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Returning the favour: a new social contract for business

In this report, the SMF's Director, James Kirkup says businesses should agree a “new social contract” on improved tax compliance, treatment of workers and support for communities in exchange for emergency support during the coronavirus crisis.

Executive summary

In an effort to support economic capacity and employment in the face of the coronavirus crisis, the UK government has committed unprecedented amounts of public resource to supporting British private sector organisations. This necessary act should, in time, be the start of a process that leads to a new social contract between British business, government and society.

That contract should set out new shared norms for the conduct of business and its obligations to others. It should codify — and make visible to all — the standards which business should meet in order to justify the support it receives from the public in order to operate, not just at this exceptional time but in general too. This short paper provides an overview of the case for a new social contract and an outline of the process for drawing up that contract and upholding its standards.

This is a pro-business plan, because it is in the vital interests of business to renew and retain its social licence to operate in the political economy of Britain in the age of the coronavirus. Unless they demonstrably reciprocate the extraordinary support they have received during the crisis, British businesses will be exposed to the significant risk of public — and thus, in turn political — backlash that will curtail their scope to operate and, in due course, harm the UK economy.

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