The former Home Office secretary told an audience last night at the ICAEW Audit Quality Forum that business had for far too long ignored the resentment that was brewing among sections of society – and in particular the young – who felt that big business had disadvantaged them.
“In the end, all of this is about power, about how people see the capacity to take,” he said. “The individual has little power compared to the employer.”
As a result, he warned, it was not the very poor who would cause the most trouble because they had already “switched off”: rather it was those just above them, who voted for Brexit and Donald Trump, who would “lash out”.
“Perversely, international trade reduced inequality globally but increased inequality locally,” he said.
Reduced inequalities is one of the 17 sustainable development goals launched in September last year and adopted by the 193 countries of the UN general assembly. Together they committed to ensuring that all 17 goals and their 169 associated targets would be achieved by 2030.
Lord Blunkett suggested that in the UK business should not write off young people immediately but concentrate on giving them second and third chances to succeed.
Over the last few years, he said, life had got tougher for them as government changes had been biased towards the baby boomers, to ensure that they were compensated for the reduction in interest on savings.
“The under 30s lost 7% of income in real terms while the over 60s gained 11%. No wonder there is a degree of disengagement.”
"The young really needed a leg up from business", he added, for example, why not take a leaf out of Bangladesh’s book and offer micro finance in the UK’s most deprived areas? Why couldn’t business partner with intermediate institutions in the same way as they do with schools?
Business should be more involved in supporting young people with lifelong learning accounts, and helping higher education to transfer knowledge to communities, he said.
And, as a starting point, he called on companies to engage their moral and social awareness –through understanding and using the talents of each and every employee, paying taxes when due, becoming more transparent and honest and taking a longer term view about the well-being of the business.
Lord Blunkett added that he did not believe that the situation was beyond repair. The shock of the Brexit and Trump votes had been a wake-up call which had led to more debate and awareness, he felt, and business was realising that it needed to play a part that went beyond just making money towards helping to heal the social divide.
In the panel session that followed, Kate Pickett, professor of epidemiology in the department of health at York University and the university’s champion for research on justice and equality, pointed out that business can have aims that are not all about maximising profits for shareholders.
“I would challenge fundamentally that very old-fashioned view of what business is for,” she said, pointing out that there were other forms of business models – including mutual, social enterprises, partnerships – apart from corporations.