Everyone’s Business

The Wales Co-operative Centre have started a new blog, looking at issues of poverty in Wales

The blog is now up and running on http://www.everyonesbusiness.coop/en/

My contribution is as below:-

Co-operating for self-employment

Nothing overcomes poverty better than well-paid work. It not only provides income, but it helps to develop people’s sense of self worth. A job provides our sense of identity. Even when unemployed we desire to be an unemployed something, not just a non-entity.

The fastest growing sector of our economy is the self-employed. Once derided by business development specialists as “lifestyle businesses” self employment is rapidly becoming a very large part of our economy.

Research by new economics foundation (nef) in 2008 indicated that the self-employed sector accounts for one in four jobs in the UK economy.[1] Since the banking sector collapse in 2008, self-employment at 4.6 million has soared to its highest UK level for over 40 years. UK job figures show that 50% of new work in the UK since 2010 has been created by a surge in the number of self-employed people.

However, if we are at the bottom of the pile, no money, little resources, starting out in self-employment is hard. From 1996 to 2002 I was involved with the Prince’s Trust, which at that time provided a significant step up for those under 25 entering self-employment, offering them both a loan and a start-up grant. Since then its funds for this work have diminished considerably and it now concentrates on other work with young people. During 1998/99 I also ran, on the Trust’s behalf, the Government’s New Deal for the Self Employed across Wales, which was funded through the Employment Service, and which for a short period was able to help many unemployed young people start out in business. So some at least of the groundwork has been proven.

One of the interesting experiences from that time was that some of those who became successful sent the money back so we could use it again, even though it was a grant with no strings attached.

So, how to go forwards? How to tap into that spirit?

The proposal is simple:-

  • A mutually owned, independent finance system for start-up businesses and the self employed.
  • A system that needs Government funds to underpin it, but if well managed should cost little, and maybe even make a profit.
  • A system of grants and loans for those starting out in business, which are repayable into a common pot.
  • A system that takes higher levels of risk than other finance schemes, but asks for a higher return – a 10% share of your profits over the next 10 years on top of the loan repayments and interest.
  • A system that’s a bit like “The Apprentice” but gives more, and leaves you 100% of your business at the end.

Alex Bird

[1] Pat Conaty, Rosemary Foggitt, Steve Bendle and Rumbi Tarusenga (2008) Self-help and Mutual Aid – a Mutual for the self-employed for underpinning local economies across Britain, new economics foundation.

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