Co-operating for job creation

Our EU partners are backing social enterprises as a solution to public-sector problems. Paul Gosling looks at Britain's stance

Co-operatives and other social enterprises can create many thousands of new jobs while providing welfare services that governments cannot afford, according to a senior Spanish government minister.

The comments of Jose Martinez, the Minister for Work and Social Security, at a European Union conference last month were widely interpreted as a veiled attack on the British and German governments, which have blocked greater EU support for social enterprises.

Mr Martinez, who opened the conference in Seville on the social economy, said: "We are looking for a solution for public-sector problems and for job creation. The social economy is a major sector for solving problems of this kind, to provide care and social services, righting wrongs and fighting crime. We are looking for new mines, new seams for employment."

He added that the Spanish government was giving practical support for social enterprises and changing legislation to promote them. "They should be able to operate transnationally on an equal basis with other businesses," he said.

The European Commission established a Social Economy Unit in 1989 within the small and medium-sized business directorate specifically to lift barriers that prevented co-operatives and other member-owned businesses operating across EU states.

Toby Johnson is employed within the unit on secondment from the Industrial Common Ownership movement, the British body representing workers' co-operatives. He said that while smaller businesses faced disadvantages in trading across Europe this was even more true for social businesses.

"They have particular problems because of the legal structures," he added. "If you want to form a transnational co-operative, there is no structure to do that. In Denmark, for example, there is no co-op structure in law. That issue is still not resolved because of the position of some member governments."

Britain and Germany have been the leading opponents of moves to develop the social economy across Europe. In Britain the sector faces imminent decline with the conversion of member-owned building societies into public companies. Elsewhere in Europe, according to a European Commission survey, social enterprises are of increasing economic importance. There are 370,000 mutually owned enterprises across the EU employing 6.4 million people, with the largest 500 societies increasing their employee numbers by 7 per cent between 1988 and 1992 at a time when the recession was causing conventional businesses to lay off staff.

There is a long tradition of co-operatives in Italy and Spain, partly because of more favourable legal and fiscal treatment in return for which, on dissolution, all assets are handed over to the government to disperse. Co-operatives tend to be labour intensive and are therefore seen as a low-cost means of job creation.

Northern European countries with strong social democratic political traditions are also promoting co-operatives. In Sweden social enterprises, mostly financial co-operatives, are responsible for 20 per cent of economic activity and child-care co-ops have grown in number from 150 to 1,400 in 10 years. The Swedish government recently launched an inquiry into what barriers could be lifted to encourage the development of co-operatives. The sector is also expanding in Japan and in the United States where many hospitals are member-owned.

Labour MEPs have been strongly supportive of the work of the EC's Social Economy Unit and should the Labour Party form the next government it is likely to draw on the experiences of member states as diverse as Italy and Sweden to promote the sector in Britain.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
sportSo, how closely were you paying attention during 2014?
Arts and Entertainment
Dennis speaks to his French teacher
tvThe Boy in the Dress, TV review
One father who couldn't get One Direction tickets for his daughters phoned in a fake bomb threat and served eight months in a federal prison
people... (and one very unlucky giraffe)
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
Arts and Entertainment
The Plaza Theatre in Atlanta, Georgia was one of the 300 US cinemas screening
filmTim Walker settles down to watch the controversial gross-out satire
Arts and Entertainment
Amy Adams and Christoph Waltz in Tim Burton's Big Eyes
film reviewThis is Tim Burton’s most intimate and subtle film for a decade
Life and Style
Mark's crab tarts are just the right size
food + drinkMark Hix cooks up some snacks that pack a punch
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Selby Jennings: Quantitative Research | Equity | New York

    Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

    Selby Jennings: SVP Model Validation

    Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

    Selby Jennings: Oil Operations

    Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

    The Jenrick Group: Night Shift Operations Manager

    £43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

    Day In a Page

    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
    Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

    Clocks, rifles, swords, frogmen’s uniforms

    Surrounded by high-rise flats is a little house filled with Lebanon’s history
    Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

    Four months after the bombardment, Gaza’s wounds are yet to heal

    Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
    Gastric surgery: Is it really the answer to the UK's obesity epidemic?

    Is gastric surgery really the answer to the UK's obesity epidemic?

    Critics argue that it’s crazy to operate on healthy people just to stop them eating
    Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

    Homeless Veterans appeal: Christmas charity auction

    Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
    Pantomime rings the changes to welcome autistic theatre-goers

    Autism-friendly theatre

    Pantomime leads the pack in quest to welcome all