A general election could come as early as this time next year. Certainly John Major must go to the country by June 1997 at the very latest. Given Paddy Ashdown’s decision to end ‘equidistance’ and so not sustain in office a minority Conservative government, Labour will be the dominant force under any outcome other than another overall Tory win.
The implications for corporate community involvement are immense – today it is largely forgotten how much community affairs in Britain has been determined by the present government. In its infancy in 1979, Business in the Community itself was only founded in 1981.
Conservative legacy
The present government’s approach has been clear. Tax rates for companies have been cut substantially (from 52% to 33%), as have those for higher-paid staff (from 90% to 40%). In return, companies have been encouraged to recognise wider social obligations. The theory was that tax cuts would stimulate enterprise, while greater corporate community involvement would result in more efficient and innovative management of social concerns. Whether right in practice, more companies have got involved. Just a few examples include:
training – TECs (LECs in Scotland) are business-led vehicles for the delivery of billion pound training programmes previously undertaken by civil servants;
education – City Technology Colleges are partly private funded; all schools and colleges are encouraged to have governors with private sector expertise; the curriculum has been rewritten, with companies providing more input; teachers routinely go out on industrial placements;
environment – for example, the call by the Advisory Committee on Business and the Environment for the government to intervene to encourage more recycling led directly to the Chancellor’s decision to levy a land-fill tax;
arts and culture – the Business Sponsorship Incentive Scheme – now the Pairing Scheme – has helped corporate arts sponsorship to grow to £70 million pa;
social and community issues – direct local authority funding of voluntary sector organisations has been squeezed while companies have been encouraged to donate more, so meeting Per Cent Club targets.
Today most senior executives accept that their companies have a part to play as deep rooted problems in society can only be tackled effectively when all the parties, public, private and voluntary, are working together. The present government has repeatedly exhorted companies to “get involved”. It has stopped short of imposing any duty so to do.
Labour’s approach
A new government, keen to have an impact but subject to severe public spending constraints because of tax pledges, will be very tempted to place obligations on companies, either directly or by giving employees greater rights. An obvious example is training, where Labour wants to have a big impact. The unattractiveness of raising general taxation led to talk of a levy from which companies with good training provision would be exempted. Now thinking is said to be moving towards giving individual staff a right to training, perhaps with a set number of days off a year or through company-funded individual learning accounts.
Interesting ideas, but none of this is defined in formal policy papers; ideas are floated but the imaginative work of policy think-tanks has no official status. So the views of Labour front-benchers is the best guide to what they will actually do in office. When Tony Blair addressed the Per Cent Club in November 1994, he highlighted four priorities:
the economic and social costs of unemployment and welfare dependency;
the need for high quality education for all;
an industrial policy which encourages investment and capacity building;
a positive and constructive attitude to Europe.
The Blair/Brown approach will be substantially different from that of previous Labour administrations and also of Labour policy making even in recent years. The defining characteristics of this approach will be:
direct government intervention will be minimal, but Labour’s determination to tackle the twin problems of lack of international competitiveness and social disadvantage will be pursued by seeking a broad-ranging partnership with industry; unlike during the Thatcher years, the emphasis will not be on moving the boundaries between business and state but in bridging them;
Blair’s strong moral sense, stressing responsibilities as well as rights, extends naturally to corporate responsibility – the obligations and duties of companies to go beyond simply what they can get away with;
both Brown and Blair understand the importance of bottom-up solutions, involving all those most directly affected – the thinking behind much local business partnership activity; they are naturally sceptical of grandiose government ‘quick-fix’ programmes.
Areas for change
So community affairs will retain and probably increase its importance. Expectations to get involved will grow, not diminish. What will change, apart from the general context, is the focus of programmes and the specific topics these address. The areas of greatest change are likely to encompass:
unemployment, especially among the young: if Gordon Brown is to succeed in his stated aim of abolishing youth unemployment, he will have to go beyond merely extending current incentive schemes and get companies directly involved; tackling long term unemployment, often among the 50+ age group, will also feature;
harnessing new technology and the information superhighway, with social objectives not just economic;
employees, including more childcare through company provision, rights of employees to consultation and implementation of the Social Chapter;
training, with a levy or other mechanisms to increase investment in skills;
education, including changes to the curriculum to make it more relevant to industry and a University for Industry, modelled on the Open University but using distance learning direct to the workplace and offering not academic qualifications but commercial and technical skills;
small businesses, including getting banks and venture capital providers to plug the £50,000 to £500,000 ‘funding gap’; banks may also face duties to help community regeneration, along the lines of the Community Re-Investment Act in America;
corporate governance, with obligations to consult shareholders explicitly about executive remuneration packages and to give a greater role to independent directors;
environment, perhaps placing duties to report environmental performance in annual reports;
local economic and environmental regeneration, led by local councils rather than central government agencies with a strong emphasis on the regions;
more infrastructure investment, privately funded, with Treasury rules relaxed.
If the details are as yet uncertain, the fundamentals are clear: senior Labour politicians are determined once in office to transform society. They may have eschewed heavy public spending and state nationalisation – but they have not ceased to be interventionists. Their only option is therefore to put incentives – and in some cases, obligations – on others. And that means the private and voluntary sectors.
Europe and beyond
But it is not just trends at home which will affect community involvement programmes. Although the excitements of the Single Market, ‘1992’ and the Maastricht Treaty have abated, and the debate has moved on to monetary union, the reality is ever more integration, as witnessed by the Works Council directive. In theory, the so-called British opt-out has exempted UK-based companies; in practice, the scale of their operations across Europe means that for most it effectively applies.
Historically, the European Commission has been slow to recognise the role of companies in addressing social issues. This is now changing. In May 1995, it organised a major conference in London for leading companies to address social exclusion. The Commission White Paper in 1994, Growth, Competitiveness and Employment, the brainchild of Jacques Delors, the outgoing President, was noteworthy in its explicit inclusion of companies, especially in:
education/business partnerships;
using intermediate labour-market agencies, such as environmental and social service non-profits, as a stepping stone into the mainstream labour market;
corporate involvement in community development programmes;
private investment in infrastructure projects.
So at home and abroad the old certainties about clear boundaries between the public and private sectors are giving way to greater fluidity. Community affairs managers are uniquely skilled at operating on the interface between the sectors. Now is the time for them and their companies to start a debate about the role for business tomorrow. They should be reviewing their existing policies and projects in the community and assessing their relevance to this new public affairs agenda. At the very least, a prudent dialogue with Labour policy makers now might avoid the imposition of unreasonable social obligations later.
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