Building Responsible Capitalism

I argue in Progress Online this month that responsible capitalism is a stage beyond CSR – and the third sector can help bring it about


Whilst Ed Miliband’s new year message does not specifically mention aspirations for the third sector, two priorities stand out: the call for Labour to ‘become a genuine community force’ and ‘an economy which works for all’.

The first is obvious. The involvement of Labour activists in community and voluntary organisations and campaigns, fulfilling our historic representational role in a context wider than simply electoral, is a prerequisite to making sure that we are in touch with ‘real people’ and best placed to represent their interests. The Movement for Change, together with initiatives like the self-styled Co-operative Council movement, know that and this cause should grow in confidence and influence, inside the Party and without, during 2012.

The second is perhaps not so clear to the purist or traditional within the Labour movement but as evidence exists to show how the mobilisation of third sector missions can help deliver public services better, why should it not benefit private sector ones too?

During 2012 a private company will start to work alongside two major charities to run a prison: Serco, with Turning Point and Catch 22. On the High Street we already see Macmillan Cancer Care plying its trade as a partner within Boots retail shops. Local authorities are used to funding organisations such as Shelter to provide quality advice on housing and homelessness and we now see conscientious construction companies like Wates effectively funding that charity for the same purposes.

This is not altruism. There is a business case for appropriate private sector involvement in campaigns, issues and communities and the third sector is the medium through which it can be achieved. In his Liverpool conference speech Ed spoke of ‘responsible capitalism’, an approach that Will Hutton has also advocated, and engagement is an important aspect of that cause. Media scoffing at the idea hides the fact that within corporations there is a growing awareness of the business case for private sector involvement in communities.

Whether such engagement takes the form of rational disposal of surplus goods to good causes, enhancing employee skills through community organisations or improving community assets through the donation of employee time and skills, the third sector is the vector through which laudable aims can be achieved. The dividends for the company include better employee engagement, enhanced reputation and the gaining of a voice for the corporate citizen in community life.

This approach risks becoming a small but growing elephant in the Labour room. It challenges traditional ‘dividing lines’ and yet is completely consistent with many of the ideas in the Purple Book of Progress – whilst not being explicitly advocated. The fact is that we overlook the resources that the private sector could bring to communities, organisations and causes at our peril, especially at times of public sector stress; a completely inclusive approach is called for in which all citizens, individual, collective and corporate, are engaged. Ed’s New Year words should be seen as an open door in that direction.