Prime Minister David Cameron is to introduce new legislation to make it easier to set up co-operative societies.

The Co-operatives Bill would cut red tape and help build a fairer economy, Cameron said.

“We know that breaking monopolies, encouraging choice and opening up new forms of enterprise is not just right for business but the best way of improving public services,” he told the House of Commons yesterday.

“Right now there are too many barriers in the way so they will all be brought together and simplified in a new Co-operatives Bill that will be put before Parliament.”

The move was welcomed by Co-operatives UK.

“The new act is intended to make it as easy and natural to form a co-operative as any other form of business,” said chief executive Ed Mayo.

“We are delighted to see the coalition taking action to put co-operative businesses on an equal footing and create a diverse economy.”