Charities 'should see non-charitable social enterprises as comrades-in-arms'

The lawyer Stephen Lloyd of Bates Wells Braithwaite tells the NCVO trustee conference that the charity sector should see such entities as an ally against marketisation

Stephen Lloyd
Stephen Lloyd

Charities should see non-charitable social enterprises as "fellow comrades-in-arms", delegates at the National Council for Voluntary Organisations’ trustee conference in London heard yesterday.

Stephen Lloyd, senior partner at the law firm Bates Wells Braithwaite, said that many people thought social enterprises were "wolves in sheep’s clothing", but charities should encourage them because they can help to fight "marketisation".

"The government is creating an oligopoly of suppliers in a number of key areas that will do what oligarchs always do: charge low prices in the short term so as to force up prices over the long term, having killed off the competition," he said. "The oligarchs will have the government over a barrel.

"I believe that to combat the force of marketisation, we need a much bigger public sector in the broad sense to include charities and social enterprises to counterbalance the mass power of the corporations who are taking over from the state.

Charities, he said, should see the rise of non-charitable social enterprises as "fellow comrades-in-arms", subject to a proper legal definition of social enterprise.

The definition, he said, needed "to be limited to legal forms that have appropriate asset locks". Community interest companies and industrial provident societies would therefore qualify, he said, and there might be scope for other companies that adopt those principles in their articles of association to qualify.

Lloyd said that if the government was not to provide public services, a vibrant social sector was needed to take their operation out of the control of business oligopolies.

"If the charity sector sees the rise of non-charitable social enterprises as a threat, I fear for the maintenance and development of vibrant, publicly minded organisations in this country," he said.

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