Like many others I find Brexit is a constant topic of conversation at the moment. Personally I voted Remain, mainly on the grounds of international solidarity and because I saw the UK as a positive influence for good within a Europe that was (and is) facing serious challenges. As a historian by training I am very conscious of how fragile Europe has always been, and how much we all benefit from peace and stability and have a responsibility to contribute to it.
The Co-op Group chose not to campaign on the subject at the time of the referendum because we recognised that our membership was pretty evenly divided on whether to leave or stay in the EU, and the issues at stake were far wider than the difference it might make to the Co-op on which we could legitimately speak.
But what difference would Brexit make to the Co-op, particularly if it is a “hard exit”?
If, as seems likely, Brexit leads to a deflation of sterling, then the cost of all food imports will go up, and this may be amplified by the additional frictions of bringing food across borders, and possibly by the imposition of WTO tariffs. Although the Co-op sources more product proportionally from the UK than the other major retailers, a lot of what we sell is of course still imported, and competitive pressures will inevitably also force the price of UK-sourced goods up. Price competition between retailers may shield consumers a little, but the scale of price rises means that food prices are almost certainly going to rise pretty steeply.
Food retailers are more protected than some in inflationary times, because we all still need to eat. However, as consumers feel their purchasing power squeezed they will be forced to choose more basic products, and (a good thing this) will become much more conscious of only buying what they need. Competition from discounters will become even stronger in this context – although Aldi and Lidl imports a great proportion of what they sell from Europe and so may be disproportionately disadvantaged.
We will also be concerned about our colleagues from overseas. Although they will have some rights to remain here, we know they will feel less welcome in our country and some valued members of our teams may choose to leave. For those who are sending may back to their homes, their sterling earnings will be worth less because of the likely downward movement of the pound. Many of our agricultural suppliers will be even more affected by the reduced attractiveness of coming to the UK for the seasonal workers on whom they depend.
Are there any upsides? From a strictly Co-op Group perspective, I can see few benefits from leaving the European Union.
But whatever happens we have to recognise that we have become a society where a sense of division is more acute than at any time since the 1930s. Brexit has accentuated perceptions of the real unfairness of income distribution between rich and poor, between the university-educated and the less-educated, between skilled and unskilled, between the regions and the South East, between companies and the people. It is also leading to a sense of distrust in our political system and its ability to work for the common good. It has made it clear that something has gone wrong with the working of our society, and we need to change.
This will be a context not too dissimilar to the times when the co-operative movement started in the 19th century. So co-operative values and approaches will be more important than ever – and are likely to resonate more with the general public. Themes of justice, fairness and working together to build stronger community, which are all intrinsic to co-operation, will be very relevant to re-creating a cohesive society in this country.
So whether we leave or whether we remain in Europe, now is a time when we need to promote the benefits of co-operation and community values afresh – and it just may be that we will find the nation readier than ever to respond. That is a challenge and an opportunity to which I hope the Co-op will be able to respond.