How social enterprise became a Trojan horse

Mike Phipps reviews How Blair killed the co-ops: Reclaiming social enterprise from its neoliberal turn, by Leslie Huckfield, published by Manchester University Press

A lot is written about social enterprise these days, but what does it mean? While often presented as an alternative to neoliberal capitalism, social enterprise and much of the third sector may in fact be “platforms for its incursion into ever wider spheres of public life”. In embracing this, the Labour Party has jettisoned its earlier commitment to cooperatives and locally controlled democratic organisations, argues Leslie Huckfield in this thoughtful new book.

The idea of independent social entrepreneurship emanates from North America, but has become increasingly influential in the UK. US non-profits operate alongside private corporations and are significantly influenced by the policies of foundations and tax exemption: they clearly don’t have the same roots as the community organisations which were once the backbone of an alternative economic sector here.

With the Thatcherite deindustrialisation of the 1980s, the cooperative economy grew significantly. Despite the limitations in successive governments’ approaches, by the mid-1980s there were, for example, over 4,500 voluntary projects receiving Urban Programme support, with a total spend of £76 million.

Yet governments continued to favour a market-oriented approach to urban policy and the voluntary sector was often frozen out. Despite government reluctance to fund them directly, community-based social enterprises continued to flourish, in response to local needs – especially given the run-down in public sector provision in the Thatcher-Major years.

Only when New Labour came to power with its Neighbourhood Renewal Programme, Social Exclusion Unit and Policy Action Teams was more direct funding for community capacity available. Yet the general tenor of Blair’s governments was a shift away from democratic cooperative and mutual structures towards more malleable, less accountable, social enterprises which could be used for low-cost public service delivery. Coops were very much ’Old Labour’. Only later did it become apparent that this new model was paving the way for the outsourcing and privatisation of services.

Huckfield believes the shift away from coops to public service delivery was as big a political rupture with Labour’s traditional stance as its 1995 repudiation of the Clause 4 commitment to common ownership. The shift also signalled a serious loss of democratic accountability. The result is that today “social enterprise and the wider third sector have been institutionalised as a neoliberal agent for public service delivery… with public and social values replaced by value for money.”

Labour’s 2017 and 2019 manifestos promised to double the size of the cooperative sector in an attempt to stem its marginalisation in the New Labour years. Which way the Starmer leadership will go on this may be too early to say.

Les Huckfield’s overview of this subject is grounded in his own involvement in supporting coops as mechanisms of community defence from more than half a century ago. First elected to the House of Commons in 1967, he served in the Callaghan government and later put in stints on the Party’s NEC and as an MEP from 1984 to 1989.

While there is much in Huckfield’s book which is technical and specialised, he brings the subject to life with the use of previously unseen archive materials and interviews with key figures in the New Labour governments. More importantly, he has done a real service to the movement by highlighting this neglected area of policy and underlining the challenges it raises for Labour today.

Mike Phipps is editor of the Iraq Occupation Focus e-newsletter, available at book For the Many: Preparing Labour for Power was published by OR Books in 2018.

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