Andy Carter is the MP for Warrington South.
Warrington, as we know it today, was a creation of the industrial revolution. The town became the centre of many industries, from brewing to wire making and, of course, soap making.
Industry has driven forwards and contributed to the success of the North West. Businesses embedded in the local community have created and sustained good jobs and economic growth over generations.
As we enter a new Green Industrial Revolution, we will see the UK invest on a vast scale in clean technologies like wind, carbon capture and hydrogen to meet our Net Zero ambitions. This provides an opportunity to reflect upon how industry can continue to contribute to constituencies like mine.
Many of our heartland towns like Warrington were created around industry. Forward-thinking industrialists who founded some of Britain’s biggest names, such as Cadbury and the Lever Brothers, forged strong links between their business and the local community.
In my own constituency, Joseph Crosfield opened a small works to produce soap in the 1750s. The smell of soap welcomed visitors to Warrington for decades. Crosfield didn’t only lend Warrington a pleasant scent. He invested heavily in the community, establishing the Warrington Educational Society “for the purpose of extending the education of the working classes in Warrington.” Until the early 20th century, Crosfields remained deeply embedded in the community and the firm was regarded as a good employer.
Business leaders like Crosfield and William Lever believed that it was possible and desirable to marry enterprise and endeavour, to align profit with social purpose. But for many decades, the idea of reciprocal bonds of obligation linking businesses to their employees and the broader community has become the exception rather than the rule. As Britain’s traditional industries began to decline, the concept of ‘shareholder value maximisation’ took over.
Soon after I became an MP, Warrington lost its final soap plant, as Unilever moved it’s operation overseas and the town’s connection to great industrialists such as William Lever came to an end with many jobs lost. As we have seen this summer during a flurry of corporate sell-offs, company directors have chosen to make those kinds of decisions even while recognising their consequences.
Naturally, the market will determine where jobs ought to be. Nonetheless, this model of business has turned many of the free market’s natural supporters against it and fuelled hostility amongst a new generation. This requires a response that returns business to some of its connections in communities and reorders its priorities to serve a wider set of stakeholders.
The pursuit of social purpose and the embedding of community values does not need to come at the expense of commerce. It is right and proper that businesses make a profit and return money to shareholders. But more and more, working people are voicing their concern that this must not be at the expense of them, their children, their communities, and the environment.
This balance is at the very centre of what it means to be a Conservative and at the heart of Britain’s ‘build back better’ agenda. The pandemic demonstrated the capacity of our business to rise to challenges and to deliver for communities. Small, family owned businesses like 3 Pugs Gin distillery in my own constituency adapted to support the fight against Covid-19, producing thousands of bottles of hand sanitiser and raising money for the NHS through their sales.
As we move further from the pandemic, we must address the challenge of climate change and the role that business can play in making our economy more sustainable. The Government has shown the way with its vision of a Green Industrial Revolution that will harness our offshore wind, power our nation, cut carbon emissions and create 60,000 new jobs. It will take purpose-driven firms to deliver that vision.
I want to see constituencies like my own at the very heart of that revolution with businesses creating good jobs, helping to fix pressing problems and adding value to society. Companies like Novelis in Warrington are already leading the way. The recycler is the UK’s largest buyer of used aluminum cans. The company has a commitment to sustainability at the core of its business operations which save energy and natural resources and reduce pressure on landfill sites.
We can do even more. I want to see Warrington push forward projects like Hynet to aid our transition to Net Zero. Hynet will provide a bedrock to level up across the region, creating around 6,000 permanent highly skilled green jobs and delivering clean hydrogen energy into our local network to heat our homes. If projects like Hynet are to be successful, they’ll need to be led by directors who are able to take a holistic view of their impact.
If the Green Industrial Revolution is to leave a legacy like that bequeathed to us by our industrial forefathers, our directors must be empowered to take bold decisions. The Better Business Act would enable that by giving directors new powers to take decisions in the interests not just of shareholders but also workers and the wider community.
Aligned interests rather than narrow shareholder interest would become the new principle of fiduciary duty within Section 172 of the Companies Act. The interests of shareholders would be advanced alongside those of wider society and the environment. And those wider considerations would be detailed in an annual impact report that showed how business was aligning profit with social and environmental purpose.
The UK pioneered corporate governance and has a long and proud tradition of leading the way on workers’ rights and high standards. We can once again be at the forefront if we choose to adopt the principles of the Better Business Act.
Andy’s article is part of an essay collection of Conservative MPs writing in support of the Better Business Act Campaign. You can find the full collection here.