International Trade

Baroness Thornton Excerpts

Thursday 23rd January 2014 Lords Chamber

[Baroness Thornton (Lab)]

My Lords, I congratulate my noble friend Lord Harrison on initiating this debate. International banking is definitely not my territory, but I decided I would join in because of my involvement with social enterprises, co-operatives and the social economy—indeed, I attended a conference in Strasbourg last week. I need to inform the House that I am the founding chair and now patron of Social Enterprise UK and a supporter of the Social Economy Alliance. I am an ambassador for Sporta, the trade association for the social enterprise trust, providing leisure and sport services in the UK, and I work from time to time for Social Business International. All these interests are in the register. I am also the founder and honorary secretary of the All-Party Parliamentary Social Enterprise Group.

As the Minister will know, social enterprises, co-operatives and mutuals are businesses which trade to make a surplus, just like any other business. There are some 65,000 to 70,000 social enterprises in the UK. It is what they do with those profits or surpluses that make them social businesses; that and their governance and social mission, which express themselves in many ways, including community and environmental interests, job creation and support for people with disabilities. Hackney Community Transport, which has bid in the commercial market for red bus routes in London, is one example. Its profits go into supplying transport for the disabled and local communities, creating jobs and apprenticeships. It is a good example of a social enterprise.

The context in which this debate is important for social businesses has already been recognised by this Government. In recent times the British Council, for example, has made social enterprises and support for social entrepreneurs a key plank in its work. So when the Prime Minister recently led a large trade delegation to China the chief executive of Social Enterprise UK, Peter Holbrook, was part of that delegation. Throughout this autumn and winter the British Council has been running seminars and training workshops in China and Hong Kong. I take this opportunity to commend the British Council for its programme in support of social entrepreneurship, which is running not just in Europe but in nine countries in east Asia—China, Indonesia, Japan, Myanmar, the Philippines, South Korea, Thailand and Vietnam. It has trained thousands of social entrepreneurs so far.

There is no doubt that the UK is globally seen as the most advanced. We lead the world, for example, in developing social investment products, with Big Society Capital, Big Issue Invest, Bridges Ventures and the Charities Aid Foundation. They are all developing investment opportunities that exist to help to promote social enterprises and bring together social entrepreneurs and the investment that they need to grow those businesses. My Government invested a great deal in putting through legislation, creating community interest companies, with cross-party support, and creating the circumstances for health spin-outs and social enterprises, which has been followed through by this Government. Indeed, we all supported the social value Act, more recently, which gave more social entrepreneurs the opportunity to bid and tender for public service contracts.

Why is this important for the debate that we are having today? I hoped that the noble Lord, Lord Marland, might have mentioned the promotion of social enterprise when he listed businesses of which he thought the UK could be particularly proud, because this is definitely one of those sectors.

I have mentioned already China and south-east Asia. I now turn to Europe and social enterprise, because last week in Strasbourg there was a refreshing mix of policy-makers, senior politicians, front-line social enterprises, academics, public sector representatives, and social entrepreneurs, including commissioners and Members of the European Parliament, from across Europe, to reflect on the progress and next steps in developing a more social economy in Europe. The UK’s social enterprise sector was well represented, I am pleased to say, with the likes of Social Enterprise UK, Hackney Community Transport, Fusion21, Social Adventures, the British Council, the co-operatives, UnLtd, E3M, and many others, speaking and learning from the diverse mix of policy and practice that was on show. Indeed, I went there myself. The declaration that came out of that conference, which I shall refer to in a moment, was led by Jonathan Bland, who used to be chief executive of Social Enterprise UK. It was a recognition of the great expertise in this country in this field.

We learnt at that conference the difficulties faced in the social investment market here in the UK, which we are familiar with, and we shared it with our counterparts across Europe. We learnt of the European Commission’s interest in social impact bonds and the social stock exchanges, which we have been discussing and pioneering in this country for several years. That demonstrated how enthusiasm for more social investment models is growing inside the institutions of the European Union. We discussed state aid reforms, which are under way, and some of the rules that are emerging, which may free up the ability of national Governments and others to support access to finance for social enterprise.

Emerging from this event was the Strasbourg declaration. I do not intend to read out two pages of the declaration, noble Lords will be pleased to know. Surprisingly, it was not completely written in Eurospeak; it is an accessible document, which recognises the contribution that social enterprise is making to Europe as a vehicle for social and economic cohesion and to help to build a pluralistic and resilient social market economy. Acting in the general interest, social enterprises create jobs and provide innovative products and services, promoting a more sustainable economy; they are based on the values of solidarity and empowerment to create opportunities and hope for the future. They offer a model for 21st-century businesses that balance finance, social, cultural and environmental needs. Social entrepreneurs need to be seen as agents of change, as individuals and groups who are passionate about improving the lives of the communities in which they exist.

Ten recommendations came out of the declaration, but I shall point to just one or two. The European work on support for social enterprises has started already—with the social business initiative, through the Commission, and with the support of the various committees in the Parliament. However, it has to be said that that has been resourced by what we might describe as half a person in a cupboard, and by a lot of political support from across all the political parties.

The initiative was led by Commissioner Barnier. Three other Commissioners from various countries across Europe and from different political parties have also been involved; they were on the platform. Five chairs and vice-chairs of European Parliament committees were also there; again, that representation was cross-party. I emphasise that, because we in the UK have been proud of the cross-party support for social businesses and social enterprise, and I am glad to say that that seems to be translating itself into the European experience.

The declaration includes recommendations that,

“the next European Commission (with a dedicated inter-service structure) and the next European Parliament must take full ownership and deliver on”,

lots of the suggestions that were made about how to support social enterprise, and that the,

“European institutions and Member States should reinforce the role of social enterprises in structural reforms to exit the crisis, notably where the social economy is less developed”.

It also says:

“Public and private players must develop a full range of suitable financial instruments and intermediaries that support social enterprises throughout their life-cycle”.

The Minister will not be surprised to hear that I am asking him to ensure that the British Government support the declaration. They should support this initiative, and because we are the leaders in the field, we should help it to happen.