms and co-operatives, community groups, faith groups, housing associations, local authorities, national and regional non-profit organisations and rural small businesses.
The Scottish Government had a target for 500 MW of community and locally-owned energy by 2020, which was exceeded, so they increased it to 1 GW by 2020 and 2 GW by 2030. Progress towards that target has been positive, but changes in UK Government subsidies—for example, the closure of the feed-in tariff scheme—have undermined that progress. However, we continue to encourage shared ownership models as a means of increasing community-led involvement in commercial projects.
We are committed to helping island communities—a point was also made by the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) about rural and island communities—and we must ensure that they also become carbon neutral. Supporting those carbon neutral islands should be in the vanguard of reaching the net zero emissions targets by 2045.
As we move towards recovery from the pandemic, greater focus and priority must be given to decarbonisation as a driver for community-led action. New opportunities for communities will arise in the shift towards more localised energy solutions, giving more influence and choice and, in doing so, improving the quality of life for those living here.
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