The New Rochdale Pioneers

Even though there were many small co-operatives in existence before the Rochdale Society of Equitable Pioneers was founded in 1844, it was their establishment of the Rochdale Principles  that is credited with being the foundation of the Co-operative Movement, especially in the retail sector.

Now Rochdale Council and its arms-legth management organisation, Rochdale Boroughwide Housing, are planning a new pioneering initiative in the town.  They are beginning a formal consultation with tenants on a proposed stock transfer to a unique new
organisation – a housing mutual co-owned by tenants and employees – which they
say ‘draws on the timeless co-operative and mutual principles developed in Rochdale in the 1840s’.

Co-operation is in the air at the moment.  If the Rochdale proposal goes ahead and transfer takes place as planned in 2012, it would coincide with the UN’s International
Year of Co-operatives.  United Nations Secretary-General Ban Ki-moon says “Cooperatives are a reminder to the international community that it is possible to pursue both economic viability and social responsibility.”

Next week, Labour & Co-operative MP Jonathan Reynolds is presenting a ten minute rule bill, the Co-operative Housing (Tenure) Bill 2011, to the House of Commons.  The Bill would enshrine in English law the legal principle that the right of occupation of a dwelling can arise through membership of a housing co-operative which owns property rather than
solely through the grant of a tenancy by a superior (feudal) landlord.

According to David Rogers, the Executive Director of CDS Co-operatives, Jonathan Reynolds’s Bill will overturn over 1,000 years of feudal land law history which has its
roots in the Dark Ages from whence the only way to gain occupation rights was either as freeholder (of the Crown) or as tenant of a superior feudal landlord: a history which has led to the bi-polar approach to housing ownership and rental as the two only available tenures.‘  He believes that the new tenure would open the door to new institutional investment, especially from Pension Funds, offering long-term investors an attractive secure and assured rate of return.

Mutual housing is one of the few areas of housing policy where there is a degree of consensus at present.  The government has made strong statements in support of mutual ownership because it fits the big society, and co-operatives have long had support on the left and especially amongst those who support tenant control and the widest possible definition of public housing (ie not just the state).

In addition to the strengths of tenant and worker control, models like the Rochdale mutual also have the advantage of being technically outside the public sector in terms of borrowing.  Ridiculous as it is, Rochdale Council borrowing money to build homes that will eventually make a profit from rents is ‘defined’ as being a bad thing because it is public borrowing.  However, a mutual organisation borrowing money and using exactly the same resources for exactly the same purpose is defined as a good thing because it is not classified as public borrowing.

If this fortunate confluence of the political and the technical creates an opportunity for more homes to be built that will meet housing need – and especially one that will unlock institutional investment – we should go for it.

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