Europe can teach UK a thing or two about co-operation

Live8 proved there is more than one way to demonstrate social solidarity, just as there is more than one group to whom we can show our support.
For all the talk from France and Germany in recent weeks about the need to protect the European social model, Live8 underlined that it is more important to ‘solidarise&#039 with land workers in poverty stricken Africa than with land owners in rural France.
Strangely, the arguments that have riven the European Union over the future of the social model have not been accompanied by any clear definition of what that social model actually is.
While most EU member states believe part of the role of governments is to protect the weak from the strong, they diverge in how they believe this should be done.
In several EU countries, notably France and Germany, the social model involves the use of social insurance to meet health care costs. With social insurance, the insurer picks up the medical bill, with most of the premiums paid by employers.
The state meets the costs for the unemployed and those who are long term sick. While this has helped provide high quality yet affordable health care for many years, it is now acting as a disincentive to companies to operate in those countries.
Consequently, social insurance is encouraging employment transfer to other EU countries such as the Czech Republic. Social insurance may fade away under pressure from globalisation and the single European market.
The Common Agricultural Policy seems at the heart of the French vision of the social model. Yet this a form of protectionism benefiting French farmers which helps keep agricultural workers in poor countries – especially Africa, but also in Central America and elsewhere – impoverished as they compete against subsidised food producers in the wealthiest nations.
For Germans the social model is identified with co-determination – having representatives of the workforce on company boards. But while this is to be praised, it is another practice which seems doomed from international and European competition. Co-determination remains unique to Germany.
The single market was always bound to destroy costly or inflexible practices which are not taken up by all EU member states.
Yet there is another centrepiece of the social model which all EU member states should be able to agree on which offers economic growth, increased employment and better social provision without downsides – co-operation.
Learn
Here the UK – despite our heritage of the Rochdale Pioneers and Robert Owen – can learn from most of the rest of continental Europe. Of the large European economies, the UK lags far behind in terms of the number of people employed in co-operatives.
A recent EU report found that while co-ops are responsible for 0.66 per cent of employment in the UK, the figure in Spain is 4.58 per cent.
According to research from CIRIEC, co-ops in Italy, Spain, Germany and France all employ at least half as many people again as in the UK – almost three times as many in the case of Italy.
Nor is this a division between ‘old&#039 and ‘new&#039 Europe, as US defence secretary Donald Rumsfeld has characterised the continent.
There has been impressive co-operative development taking place in Scandinavia over recent years – an extra 15,000 people gained work in Finnish co-ops in a mere five year period.
Co-ops are also regaining ground in the former Eastern bloc countries which are new EU member states. Last year&#039s Krakow conference on co-ops heard that the new member states contain 15,000 co-ops, employing more than 700,000 people and almost 15 million members.
Significantly, much of the growth in European co-ops is in activity areas where the UK is weak. In Scandinavia, co-ops are taking a leading role in providing childcare. Italy has led in developing social care co-ops, supplying work for people isolated from the labour market – through physical or mental illness or disability, after imprisonment, or recovering from drug dependency, for example. In Germany, co-ops helped improve waste management and recycling.
Economic
Not only do these activities represent often unmet economic and social needs in the UK, but each is situated firmly in the gap between the public and private sectors where public bodies can act as &#039market-makers&#039 or &#039market managers&#039.
An example is in social care, where local authorities do not merely provide some social care services themselves and procure other services, but they have a statutory duty to make sure the care market functions effectively.
As a new report from the King&#039s Fund has reported – it focused on London, but the researchers say the conclusions apply across the UK – the social care market does not function effectively. There are too few suppliers, there is too little diversity, some care is over-priced.
One response, from the Improvement and Development Agency – a public body which pushes for local government improvement – is that councils should promote more social enterprises to provide care services to help fill this gap.
There is an equal and obvious need for more provision of affordable child care and effective waste management.
For these markets to be developed, local authorities, regional development agencies and the governments of the devolved nations need to consider more fully their role in stimulating ‘quasi-markets&#039 and how they can support and encourage the development of social enterprises to convert social needs into income-generating and job-creating businesses.
This has happened in Italy and it should work in the UK. If Tony Blair pushes a commitment for co-ops to fill the quasi-markets gap – where free markets can probably never work effectively – it would show that the UK is not opposed to a social model, but is helping to define it for the future.
Some humility from Britain in showing its willingness to learn from elsewhere in the EU might also help the next few months highly charged EU meetings go more smoothly.