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.

Photo: Dan Kitwood/Getty Images
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Conservative disunity is not all good news for Labour

The Tory leadership election could squeeze Labour out of the conversation, just like Blair and Brown did to the Tories.

The first test of opposition politics is relevance. Other key yardsticks - political plausibility, economic credibility, setting the agenda and developing a governing vision - all matter greatly. But making yourself a central part of the relentless cycle of daily politics, the terms of which are generally set by the governing party, is the first hurdle. It matters not whether you sign up to new politics or old: be relevant or wither. 

The issue of relevance is becoming a pressing issue for Labour. Take George Osborne’s favoured issue of the so-called national living wage.  Leave to one side the rights, wrongs and nuances of the policy and just consider the basic political dynamic it creates.  Osborne has, quite deliberately, set up a rolling five year argument over a steadily rising wage floor. On one side, is the Chancellor arguing that his policy is the right thing for Britain’s ranks of low paid workers. Pitted against him are ranks of chief executives of low-paying big business. With each impending hike they will holler at Osborne to go no further and the media will happily amplify the row. In response the Chancellor will quietly smile.

Sure, on occasions this will be uncomfortable stance for Mr Osborne (and if the economy takes a downward turn then his pledge will become incredible; there are always big risks with bold strokes).  Yet the dominant argument between the Conservatives and big business leaves Labour largely voiceless on an issue which for generations it has viewed as its own.

We may well see a similar dynamic in relation to the new national infrastructure commission – another idea that Osborne has plundered form Labour’s 2015 manifesto. It’s far too early to say what will come of its work looking at proposals for major new transport and energy projects (though those asserting it will just be a talking shop would do well not to under-estimate Andrew Adonis, its first Chair). But there is one thing we can already be confident about: the waves of argument it will generate between Osborne’s activist commissioners and various voices of conservatism. Every big infrastructure proposal will have noisy opponents, many residing on the right of British politics. On the issue of the future of the nation’s infrastructure – another touchstone theme for Labour – the opposition may struggle to get heard amid the din.

Or take the different and, for the government, highly exposing issue of cuts to tax credits. Here the emerging shape of the debate is between Osborne on one side and the Sun, Boris Johnson, various independent minded Conservative voices and economic think-tanks on the other. Labour will, of course, repeatedly and passionately condemn these cuts. But so have plenty of others and, for now at least, they are more colourful or credible (or both).  

The risk for the opposition is that a new rhythm of politics is established. Where the ideological undercurrent of the government steers it too far right, other voices not least those within the Conservative family - moderates and free-spirits emboldened by Labour’s current weakness; those with an eye on the forthcoming Tory leadership contest – get reported.  Where Osborne consciously decides to tack to the centre, the resulting rows will be between him and the generally Conservative supporting interests he upsets. Meanwhile, Labour is left struggling for air.

None of which is to say there are no paths back to relevance. There are all sorts of charges against the current government that, on the right issues, could be deployed - incompetence, complacency, inequity – by an effective opposition.  Nor is the elixir of relevance for a new opposition hard to divine: a distinct but plausible critique, forensic and timely research, and a credible and clear voice to deliver the message. But as yet we haven’t heard much of it.

Even in the best of times being in opposition is an enervating existence. Those out of power rarely get to set the terms of trade, even if they often like to tell themselves they can. Under Ed Miliband Labour had to strain – sometimes taking big risks - to establish its relevance in a novel era defined by the shifting dynamics of coalition politics. This time around Jeremy Corbyn’s Labour is up against a Chancellor willing to take risks and pick big fights: often with traditional Tory foes such as welfare claimants; but sometimes with people on his own side.  It’s also a new and challenging context. And one which Labour urgently needs to come to terms with.   

Gavin Kelly is chief executive of the Resolution Foundation