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Social enterprise and the New Deal for Working People

With the Labour Party returning to power, the issue of worker rights has emerged as a priority for government. The New Deal for Working People is the proposed flagship reform, offering a suite of policies aimed at enhancing protections and banning exploitative practices.

While trade unions have been intimately involved in the development of this package, Labour has also been keen to stress the desire to work in partnership with business. Sector groups and leaders have welcomed some of the ambitions and policies announced in Labour’s election campaign – but, as the Confederation for British Industry (CBI) noted, there remain “legitimate concerns” within the business community[1].

However, our recent Social Enterprise Knowledge Centre research shows that such concerns are short-sighted, considering the impact that deteriorating working conditions have had on our economy. Since the 2008 financial crisis, wages have stagnated and living standards have plunged, largely due to employers’ growing power over workers[2].

Short-term gains from weak working rights are offset by the long-term damage poor working conditions have on the wider economy. Poor wages stifle demand and limit growth. Insecure work contracts lead to high staff turnovers, generating costs in the replacement process. Lack of investment in staff contributes to stagnating productivity and undermines the ability of businesses to invest in the future. These are not the economic conditions in which business can thrive. 

Social enterprise has long recognised the inherent value of good working conditions, leading the way for wider business– as evidenced by some of our latest research findings:

  • 8 in 10 social enterprises employers are paying the real Living Wage
  • 77% of social enterprises are providing some form of workplace training
  • 95% of social enterprises offer some form of flexible working arrangement[3]

Far from being a burden to these businesses, many social enterprises have found investing in the quality of their employment offer enables them to retain and grow their workforce, even in the face of persistent crises.

Social enterprises are demonstrating valuable business insights into how Labour should approach its New Deal for Working People. Our latest Social Enterprise Advisory Panel report suggests that social enterprises are broadly supportive of Labour’s proposals, but also some areas that deserve careful attention:

  • Public sector contracts – Many social enterprises provide critical public services and rely on public sector contracts. It is imperative that these are properly funded, so that social enterprises and other businesses can pay staff fair wages and maintain decent working conditions.
  • Flexibility where appropriate – While social enterprises are vocal critics of exploitative contracts, in some cases, flexible contracts can be mutually beneficial to both the business and their employees. The focus should be on ensuring that such contracts are available, providing workers are happy with terms, and with enhanced protections to provide additional security.
  • New ownership models – From co-operatives to employee-owned firms, there are diverse ownership models that give workers a direct stake in their business. We need more support to encourage the establishment and growth of businesses where workers lead from the front.

Good jobs are the foundation of a prosperous economy, and while the details will need to be carefully considered, social enterprises continue to help deliver better working conditions. Social enterprises show that business should not fear the New Deal for Working People but embrace protections that will raise living standards, improve incomes, boost productivity and create an economy where businesses and workers can thrive.

You can download our latest Social Enterprise Advisory Panel report using the link below:


[1] https://www.cbi.org.uk/articles/is-your-business-budget-ready/

[2]https://cep.lse.ac.uk/pubs/download/ea066.pdf?_gl=1*lmgqij*_gcl_au*MTc1ODIxMTQyNi4xNzIyNTExNjky*_ga*MTc4MDcyNjUzLjE3MjI1MTE2OTI.*_ga_LWTEVFESYX*MTcyNDE0ODk3Ni4xLjAuMTcyNDE0ODk4MC41Ni4wLjA.

[3] https://www.socialenterprise.org.uk/app/uploads/2024/07/Good-Work-Working-conditions-in-social-enterprise-July-24.pdf