My Lords, I join other noble Lords in congratulating the noble Baroness, Lady Scott, on having secured this debate and on the illuminating way in which she introduced it.
The advent of a so-called age of austerity is an invitation in the industrial countries to think again about how we live. Rather than simply talking of a return to growth, with its premise of endless consumption, we should be considering more profound social goals. In place of austerity as a negative value we should be talking of sustainability, both economic and environmental, as a positive one. There is a great deal of discussion at the moment—rightly, in my opinion—about rebalancing the economy in terms of manufacturers and finance. However, we should also be discussing how to rebalance the economy in terms of social and moral objectives.
I do not really like the somewhat crummy term of the “big society”, which seems to be an ad man’s notion, but there is no doubt that we should be thinking creatively about how civil society can be revitalised. To me this does not mean denying the importance of the state or of markets; it means working creatively with them. Following the noble Baroness, Lady Randerson, I shall concentrate on social enterprise rather than on the voluntary sector as such.
Social enterprise is conventionally a Cinderella when it comes to funding. The challenge today is to try to mainstream it. One can define a social organisation, at least roughly, as a firm in which surpluses are created for directly social purposes rather than the desire to maximise profit for owners or shareholders, which of course does not mean that such organisations cannot themselves be very profitable. According to official statistics, there are about 62,000 social enterprises in the UK, most of them small. However, some very interesting recent research shows that there are probably five times as many so-called hidden social enterprises. These are nominally for-profit enterprises in which social and environmental purposes loom large and which reinvest a substantial part of their surplus to achieve these purposes. In other words, there is a large hidden strata of socially and morally motivated companies beyond the orthodox measurement of social enterprises.
Hidden social enterprises, the research shows, have superior growth patterns compared with organised businesses. In the research in question, each of them created nine jobs on average in a two-year period
compared with six for straightforward smaller enterprises. Interestingly, twice as many hidden social enterprises have been set up by women rather than men. As the researchers observe:
“This research places entrepreneurs exactly where they should be—at the centre of the debate on the way business moves forward after the financial crisis”.
Can all this be mainstreamed? It can and should, and we should be thinking of the large corporations here, not just the small ones. Take the example of the fast-food corporations, which pay only a tiny amount of the costs that their advertising and the resultant changes in diet have in the population. Obesity is a global trend which is directly integrated with advertising that is aimed initially at children in this country and elsewhere, and it is the National Health Service and other state-based organisations that have to pick up the costs. The fast-food companies themselves should be obliged to cover more of those costs through taxation, as is happening in some parts of the United States at the moment; but surely it will also demand more active, energetic and farsighted business leadership from the larger corporations too.
In conclusion, social and environmental concerns should become a driving force also for big companies so that it is integral to what they do and is not just hived off to a tiny department of corporate responsibility that has been set up purely for public relations purposes. Companies that are in the vanguard—and we have quite a lot of evidence of this from farsighted corporate strategies—might find that such an outlook increases their own survival value.
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