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
PROMOTED VIDEO
Life and Style
Taste the difference: Nell Frizzell tucks into a fry-up in Jesse's cafe in east London
food + drinkHow a bike accident left one woman living in a distorted world in which spices smell of old socks and muesli tastes like pork fat
Sport
Luke Shaw’s performance in the derby will be key to how his Manchester United side get on
footballIt's not a game to lose, writes Paul Scholes
Arts and Entertainment
Don’t send in the clowns: masks and make-up conceal true facial expressions, thwarting our instinct to read people’s minds through their faces, as seen in ‘It’
filmThis Halloween, we ask what makes Ouija boards, demon dolls, and evil clowns so frightening?
News
peopleFarage challenges 'liberally biased' comedians to 'call him a narcissist'
Arts and Entertainment
Liam and Zayn of One Direction play with a chimpanzee on the set of their new video for 'Steal My Girl'
music
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Finance Assistant - Part time - 9 month FTC

    £20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

    Marketing Manager

    £40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

    Market Risk Manager - Investment Banking - Mandarin Speaker

    £45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

    Compensation and Benefits Manager - Brentwood - Circa £60,000

    £60000 per annum: Ashdown Group: Compensation and Benefits Manager - Compensat...

    Day In a Page

    The drugs revolution starts now as MPs agree its high time for change

    The drugs revolution starts now as MPs agree its high time for change

    Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
    The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

    Gotcha! The camera is turned on tabloid editors

    Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
    Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

    Fall of the Berlin Wall

    It was thanks to Gorbachev that this symbol of division fell
    Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

    What makes ouija boards and demon dolls scary?

    Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
    A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

    Rose Rouse's safari in modern Britain

    Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
    Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

    'My world of no smell and odd tastes'

    A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

    Matt Parker is proud of his square roots

    The "stand-up mathematician" is using comedy nights to preach maths to big audiences
    Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

    Paul Scholes column

    Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
    Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

    Frank Warren column

    Call me an old git, but I just can't see that there's a place for women’s boxing
    Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

    Adrian Heath's American dream...

    Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
    Simon Hart: Manchester City will rise again but they need to change their attitude

    Manchester City will rise again but they need to change their attitude

    Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
    Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

    A Syrian general speaks

    A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
    ‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

    ‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

    Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
    Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

    Fall of the Berlin Wall

    History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
    How to turn your mobile phone into easy money

    Turn your mobile phone into easy money

    There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes