Social Enterprise UK responds to Prime Minister's speech
Moral markets rising on their own, but Government must act to support them, says Social Enterprise UK
- Social enterprise start-up explosion in last two years
- Social enterprises twice as likely to have reported growth in last year as mainstream SMEs
- Social enterprises left out of tax breaks and business support programmes
- Simple steps Government can take to create a moral capitalism
In response to the Prime Minister’s popular capitalism speech today in London, Social Enterprise UK Chief Executive Peter Holbrook said:
“Politicians are behind the people when it comes to responsible business and they need to catch up. Moral markets are already rising and consumers are driving this trend, choosing to buy from social enterprises.
“The last two years have seen a start-up explosion in social enterprise and it’s happening in Britain’s most deprived communities. Social enterprises are trading and reinvesting their profits into the communities where they work – not funnelling them off to wealthy shareholders elsewhere.
“Reforming capitalism is a hot political topic, but no-one should hope public anger will be appeased with token gestures. We need real action and strong policies that are going to address the inequality that has been allowed to grow in the UK. Real people are suffering.
“Despite the fact that social enterprises are simultaneously tackling social issues, creating jobs and powering up local economies, they are often stifled because they’re not entitled to the tax breaks available to other start-up businesses and are left out of business support programmes. There’s no doubt that with more support from our policy-makers the social enterprise sector could bring about a responsible recovery.”
Social Enterprise UK says the Government needs to:
1. Extend investment tax-relief in start-up businesses to social enterprises
2. Prevent the leakage of public money to private businesses and investors by:
- Reversing the trend to privatise public services prioritising instead social enterprise models that lock-in and multiply wealth and are accountable to their communities and staff.
- Making time for the Public Services Bill which has cross-party support and will ensure public spending decisions take account of the social, economic and environmental value they create.
3. Change corporate governance to incentivise better ownership structures and the significant involvement of stakeholders including staff and customers.
4. Incentivise the creation of social enterprises and social ventures through promotion, tax incentives and support.
Findings from ‘Fightback Britain: State of Social Enterprise Survey 2011’
- Across Britain, 1 in 7 of all social enterprises is a start-up, more than three times the proportion of start-ups in mainstream small businesses (14%, compared to 4%).
- Some of the biggest social enterprises operating in the UK today are those that started in the recession of the 80s.
- The research shows that 58% of social enterprises grew last year compared to 28% of Small and Medium-sized Enterprises (SMEs).
- The main reasons that social enterprises exist are to create jobs, support vulnerable people, improve health and well-being, promote education and literacy, and protect the environment.