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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Suggested Topics
newsAnother week, another dress controversy on the internet
Life and Style
Scientist have developed a test which predicts whether you'll live for another ten years
Life and Style
Marie had fake ID, in the name of Johanna Koch, after she evaded capture by the Nazis in wartime Berlin
historyOne woman's secret life as a Jew in wartime Berlin
news... and what your reaction to the creatures above says about you
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

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn