Will socially responsible capitalism ever return?

PUBLISHED: 09:30 08 January 2018

Capitalism as expounded by the Cadburys: Where is it now?           Picture: Dominic Lipinski/PA Wire

Capitalism as expounded by the Cadburys: Where is it now? Picture: Dominic Lipinski/PA Wire


Following an uplifting visit to Port Sunlight village on the Wirral, you’re inclined to wonder why you hadn’t visited sooner.

This column is brought to you in association with Almary Green. Photo: Almary GreenThis column is brought to you in association with Almary Green. Photo: Almary Green

Construction work on William Lever’s ‘model village’ began in 1899 and by the eve of World War I, more than 800 homes and other buildings had been built to house workers at the nearby factory where Sunlight soaps and detergents were manufactured.

Lever was not the first Victorian entrepreneur to build houses for his workforce, but those at Port Sunlight were a cut above. The village is beautifully landscaped too, while Lever made a point of providing schools, an open-air swimming pool and concert hall.

William Lever’s business was, of course, phenomenally successful. Today we know it as Unilever, a company that still boasts an excellent reputation for staff training.

Lever was not the first to implement a form of what we might call ‘socially responsible capitalism’; others, including Robert Owen, Joseph Rowntree and his son, Seebohm, (a contemporary of Lever), as well as the Cadbury brothers, recognised the benefit of looking after the people they employed.

Peter SharkeyPeter Sharkey

To a large number of business leaders, such an approach made commercial and social sense, but they were not radical communists. Speaking in 1914, Seebohm Rowntree said: “Employers… must be compelled to abandon the false economy of low wages, and the nation need not distrust movements which strengthen the economic position of the workers.”

In my experience, most business owners today are happy to give something back to society other than Corporation Tax and business rates. Rotary clubs and charities direct this corporate commitment to where it’s most needed. And recently, Liv Garfield, chief executive of Severn Trent, the FTSE100 water company, said it is “clear in today’s society that businesses, including the water sector, are under increasing scrutiny and greater pressure to explain their contribution to society beyond financial profit.”

She’s right. Water companies and energy networks are effective monopolies whose activities – and profits – are increasingly on politicians’ radar screens. Moreover, there’s no longer any display of public ire when a politician suggests taking energy networks back into public ownership. When rail fares increased by 3.4% at the beginning of January to make the UK the costliest place for rail travel in Europe, this understandably increased, while shadow chancellor John McDonnell is on record as saying that if elected, he will renationalise the railways and Royal Mail and replace the water companies with a regional network of publicly-owned organisations.

Such commitments are popular, but as ever, there are two sides to every argument. Since it was privatised 25 years ago, the water industry has invested £150 billion in the nation’s water supply, a sum unlikely to be matched by any publicly-owned body.

But several water companies have done themselves few PR favours, paying themselves high dividends and paltry amounts of Corporation Tax. Little wonder then that from 2020, the water regulator, Ofwat, will introduce price controls in a belated attempt to drive household bills lower.

The reaction to lower future returns was predictable: several large investors are cashing in their chips. In December, private equity firm 3i sold its stake in Anglian Water, while Yorkshire Water’s majority owners, private equity outfit Corsair Capital and Deutsche Asset Management, plan to dispose of their shareholding.

The concept of socially responsible capitalism, a la Lever, Rowntree, Owen and Cadbury, is laudable but could it happen today? We don’t wish to see the $2,000 suit brigade siphoning off huge sums to offshore paradises, but laws already exist to prevent this. So should companies be made to build schools, concert halls or swimming pools?

No. The tax system takes care of such matters – and should continue to do so – but firms are very good at targeted initiatives such as sponsoring college libraries or donating a minibus to care homes. Perhaps what they need to do more frequently is tell the public what they’re doing because these initiatives fall squarely into the category marked ‘socially responsible capitalism’.

Read more Peter Sharkey.


£141 billion

According to the London stock exchange, the value of shares in Britain’s largest 100 companies surged by £141 billion in 2017. Global share prices also enjoyed a good year, rising by an almost incomprehensible $9 trillion. We now await the widely-predicted crash – sorry, ‘correction’.


Marks out of 10 awarded to the BBC’s new crime drama, McMafia, starring James Norton as an easily-corrupted banker. The slow-paced series has a way to go before it comes close to the real deal – The Sopranos. Episodes regularly scored 10/10.


The FTSE100 index rose by almost eight percent last year. Add in the value of dividends and it climbs to 12.3 percent. It’s easy to see why most brokers advise clients to re-invest their dividends.

100 million

Estimated number of streams the EP, Don’t Kill My Vibe, by 21-year-old Norwegian starlet, Sigrid, has now notched up – without any promotion. The music industry’s new poster girl also boasts more than 2 million Spotify listeners every month.

$7.1 billion

According to Matthew Collin, in his new book, Rave On: Global Adventures in Electronic Dance Music, the genre, which began life in Detroit, New York and Chicago, is now worth $7.1 billion a year, suggesting it’s no longer a subversive activity but decidedly mainstream.

23.4 million

There were 23.4m visits to hospital A&E departments during the past 12 months. Around 30 percent (7 million) were alcohol-related. At weekends, that figure rises to a staggering 70 percent.

Peter Sharkey read economics at Bristol University, has worked as an accountant on three continents and been a company director and investor for more than 30 years.

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