The future of Britain is at stake. Ethical Corporation rounds up the main corporate responsibility issues in the debate ahead of the UK general election
Promises, promises. In April, the various political parties that will contest seats in the 7 May United Kingdom general election published their manifestos, setting out their pledges to the country, should they form the next government.
In terms of the next prime minister, it's a two-horse race – the Conservatives' David Cameron or Labour's Ed Miliband. But the UK political scene has become more fragmented in the age of austerity and smaller parties could also play a role in determining the next government's priorities. The manifesto launches of the Scottish National Party, the Liberal Democrats, the UK Independence Party, Plaid Cymru and the Green Party also attracted much attention and comment.
From a corporate social responsibility point of view, there is much to digest in the parties' manifestos. There are significant and widely varying commitments on environmental, social and corporate governance issues. One of the main themes running through the manifestos is fairness – that the cost of recovery from the economic crisis should be spread fairly, that companies should play their part and that the UK and its corporations should play their role in the quest for global sustainability.
Jon Hudson, public affairs manager at corporate responsibility organisation Business in the Community (BITC), says: “There are a broad range of policy areas that contribute towards a fairer society and more sustainable future, which we would hope to see the next government address, whatever form that government might take.”
For BITC and its wide-ranging corporate membership, Hudson says, these priorities include equality of education and training, and “enterprise growth, the environment and use of natural resources, as well as issues affecting employees, such as diversity, health and working until later in life”.
He adds that for the next government, “long-term trends such as an ageing and more diverse population, natural resource constraints and climate change have to be looked at alongside more immediate business challenges such as low productivity and skills shortages”. Prominent among the main corporate social responsibility-related issues mentioned in party manifestos are taxation, decarbonisation and other energy and environment issues, employment conditions and corporate governance and reporting.
A greener Britain?
On the environment and sustainability, manifestos range from the obviously green Greens, who among many other things call for closure of all coal-fired power stations by 2023 and a nuclear phaseout within a decade, to UKIP, which barely mentions climate change in its manifesto, except to say that it will scrap UK long-term greenhouse gas reduction targets and will “investigate ways to assist and rejuvenate the coal industry”.
One environmental NGO source, who asks not to be named because of a policy of political impartiality, says that of the main parties, the Liberal Democrats “have a history of recognising the importance of the environment” and have perhaps the “best” manifesto from a green point of view. The Liberal Democrat manifesto promises a “Green Britain Guarantee,” which would consist of five laws on nature protection, zero waste, green transport, decarbonisation and green buildings.
However, there are “aspects in all of the manifestos that are good”, the source says, highlighting Conservative pledges to preserve biodiversity and Labour's “more aggressive” proposals on decarbonisation.
It is, in fact, the Labour promise on decarbonisation that stands out. Labour says its measures to tackle climate change will include “a legal target to remove the carbon from our electricity supply by 2030”. Does this mean a complete switch to renewables within little more than a decade? Labour clarified to Ethical Corporation that its pledge includes “renewables, nuclear and carbon capture and storage” so that fossil-fuel power plants can continue to operate.
Labour adds that it will also carry out a study by the end of 2015 “on how we can maximise the development of green gas”, meaning methane captured from landfill sites, coal mines or other sources. Green gas will be prioritised as a “cost-effective, locally sourced, low-carbon source of heating,” Labour says.
David Nussbaum, the chief executive of environmental group WWF-UK, says: “The environment is no longer a fringe issue in the minds of voters … Party leaders should use this election to forge a national consensus around addressing climate change, restoring biodiversity and creating a low-carbon economy that benefits everyone.” However, in early election campaigning there was limited discussion of green issues, and the environment is “still too close to the margins of political debate”, Nussbaum says.
One significant election issue, and a major point in the debate around fairness, is zero-hours contracts, under which employees are on-call, but with no guarantee of a minimum number of hours.
Labour says it will ban “exploitative” zero-hours contacts. The Conservatives stop short of this, but say they will take measures, including a prohibition on “exclusivity in zero-hours contracts” – a measure UKIP would also take. The Liberal Democrats say they will “stamp out abuse” related to zero-hours contracts and will create “a right to make regular patterns of work contractual after a period of time”.
Joseph Wright, a research fellow at thinktank Civitas, says Labour in particular has “given zero hours contracts a huge profile”, but hard data is lacking on their prevalence and the types of people, such as students, that are on such contracts. Wright adds that “politically there isn't a consensus” on zero-hours contracts, which politicians such as Conservative secretary of state for work and pensions Iain Duncan Smith “still regard as providing 'necessary flexibility' for the labour market, even if that flexibility works only for the employer”.
Another fairness-in-employment issue is wages, in particular the minimum and living wages, respectively £6.50 and £7.85 per hour (the living wage is £9.15 in London). On the living wage, the Conservatives say they will “encourage business and other organisations to pay it whenever they can afford it”. Labour promises a living wage reporting obligation for companies: under a Labour government, listed companies would be required to disclose whether or not they pay it.
A major fairness issue running through the election campaign is, of course, tax. For corporations, Labour promises closure of tax loopholes and “tougher penalties for those abusing the tax system”.
Highly paid executives might also note the Labour promises to introduce a 50p tax rate for earnings over £150,000. A further – well-publicised – Labour measure would see the abolition of the “non-dom” status, under which individuals domiciled in foreign jurisdictions can avoid some UK taxes, even if they spend most of their time in the UK. The Scottish National Party would broadly fall into line with the Labour tax promises.
A specific tax issue raised in the main party manifestos is so-called country-by-country reporting, or the breakdown by companies of their revenues, profits and taxes paid per country, rather than aggregate figures. Guidance on country-by-country reporting has been prepared by the Organisation for Economic Cooperation and Development. The UK plans an obligation for companies to use country-by-country reporting in their filings to the tax authorities, but with no public disclosure requirement, at least to start with.
The Conservative manifesto says the party will “consider the case for making this information publicly available on a multilateral basis” – in other words, if other countries also do so. Labour says it will “seek international agreement” on disclosure of country-by-country reporting information, but will “act at home” if this is not forthcoming. Labour also says it will require British tax havens to make the identities of their registered companies and their “real owners” publicly available – an anti-tax-avoidance measure that is not mirrored by a similar pledge from the Conservatives.
John Christensen, executive director of campaigners the Tax Justice Network, says that, while not endorsing any political party, “we would certainly stress the importance” of having publicly available country-by-country information. Voters “don't buy the austerity argument that there's no money out there”. Rather, companies have been treated too leniently by tax authorities, he says.
However, a spokesman for the Confederation of British Industry told Ethical Corporation that public disclosure of country-by-country information would put “commercially sensitive information into the public domain, which would result in UK firms being put at a competitive disadvantage, deterring would-be investors”.
Companies as a rule will not express an opinion on the outcome of a general election. Political party manifestos cover a wide range of issues that affect different sectors differently, and companies are likely to find some things they like and some they don't in each set of pledges. Depending on who forms the next government, the 2015 UK general election could have very different outcomes in corporate responsibility terms – but that, of course, will also depend on politicians keeping their promises.election politics UK politics