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Last Updated: Tuesday, 7 August 2007, 07:48 GMT 08:48 UK
Tories consider social tax breaks
Chef Jamie Oliver with his staff at Fifteen
Tories want to encourage social entrepreneurs like Jamie Oliver
Tax breaks to encourage investment and fight poverty in run-down areas have been suggested by a Tory policy group.

Charities spokesman Greg Clark said the "social enterprise zones" were aimed at attracting not-for-profit companies to aid communities.

A Community Bank would channel funds for projects and allocate tax relief, the party will say in a policy taskforce report.

Labour said the plans were "uncosted" and could lead to more privatization.

Conservative leader David Cameron believes economic "enterprise zones" set up by Margaret Thatcher in the 1980s offer a useful model for community regeneration.

Social enterprises can bring new life, money and jobs into areas of deprivation and begin to turn them round
Greg Clark
Conservative charities spokesman

Mr Cameron has already said social enterprise zones are the key to regenerating the poorest areas by encouraging the development of community-focussed organisations like chef Jamie Oliver's Fifteen group of restaurants.

The report, published on Tuesday, takes the process a step further by suggesting tax incentives for companies which reinvest their profits for the benefit of the local people they help and employ.

Planning guidance should also be streamlined to recognise the benefits the companies offer to communities, it says.

Investments needed

The recommendations do not automatically become party policy but they will be given a warm welcome by Mr Cameron.

Mr Clark said: "Social enterprises can bring new life, money and jobs into areas of deprivation and begin to turn them round.

"But too often they lack access to the capital they need to start up or to grow. This imaginative proposal would provide cash incentives to bring investors together with social entrepreneurs in the areas where they can make the biggest difference."

Existing measures

He said Labour efforts to encourage social enterprise were being choked by red tape.

"The government may have the right ideas on this, but their delivery is weak. They have come up with a lot of initiatives, which tend to overlap each other," he told the BBC.

"What social enterprises and charities of all kinds tell us is that they are completely tied up in the paperwork and when they do access funds from central government, it comes with so much paperwork and conditions attached that often they drown in it."

The social enterprise sector consists of about 55,000 companies, such as Cafedirect, Jamie Oliver's Fifteen, and the Big Issue, which reinvest profits to achieve social goals. They have a combined turnover of 27bn.

Charities minister Phil Hope said the government already offered help to social enterprises but Tory councils were reluctant to encourage them.

"There are many local Conservative authorities who have been given guidance from government about the relationship between third sector organisations like social enterprises and local authorities, and been given guidance on three-year funding regimes and being able to claim the full cost of the contracts that they engage in.

"If those local Conservative councils were to do some of the things we have advised them and given them guidance on now, I think we would see a much greater flourishing of these organisations in these areas."

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