An ethical election?

What should the incoming government do to make companies more ethical? asks Simon Birch.

They may not be the most popular bunch of people in the country, but the uncomfortable truth is that politicians have a key role to play in setting the corporate ethical agenda. So with the country on election countdown, what five policies should the next government adopt to ensure that companies act more ethically?

Clearly the number one ethical issue facing companies right now is tax. A recent Ipsos MORI poll found that 45 per cent of consumers have reconsidered using products or services from companies that avoided paying tax in the UK. As one of the groups behind the launch of the Fair Tax Mark, Ethical Consumer (EC) has been at the very heart of the tax avoidance agenda. And whilst the Fair Tax Mark isn’t specifically calling for legislation on this issue, along with EC, it’s one of more than 20 social justice and church-based groups that are now supporting the campaign for a Tax Dodging Bill.

“Politicians have the opportunity to change the UK’s tax rules to make sure that companies pay their fair share of tax when they do business here,” says EC co-editor Tim Hunt.


Workers from Unicorn co-op in Manchester. The Government can help boost co-ops by cutting red tape. Photo: (C) Co-operatives UK


As well as supporting the Tax Dodging Bill, for many years EC has also called on governments to introduce the Tobin Tax, a financial transaction tax which would help to stabilise financial markets and reduce short-term speculation and the dangerous domination of the financial sector in the UK.

The compulsory annual social and environmental reporting by all companies has been another long-standing political goal for many campaign groups including Ethical Consumer. Last year this was very nearly achieved when the EU brought in new rules designed to do exactly this. However the UK Government succeeded in watering down these regulations with the result that the campaigning continues.

“The UK Government, represented by Business Secretary Vince Cable, should be ashamed of blocking corporate transparency rules for large private companies,” says Julian Kirby from Friends of the Earth.

Another way that the government could easily improve the ethical performance of companies is by using its massive procurement budget. Every year the government has around £45 billion to spend on everything from new schools to roads.

“There’s a huge opportunity here for government to use this purchasing power to deliver social and environmental benefits both in the UK and internationally,” says Marilyn Croser from CORE, which campaigns for greater corporate responsibility.

Tim Hunt agrees, adding that: “A Responsible Purchasing Act requiring all public sector institutions to take ethical issues into account when making procurement decisions should be a priority for two main reasons:”Firstly the public may ignore any government attempts to encourage more responsible purchasing by individuals and companies if it’s clear that the government itself isn’t already following its own advice.” “And secondly powerful government departments with massive budgets can persuade companies to address ethical issues very quickly.”

The government also has a strategic role in encouraging the growth of the co-operative economy, which is currently worth £37 billion, by cutting the red tape that’s currently stifling the launch of new co-ops.

“We want the government to create a level playing field for co-operative companies so that it’s as easy to start and run a co-op as any other company,” says Giles Simon from Co-operatives UK, the trade body representing the UK’s co-ops. “We also want to make it easier for people to invest in co-ops, which would provide a further boost to the community shares movement where local people pool their resources to save vital services or get new ventures off the ground.”

Finally animal welfare groups have a long list of demands of a new government, which would improve the lives of vast numbers of animals. Animal Aid for example is campaigning against the inhumane practices of UK slaughterhouses. “UK slaughterhouses need independently monitored CCTV cameras to deter welfare abuses, to encourage best practice and to help vets do their job,” says Kate Fowler from Animal Aid.