Social Enterprises

Department for Business, Energy and Industrial Strategy written question – answered at on 30 October 2019.

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Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps she has taken to promote (a) social enterprise and (b) other alternative forms of business.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps she has taken to promote community interest companies as a form of business.

Photo of Bill Esterson Bill Esterson Shadow Minister (Business, Energy and Industrial Strategy), Shadow Minister (International Trade)

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps she has taken to encourage people setting up businesses to embed (a) social and (b) environmental purpose into their business structures.

Photo of Kelly Tolhurst Kelly Tolhurst Parliamentary Under-Secretary (Department for Business, Energy and Industrial Strategy)

Holding answer received on 29 October 2019

The Government welcomes the contribution which social enterprises make to local growth and prosperity in our communities up and down the country. The UK’s company law framework allows for a variety of business forms, in part to suit those adopting social or environmental purposes.

We welcome the growth of purposeful businesses and have taken steps to encourage and enable this trend. The Government encouraged the business-led development of ‘Purposely’, a tool to help social entrepreneurs embed purpose into their businesses using the flexibility provided in the Companies Act; it also established the Inclusive Economy Partnership to harness the power of business as a force for good in our society; and it has supported the new Impact Investing Institute to grow social investment.

Community Interest Companies (CICs) are a huge success story. They are delivering benefits to more and more of our communities right across the UK. CICs have grown exponentially since 2005. There are now over 17,000 now on the public register. They are promoted by the Regulator of Community Interest Companies, which is an independent statutory office holder appointed by my rt. hon. Friend the Secretary of State.

The UK’s corporate governance framework has been updated to promote purpose in businesses. The UK’s Corporate Governance Code was revised, with effect from 1 January 2019, to promote the importance of having a clear corporate purpose. The Governance Principles for Large Private Companies developed last year by Sir James Wates do the same. Company reporting requirements, also introduced this year, now require companies to report how they have regard to wider societal interests within the meaning of Section 172 of the Companies Act.

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