Want to know what citizenship means?

Don’t ask Bob Diamond, ask consumers…

Barclays cynical appropriation of the ‘citizenship’ agenda proves that the shift towards responsible capitalism will not come from the boardroom.  But neither should we look to shareholders or politicians to bring about meaningful change.  It is a new breed of consumer and the SME’s that serve them who are drawing up the battle lines in the struggle to find a better way of doing business.

Today Barclays is holding a ‘citizenship day’ to underline the banks commitment to being a good citizen. Bob Diamond even made citizenship one of the banks ‘execution priorities’ when he took over as chief executive, but what do they actually mean by citizenship?

Unsurprisingly the ‘what does citizenship mean to us’ section of their annual report is pretty vague. But the long and short of it is that Barclays subscribes to a very traditional conception of Corporate Social Responsibility.

"Our role is to help improve the lives of our customers. We must provide mortgages, allow businesses to invest and create jobs, protect savings, pay tax, be a good neighbour in the community while also generating positive economic returns for our investors."

Bob Diamond, Chief Executive, Barclays Bank

In other words, they believe, that as a bank, fulfilling their core business activities, hiring some staff, paying some tax, providing a few grants to community organisations and running the odd volunteer day makes them a good citizen.

There is a longstanding debate about the merits of CSR.  But the zeitgeist is shifting away from CSR towards the idea of socially responsible business. Increasingly we expect companies to not just ‘give a bit back’ but to internalise the claims of society and the environment by embedding values in governance structures, supply chains, HR and operations.   Socially responsible business breaks down the distinction between business, and social and environmental aims.

 Indeed, Barclays has attempted to tap into this value shift by emphasising how its lending activities stimulate ‘growth’. But surely making loans is just what banks do?  The same goes for conducting environmental impact assessments, treating customers fairly, or most the activities Barclays are celebrating today.  It’s hard to avoid the conclusion that Barclay’s newfound enthusiasm for citizenship is nothing more than a cynical PR push.

Clearly its not boardrooms who are going to be the driving force creating a more responsible capitalism.  But who will?

Much has been made in the media of "shareholder spring".  The though is that newly reinvigorated and emboldened shareholders will act as a restraint on corporate excess and encourage large corporations to act more responsibly.

But shareholders main interest is maximising their returns.  The current spate of shareholder revolts basically boil down to the complaint that senior staff in large corporations, and in particular in financial institutions like Barclays, have been creaming off too much of the revenues in pay and bonuses and not paying enough in dividends to shareholders. 

Although shareholder activism may succeed in ensuring a fairer deal for owners by tying executive remuneration closer to return on equity, the reality is that shareholders have no incentive to fundamentally change the way big business operates. If we want to see meaningful change in the way big PLCs, and in particular big banks, behave we cannot rely on shareholders alone.

Politicians of all stripes have also been fumbling towards a notion of ‘responsible capitalism’  in the attempt to show an electorate ground down by a stagnating economy and austerity cuts that they are not merely puppets in the grand farce of the financial markets.  Ed Milliband tried to distinguish between producers and predators whilst Cameron waxed lyrical about the ‘John Lewis economy’ but both notions remains nebulous and lack credibility.

Articulating a vision for a responsible form of capitalism is an almost impossible task for our political elite who has spent the last 20 years purging themselves of any such ideological impulses. Moreover responsible capitalism cannot be defined a-priori by policy makers. It is taking shape and growing on the ground.  The role of politicians is to respond to what’s already out there and create an environment in which best practice can flourish.

It is a new breed of consumers and the SME’s that serve them who are on the frontline of the struggle to build a more responsible form of capitalism.  For consumers, companies offer one choice in a market in which they have to balance a range of competing concerns about the world they live in. 

Consumers are not just concerned the particular product or service they purchase but the quality of the air they breathe when they walk down the street, the size of their grandchild’s future tax bill, how happy the people who serve them are to name a few.  These consumers are relating their consumption choices to wider macro level concerns and so inadvertently breaking down the distinction between being good consumers and being a good citizens.

New business models and vehicles for collaborative consumption, often facilitated by the social power of the internet, are developing to serve the needs of these consumers. They range from highly commercial bulk buying schemes like Groupon, to consumer cooperatives, through to peer-to-peer platforms and movements like move your money which harness consumer power to achieve broader social aims.

Barclays lecturing us on citizenship is more than a bad joke. If they were serious about citizenship and social benefit they should start by properly consulting with the people already making it happen.

The UK has already slipped back into recession and with the looming banking crisis in the Eurozone we have more economic woes in store. We urgently need our banks to be better citizens.  And if you don’t think Bob Diamond is the right person to make that happen then maybe its time to take matters into your own hands and move your money?

Louis Brooke works for Move Your Money UK. Find them on Facebook or Twitter.

Photograph: Getty Images

Louis Brooke is a spokesperson for Move Your Money UK, a not for profit campaign group, promoting alternatives to the big banks. He is also communications manager for London Rebuilding Society, and co-founder and chairman of educational resource company now>press>play.

