Loss of Equity in co-op movement: Co-operative News

Posted on February 3, 2009 · Posted in Co-operative News

 

A month into the grim new year and the first collapse of one of the big mutuals has occurred. Equity Shoes was part of the revered history both of the workers’ co-operative movement and of Leicester’s industrial scene.

 

Equity Shoes was a producers’ co-operative, manufacturing shoes in what had been an industrial heartland in Leicester. It was symbolic of a proud tradition of shoe manufacture in the city, where there were once 130 shoe factories employing 170,000 people. Last month, the last of the major factories – Equity – closed down.

 

But Equity was much more than this. It was also an example of what had been a major part of the producer co-operative sector in much of England. Many other co-operative factories also manufactured shoes.

 

Now some 98 worker-members of the Equity Shoes co-operative have been made redundant. A meeting of members and creditors in the city decided the firm had no future and must go into liquidation. As well as making a loss, the company pension scheme had accumulated a deficit of £1.3m – which the Government’s Pension Protection Fund is expected to bail-out.

 

Equity made traditional shoes for women – in truth, for older women. It was a market segment in decline and, like all UK shoe factories, the company had difficulty in competing against production in lower cost countries, where staff are often underpaid.

 

The history of Equity is one of the most interesting in the whole of the co-operative movement. Shoe production has long been a staple of Leicester industry and the Co-operative Wholesale Society manufactured much of its stock from a Leicester factory in the 19th Century. But the high profitability of the CWS led to tension with its staff, who believed they deserved higher levels of bonuses.

 

To deal with this conflict, it was proposed that a new industrial structure should be developed for the CWS factory in Leicester, in which there would be a two tier ownership system, part consumer co-operative, part workers’ co-operative – with employees entitled to a share in the decision-making. The proposal was defeated, though the workers did get higher bonuses.

 

Shortly after, CWS ended the agreed bonus payments, annoying over 2,000 workers in the Leicester factory. Additional tensions were created because the CWS brought in people from the surrounding countryside and used lower paid workers. It was one of many conflicts of this period between workers who valued their traditional craft skills and factory owners – in this instance a co-operative – that accused them of being ‘labour aristocrats’. The conflicts between CWS and its employees led to a series of strikes.

 

Eventually the workers had enough and decided to set-up on their own. They formed the Leicester Manufacturing Boot and Shoe Society – an industrial and provident society producers’ co-operative. They called the factory ‘Equity’ – representing the principle they felt they were acting in – and so began Equity Shoes.

 

Starting capital was raised jointly by the worker-members and the trade union. State-of-the-art premises were built, effective manufacturing processes adopted and an agreed, equitable, profit distribution system established. The factory quickly became profitable. It also developed a highly regarded system of social support and workers’ education, earning it a reputation for the adoption of enlightened capitalism.

 

There were strong connections between the founding parents of Equity, the local trade unions, the new Independent Labour Party (which was very strong in Leicester) and the more progressive, non-conformist, churches. The idealism of Equity provoked various other actions of co-operative and community based endeavours in the city, including other producers’ co-operative and a model town built on communitarian principles. It was an age of enlightenment for working people in the city.

 

For another 122 years, Equity first thrived and then survived. But it remained towards the end a throwback to a past time. High quality working standards, a now ancient factory and fair treatment of staff are not the foundations for profitable shoe manufacture today. And the shoes themselves – at least when I last visited the factory, some years ago now – were of a fashion that was also outmoded.

 

It was a surprise that Equity remained in production in its later years and it is no real surprise that it has now closed down. But it is very sad for all that.

 

* For the historical information I am indebted to the excellent book ‘Radicalism, Co-operation and Socialism: Leicester working class politics, 1860-1906, by Bill Lancaster.