New Labour, co-ops and social enterprise

Abstract

New Labour governments presided over a major political rupture with the Co-operative Movement, which is not described elsewhere. Labour discarded democratic, co-operative and mutual structures in favour of individually controlled social enterprises which could be used for flexible, low-cost public service delivery. Interviews with key players show these tensions laid bare in ways which other commentators have missed. In a major political difference between the Labour and Co-operative Movements through a shift to looser definitions for the third sector, New Labour’s policy change was as significant as its abandonment of its 1918 Clause IV of the Party’s Constitution in 1995. New Labour sought to transpose 1970s and 1980s social enterprises and local community organisations within a strategy to reduce public expenditure. Because the democratic accountability of earlier co-operative, mutual and community structures would have limited their acceptance of repositioning and changed roles, New Labour encouraged new legal structures with reduced accountability. Other contributions have underestimated the significance of this shift away from common ownership structures promoted by the Industrial Common Ownership Movement (ICOM) as the genuine antecedents of today’s social enterprises. The inauguration of Social Enterprise London, the Social Enterprise Coalition, the DTI Social Enterprise Unit and legislation and proposals between 1998 and 2002 formed a basis for UK social enterprise policy for the next twenty years.