Ed Miliband is onto something

Whether or not you are a Labour supporter, you know instinctively that Ed Miliband is onto something when he says we need an economy which reflects the values of – and works for – most British people. He is speaking not just for the mainstream majority in this country, but also, for the very large number of businesses large and small who know perfectly well that decent conduct guarantees the bottom line.
 
It was remarkable, for example, to hear Bob Diamond, the Chief Executive of Barclays Bank, give the inaugural Today Programme Business Lecture last week in which he stressed so heavily the importance of restoring trust in bankers and suggested that banks could become good citizens. Barclays have made some solid steps towards being a better citizen, as Diamond called it. Their response in the wake of the riots – giving emergency support to business and personal customers affected by the disturbances – was community spirited, as businesses in my own constituency experienced. 
 
He talked a good deal about restoring trust in bankers, but to ask people to trust bankers again, is a big ask given what happened in the financial crisis.  We need to be realistic that the deterioration of the economy has been matched by so many people retreating into the relationships they trust most – only their friends and family can be rewarded with that trust – so that the prospect of trusting the banks again will probably take years. Even so, there are incremental steps that banks and businesses can take, but of course successful businesses of all sizes know that decency in their conduct also guarantees the bottom line.
 
So the answer is not a big bang of trust regained, but small steps taken to build great confidence in our system of business in general. Since Labour Conference, Ed Miliband and the Shadow Cabinet have been setting out how we can improve the way we do business in this country. This is not so much about the regulatory reach of government as it is a closer connection between public opinion and the behaviour of certain organisations which have abused public confidence.
 
Ed Miliband’s plan to put British values back into the British economy change the values of our economy should never be seen as “anti-business” or even more ludicrously, about being envious of rich people. It is, however, about being anti-business-as-usual. Labour’s mission has always been to bring greater decency into the economic system – to bring an end to the oppression of working people, whether through poor wages, dangerous working conditions or lack of opportunities to move up the ladder of work. While the terrible conditions of the mines and the sweatshops that once existed, do not thankfully exist in Britain today, there are new inequities and fresh challenges which once again require action.
 
This is not to misunderstand the nature of global economics, but to recognise that many of our best businesses agree that the values which guide our economy need to change. Our task is to build that coalition of support for this argument into a movement for that change. Whether it is by pursuing a Living Wage, as London Citizens successfully did with HSBC and as Islington Council are doing through their new contract with local businesses. Or, whether it is by looking at wage ratios and asking if it is fair that a top executive is currently paid 145 times the average wage. According to the High Pay Commission, by 2020 the differential between top and average will be 214 times.
 
In Government we tried to push forward the then new idea of Corporate Social Responsibility – and achieved a few steps forward, such as introducing new reporting requirements on business – but businesses who are serious about CSR know that it’s more than just a few good deeds noted in their annual report. It’s more than allowing staff a bit of time off for volunteering –important though that is – it’s about looking at the whole ethos of their company and understanding where they have an opportunity to add value to society along the way. Companies need to put their responsibilities to society in the mainstream. The expression of this new responsibility could begin in a shared sense of outrage at the almost one million young people who are out of work. Every business must begin looking at the opportunities they can give to these young people for apprenticeships, work experience and training as a reflection of their duty to their local communities.
 
So those businesses who go out of their way to accept local apprentices understand that their responsibility to society is more than simply looking to those who are already qualified. Employers who give employees the extra flexibility to look after children or parents in their care, get that the long-term need to ensure staff don’t leave the workplace, trumps the short-term inconvenience. This isn’t about saying private companies should not focus on the bottom line. It is about ensuring wealth creation runs alongside greater decency in our workplaces.
 
That’s why Ed Miliband and Ed Balls have launched a five point plan to kick start economic growth, including creating 100,000 jobs for young people paid for by a tax on the bank bonuses coupled with a short-term VAT reversal to help put money back in the pockets of those who need it most.
 
Labour will also be on the side of businesses creating jobs by investing and training their workforce. We will be on the side of entrepreneurs creating wealth by taking risks and innovating. But Ed Miliband’s call for a more responsible capitalism chimes not only with the public mood but also the immediate needs of the economy and the long term interests of business.   He is on to something and it is in every family’s interests that we start to form the movement which builds this argument into a winning call to action.
 
Tessa Jowell MP is the Shadow Cabinet Minister for the Olympics and London and the Member of Parliament for Dulwich and West Norwood