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Find the EU renegotiation demands dull? Me too – but they are important

It's an old trick: smother anything in enough jargon and you can avoid being held accountable for it.

I don’t know about you, but I found the details of Britain’s European Union renegotiation demands quite hard to read. Literally. My eye kept gliding past them, in an endless quest for something more interesting in the paragraph ahead. It was as if the word “subsidiarity” had been smeared in grease. I haven’t felt tedium quite like this since I read The Lord of the Rings and found I slid straight past anything written in italics, reasoning that it was probably another interminable Elvish poem. (“The wind was in his flowing hair/The foam about him shone;/Afar they saw him strong and fair/Go riding like a swan.”)

Anyone who writes about politics encounters this; I call it Subclause Syndrome. Smother anything in enough jargon, whirr enough footnotes into the air, and you have a very effective shield for protecting yourself from accountability – better even than gutting the Freedom of Information laws, although the government seems quite keen on that, too. No wonder so much of our political conversation ends up being about personality: if we can’t hope to master all the technicalities, the next best thing is to trust the person to whom we have delegated that job.

Anyway, after 15 cups of coffee, three ice-bucket challenges and a bottle of poppers I borrowed from a Tory MP, I finally made it through. I didn’t feel much more enlightened, though, because there were notable omissions – no mention, thankfully, of rolling back employment protections – and elsewhere there was a touching faith in the power of adding “language” to official documents.

One thing did stand out, however. For months, we have been told that it is a terrible problem that migrants from Europe are sending child benefit to their families back home. In future, the amount that can be claimed will start at zero and it will reach full whack only after four years of working in Britain. Even better, to reduce the alleged “pull factor” of our generous in-work benefits regime, the child benefit rate will be paid on a ratio calculated according to average wages in the home country.

What a waste of time. At the moment, only £30m in child benefit is sent out of the country each year: quite a large sum if you’re doing a whip round for a retirement gift for a colleague, but basically a rounding error in the Department for Work and Pensions budget.

Only 20,000 workers, and 34,000 children, are involved. And yet, apparently, this makes it worth introducing 28 different rates of child benefit to be administered by the DWP. We are given to understand that Iain Duncan Smith thinks this is barmy – and this is a man optimistic enough about his department’s computer systems to predict in 2013 that 4.46 million people would be claiming Universal Credit by now*.

David Cameron’s renegotiation package was comprised exclusively of what Doctor Who fans call handwavium – a magic substance with no obvious physical attributes, which nonetheless helpfully advances the plot. In this case, the renegotiation covers up the fact that the Prime Minister always wanted to argue to stay in Europe, but needed a handy fig leaf to do so.

Brace yourself for a sentence you might not read again in the New Statesman, but this makes me feel sorry for Chris Grayling. He and other Outers in the cabinet have to wait at least two weeks for Cameron to get the demands signed off; all the while, Cameron can subtly make the case for staying in Europe, while they are bound to keep quiet because of collective responsibility.

When that stricture lifts, the high-ranking Eurosceptics will at last be free to make the case they have been sitting on for years. I have three strong beliefs about what will happen next. First, that everyone confidently predicting a paralysing civil war in the Tory ranks is doing so more in hope than expectation. Some on the left feel that if Labour is going to be divided over Trident, it is only fair that the Tories be split down the middle, too. They forget that power, and patronage, are strong solvents: there has already been much muttering about low-level blackmail from the high command, with MPs warned about the dire influence of disloyalty on their career prospects.

Second, the Europe campaign will feature large doses of both sides solemnly advising the other that they need to make “a positive case”. This will be roundly ignored. The Remain team will run a fear campaign based on job losses, access to the single market and “losing our seat at the table”; Leave will run a fear campaign based on the steady advance of whatever collective noun for migrants sounds just the right side of racist. (Current favourite: “hordes”.)

Third, the number of Britons making a decision based on a complete understanding of the renegotiation, and the future terms of our membership, will be vanishingly small. It is simply impossible to read about subsidiarity for more than an hour without lapsing into a coma.

Yet, funnily enough, this isn’t necessarily a bad thing. Just as the absurd complexity of policy frees us to talk instead about character, so the onset of Subclause Syndrome in the EU debate will allow us to ask ourselves a more profound, defining question: what kind of country do we want Britain to be? Polling suggests that very few of us see ourselves as “European” rather than Scottish, or British, but are we a country that feels open and looks outwards, or one that thinks this is the best it’s going to get, and we need to protect what we have? That’s more vital than any subclause. l

* For those of you keeping score at home, Universal Credit is now allegedly going to be implemented by 2021. Incidentally, George Osborne has recently discovered that it’s a great source of handwavium; tax credit cuts have been postponed because UC will render such huge savings that they aren’t needed.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.

This article first appeared in the 11 February 2016 issue of the New Statesman, The legacy of Europe's worst battle