The UK Government’s pledge to double the size of the sector during this parliament has been met with cautious optimism. About fifty Labour MPs are members of the Co-operative Party, and as such they understand the benefits that co-operatives, mutuals and employee-owned businesses can bring for communities, the economy and the environment. But could Government be doing more to actively promote co-operative-based enterprise?

Measuring the economic benefits 

The 7,400 UK co-operatives support 16.6 million members and 240,000 employees, spanning a number of sectors. There are also 42 building societies, owned by 27 million members, contributing £7.2 billion to the economy, and the number of employee-owned businesses has risen significantly in recent years. On 21 October 2025, Jim McMahon, (Co-op) MP for Oldham West, Chadderton and Royton, underlined the importance of the sector, saying: “This is not a fringe part of the economy; it is absolutely foundational”.

Government-backed growth

Much is being done to support the growth of the sector. In 2025, the Mutuals and Cooperatives Sector Business Council was formed, and a separate group of specialist practitioners, lawyers, academics and civil servants was established by the Department of Business and Trade (DBT). 

The Ministry of Housing, Communities and Local Government (MHCLG) has also established a Co-operative Development Unit, with the aim of supporting local authorities in increasing the number of co-operatives and mutuals. 

Call for evidence

A recent call for evidence, which closed earlier this year, sought views on the ways in which Government might impact the sector, and how best to measure its growth. 

With more than 600 submissions received, it’s clear there is strong appetite for furthering co-operative-based enterprise. Looking further ahead, the Law Commission’s review of co-operative law is expected later this year. Depending on outcomes of both, 2026 could be a pivotal year for co-operatives and mutuals, bringing changes that could transform UK business for the better. 

What are we doing to prepare

At Anthony Collins, we’re already playing an active role in in shaping policies and curating practical ideas to support the sector’s growth. We would also like the Treasury to consider introducing a new fiscal incentive to drive interest in co-operative-based enterprise and make it a more attractive option to many organisations. For example, this incentive could be as simple as lowering the rate of corporation tax payable on profits or re-introducing an extended version of Social Investment Tax Relief for investors in charities and all forms of social business, including co-operatives and mutuals. 

Another key barrier to the sector’s growth is a lack of understanding. Whilst training, lawyers rarely encounter co-operatives and mutuals, which means the sector can be overlooked, and organisations may find it challenging to access specialist structural advice. At Anthony Collins, we are calling for Government to provide more ‘co-op-aware business support’, backed by industry bodies, such as Co-operatives UK.

Bring on the benefits

Boosting the co-operative movement could bring wider benefits to society too – for example, by finding solutions to long-standing problems. Sector specialists have noted that the mutual model could work particularly well for water companies and other utilities, as it would remove the fundamental responsibility that these companies have to reward a relatively small group of corporate shareholders. Operating under a mutual model would make them directly accountable to a much wider group of members and the communities in which they operate.  

For 2026 to be a pivotal year for the co-operative movement, Government must prioritise adapting legislation, consider incentives and provide more specialist business support.  

Key takeaways

• Co-operative-based enterprise has a strong presence in the UK economy, but its role could be developed further with the right legislation, incentives and support.
• Various bodies and councils have been established in the past year, to drive interest in co-operative-based enterprise.
• As well as proposing the introduction of new fiscal incentives, Anthony Collins is calling for more ‘co-operative aware’ business support.  
• Co-operatives and mutuals could provide the solution to some of society’s long-standing problems too – for examples, by providing an alternative business model for utilities, which allows them to share business benefits more widely for the good of the communities where they operate.
• Government must act on the current momentum for change and spur on co-operative-based enterprise in all its forms.