How our new government can create an economy that benefits all
Last month we saw a flurry of manifesto announcements from political parties; all in a bid to win the backing of the public in the general election. Now that polling day has passed and a Labour government has been elected, we reflect on some of the promises the party made in its manifesto and ask the important question: where do these commitments leave British businesses and the role they can play in creating the future we need?
At the forefront of Labour’s manifesto was a focus on the creation of a “mission-driven government.” It was positive to see the party recognise the ways in which business can help achieve these collective goals. In its five missions, Labour advocates that “sustainable growth requires government to be a strategic partner with business" and that “a strong economy can only be built on the contribution of every community and every person — the many not the few.”
Labour’s New Deal for Working People is also welcome, proposing an end to zero-hours contracts, fire and rehire alongside enhanced rights for parental leave and sick pay. And the party has pledged to crack down on the water companies that are polluting our coasts, rivers and lakes through illegal sewage dumping.
These are all steps in the right direction, and the values behind them are similar to the ones that underpin the B Corp movement. Across the UK, our 2,000-strong community of B Corps are demonstrating the value of businesses acting in the interests of all stakeholders — employees, customers, local communities and the environment — not just shareholders.
Within each and every one of these companies, there are pioneers — leaders who have taken the leap to do things differently, and employees who are modelling behaviours with people and the planet in mind.
Whether it’s Faith in Nature or House of Hackney appointing Nature to their board of directors, innocent introducing a policy to support staff undergoing fertility treatment or Notpla creating compostable packaging made out of seaweed and plants, B Corps are pushing the boundaries in pursuit of positive impact.
But we know it’s not enough for a selection of companies to choose to do business the right way. We also need the government to take action and pull on the regulatory levers that will enable a more purposeful approach to business to become the norm.
And so it’s time for our new mission-driven government to take inspiration from mission-driven business. With a little courage and innovation, this government has the power to unlock partnership with every business, levelling the playing field and raising standards across our economy.
So what now?
A change to the law that governs how businesses operate is a good place to start.
The Better Business Act is calling for an amendment to Section 172 of the Companies Act 2006 to empower company directors to make decisions that align the interests of shareholders with those of wider society and the environment. It is now backed by a coalition of almost 3,000 organisations with names including Tony’s Chocolonely, the Institute of Directors, Virgin and Iceland.
As well as creating an economy that works for everyone, research has shown mission-driven business models could generate a £149bn (7%) boost to UK GDP per year and a £2,288 annual salary rise for the UK’s lowest paid workers if adopted at scale.
We hope to work with our new government to make sure British business is fit for the future so that it reaps the purpose dividend. Our country cannot afford to miss that opportunity.
Chris Turner is Campaign Director of the Better Business Act and Executive Director of B Lab UK.
