There has been for some time some thought as to whether ‘responsible capitalism’ is ultimately doomed as an electoral project. Nobody would dispute the observation that the fallout from the 2008/9 financial crisis has had a profound effect on Britain’s economy, and some people have been surprised that it has not created more of a sense of resentment towards capitalism. Labour, because of the deafening voices of the Conservatives and the Liberal Democrats (and the media who support them) have no been able to rebutt the narrative of reckless spending vs. the money required to bail out the banks. It seems that nobody wishes to go openly on the record to say that they object to record spending on the public services, nor resent the highest levels of public satisfaction, and that any success by Labour in this regard was a ‘local phenomenon’. Four years on, the country has yet to return to the level of economic activity it enjoyed immediately before the crisis hit, and any changes in the economy are drivers to a prominent part-time flexible workforce with little or no employment rights. The biggest challenge facing Britain’s politicians is how best to restore economic growth while getting the country’s ballooning government deficit back under control. Borrowing is still a catastrophic problem in the UK economy, due to lack of sustainable growth, masked to some extent by an Olympic bounce in the latest ONS GDP figures.
The feeling of malaise about corporates, and the diminution of rights of poorly paid workers, may be part of a resentment against institutions in general. There is no doubt, however, have profound operational failures in the BBC may have a wider systemic substrate underlying them in their management structure. The response to the Savile affair has demonstrated what the BBC is quite good at; giving the appearance of being self-critical, while in fact closing ranks and surviving on a Darwinian instinct of self-survival. Part of this wider mistrust may be not an objection that people or institutions fail, but that the wrong people are succeeding or failing. In a perhaps accidental and unintended way, Ed Miliband’s “one nation” might be tapping into this. It seems perfectly possible for News International to generate somehow a healthy dividend for its shareholders, despite the quite diabolic revelations of News International, even subject to an ongoing judicial process in the criminal courts. This year, ‘ethical banks’ have reported a massive increase in the number of new customers, presumably fed-up people switching from Barclays or NatWest. Co-operative Bank, for instance, said that there’s been a 25 per cent increase in online current account applications in the past week. The ethical bank Triodos reported a 51 per cent increase in online account applications over the past week and said it opened three times as many UK accounts as usual. Mutual building societies have also benefited from the disillusion with banks, with the Building Societies Association claiming a 30 per cent increase in inquiries. HSBC has been forced to apologise over revelations that staff at its global subsidiaries laundered billions of dollars for drug cartels, terrorists and pariah states. The news is the latest in a long line of revelations about dubious banking practices in the UK, including the Barclays Libor-fixing scandal, the catastrophic IT error at the RBS group, and countless mis-selling scandals, most famously the mis-selling of payment protection insurance. If all this bad bank news is getting to you, is it possible to put your money with an ethical alternative or is such a concept just pie in the sky?
Starbucks has suffered serious harm to its reputation over revelations that it pays no corporation tax in the UK, according to pollsters YouGov. The news comes as the coffee shop chain faces calls from MPs for a consumer boycott over its perfectly legal tax affairs. Reuters reported this week that Starbucks had paid £8.6m in corporation tax since it first opened in the UK in 1998 – and none since 2009. Corporation tax is paid on profits, and Starbucks UK has not reported a profit for the past three years. Despite this, Starbucks officials have regularly described the UK business as “profitable”. YouGov’s BrandIndex, a daily measure of brand perception, reveals that Starbucks, which makes much of its ethical corporate policies, has declined markedly in people’s estimation, according to The Guardian. Starbucks’ ‘buzz’ score, which is a measure of the number of negative and positive comments consumers have heard about a brand, has fallen from +0.7 to -13.9 – its lowest in four years. Starbucks’ reputation score also dipped: from +4.6 a week ago to -3.9 following the tax revelations. Likewise, ethical concerns have been raised about work assessments in the British Medical Journal. In November 2010, Atos announced a three year extension to its contract with the department, worth £300m (€350m; $480m), to “support the UK government’s welfare reform agenda. Atos is the sole contractor, and the medical reports it generates are used to make decisions about eligibility for employment and support allowance. This benefit, which has been replacing incapacity benefit and income support since 2008, is paid to people who are medically unfit to work because of illness or disability. The weekly allowance, once the claim has been verified with an assessment of capability, is worth up to £96.85. The government estimates that 2.5 million UK citizens receive sickness benefits at an annual cost of around £12.6bn to the taxpayer. Indeed on 26 July 2012, the High Court granted permission to two disabled people to bring a claim for judicial review against the Secretary of State for Work and Pensions to challenge the operation of the Work Capability Assessment (WCA).
The first question that all political parties should ask, in response to the millions of lost voters, is not “how can we get these voters back?” but “why do political parties feel they can succeed despite being useless?” The narrative that the Cameron government is incompetent, in a permanent omnishambles, causes ultimate anger, if Cameron can return with a working majority in 2015, despite every fiasco under-the-sun, ranging from the economic policy, to the badger cull, forests or energy policy. This is akin to Starbucks, Atos, News International, and other corporates still delivering a healthy profit, despite massive reservations about how they do business. Minority shareholders feel powerless on the whole, because the legal avenues to them in theory, such as unfair prejudice, most often do not work in their favour. Millions of voters, who do not feel that they have recourse through the ballot box, might prefer just to drop off the electoral register altogether.
