Why the Co-operative party is Labour’s best shot at stopping Reform’s rise

That concern is understandable. Exclusive polling for The Observer by Public First shows that, of voters who deemed themselves “highly cynical” about politics, 34% would now vote for Reform, compared with 9% who would vote Labour.

While acknowledging the threat Reform poses, several Labour ministers and backbenchers are frustrated by what they see as a failure to learn from the mistakes of David Cameron, Rishi Sunak and others: you can never beat the populist right by mimicking it. You have to tell a different story altogether.

No 10 has still not alighted on the best approach to tackle Reform, but a growing number of senior Labour members believe the battleground for the next election will be whether to bring together, or further divide, communities. “There’s a reason why Farage launched his campaign in a working men’s club,” says one minister. Another adds: “This is where the next few years of British politics is going to be decided.”

One faction within the Labour party claims to have a ready-made answer, honed over many years. The Co-operative group is, in effect, a party within a party, thanks to its somewhat unique electoral pact with Labour. It stems from a 19th-century movement in which communities organised to take on retailers that were foisting expensive, poor-quality produce on people.

The party is nearing the centenary of its alliance with Labour and will do so with 41 “Labour and Co-op” MPs – the largest number in its history – of whom 15 are ministers, including the business secretary, Jonathan Reynolds.

The Co-op MPs’ fingerprints can be found throughout the government’s approach. The election manifesto was launched at the Co-op headquarters in Manchester and included a commitment to doubling the size of the co-operative sector. Last year saw the first mention in history of co-operatives in any budget “red book” or Mansion House speech.

Jim McMahon, MP for Oldham West and the local government and English devolution minister, has been the chair of the Co-operative party since 2020. He is also the lead minister on the English devolution and community empowerment bill, due to be unveiled this week.

The bill is steeped in Co-op ideology, with everything from the name – which The Observer understands was changed to include “community empowerment” as a result of lobbying by party figures – to policies themselves, which will enable local people to come together to buy local assets such as pubs, clubs, cafes and grassroots sporting venues.

The Co-op ministers believe that this is the most powerful counter to the rise of the Reform – and the best shot Labour has of stopping Farage’s growth in popularity. “This is the battle for the soul of communities,” says Alex Norris, the democracy and local growth minister. “Reform are pretending they care, but we have been doing this for a century.

“You have happier, more productive communities if people have a stake in things, whether it’s the products they consume, or change more generally in their communities. And now, when their pitch is to separate communities, the idea that you move the country forward by bringing people together – that is the obvious counterweight.”

Co-operative MPs believe that, as well as people lacking pride in their neighbourhoods, a feeling of lack of control over their lives is a big driver for anger and distrust in mainstream politics. “We want to say: ‘Here’s the agency. That thing you’re frustrated about, whether it’s a loss of a beloved asset, whether it’s the fact everywhere looks a bit of a tip – you can change it,’” says Norris.

The new bill will give communities the right of first refusal when assets of community value come up for sale, and local groups will also be given twice as long to raise funds – a total of 12 months – to stop them being “timed out” from saving the venues they love.

“There are far too many assets being lost on the high street, where consumers have no stake in the asset that is coming or going,” says McMahon. “There is too much… ‘the market will decide’ attitude. That is no way near good enough. It massively impacts on people’s confidence and security, and it massively impacts on their feelings towards politics.”

Miatta Fahnbulleh, junior minister for energy consumers, agrees. To her mind, the lesson from Brexit is not necessarily a tougher approach to immigration – although controlled borders are a part of the puzzle – but Vote Leave’s ubiquitous campaign slogan: “Take back control.”

“Reform voters are people who are fundamentally disaffected and angry with the economic settlement,” she says. “And what’s the antidote to that? It is actually the very thing we are trying to do through the Co-op agenda, which is to say: ‘Who is the economy for, who are public services for and how do we put people in the driving seat and give them a share and stake?’”

Within Fahnbulleh’s portfolio, this worldview translates into policy through community-owned energy.

And it is not just in legislation that the MPs are making their mark. Kirsty McNeill, junior minister for Scotland, is running a campaign to save social clubs – what she calls “magical institutions” – as a way of enhancing social cohesion and a sense of belonging.

She distils the Co-operative ethos as having “a focus on where people live, in the same way that the union movement is focused on where people work”.

Within the wider Labour party, there remain concerns that some of the individuals in No 10 remain seduced by the approach taken by Blue Labour to compete with Farage and Reform on their turf. Some are scornful of the movement, arguing that its solution is “to stand next to [Reform] and shout with them, rather than try to deal with the cause”.

“Allowing people to own things gives them a stake in the world around them – it builds respect, belonging and trust, all of which have been eroded,” says Joe Fortune, the Co-op party’s leader. “We want this government to leave office having radically shifted the balance of power and ownership.”

Photograph by the Co-operative party