Corporate power and social policy in a global economy: British welfare under the influence

233 Pages·2004·1.127 MB·English

by  Farnsworth, Kevin

CORPORATE POWER AND
SOCIAL POLICY IN A
GLOBAL ECONOMY
British welfare under the influence
Kevin Farnsworth
CORPORATE POWER AND
SOCIAL POLICY IN A GLOBAL
ECONOMY
British welfare under the influence
Kevin Farnsworth
The•POLICY
P
P
P R E S S
First published in Great Britain in January 2004 by
The Policy Press
University of Bristol
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© Kevin Farnsworth 2004
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
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A catalog record for this book has been requested
ISBN 978 186134 474 8
Kevin Farnsworth is Senior Lecturer in Social Policy at London South Bank
University.
The right of Kevin Farnsworth to be identified as author of this work has been
asserted by him in accordance with the 1988 Copyright, Designs and Patents Act.
All rights reserved: no part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, or otherwise without the prior permission of The Policy Press.
The statements and opinions contained within this publication are solely those of the
author and not of The University of Bristol or The Policy Press. The University of
Bristol and The Policy Press disclaim responsibility for any injury to persons or property
resulting from any material published in this publication.
The Policy Press works to counter discrimination on grounds of gender, race, disability,
age and sexuality.
Cover design by Qube Design Associates, Bristol
Front cover: original illustration supplied by kind permission of Steve Bell,
and adapted
Printed and bound in Great Britain by Bell & Bain Ltd, Glasgow
Contents
List of tables and figures v
Acknowledgements vi
List of abbreviations vii
one Introduction: globalisation, corporate power and 1
social policies
Business influence on social policy 1
Defining the variables and scope of this book 2
Theoretical framework 4
Investigating business power and influence on social policy 6
Structural power and social policy 7
Corporate agency and social policy: business opinion, business action 8
and business influence
two Business and social policy 11
Influence through action 11
Influence through structure 13
The variability of corporate power 16
Integrating agency and structure and arriving at a useful model 21
of business influence
Models of welfare state development 23
Business and social policy 27
Conclusion 32
three Globalisation, corporate structural power and social policy 33
Economic globalisation and the welfare state 34
Assessing the impact of globalisation on corporate structural power 37
Globalisation, changing corporate structural power and its 52
implications for British social policy
four Globalisation, Europeanisation, corporate agency power 59
and social policy
Globalisation, Europeanisation and corporate agency power 59
Key international and European business organisations 63
Globalisation, business agency and social policies 64
Conclusion: globalisation, corporate agency power and social policy 80
five The national level: business and social policy in the UK 87
Introduction 87
Corporate power and national politics from 1979 87
Central government, business and social policy since 1979 89
Conclusion: business and British social policy 118
iii
Corporate power and social policy in a global economy
six Business and local welfare services 121
Introduction 121
Local government, business and social policy 121
The city of Bristol 124
Business and local social provision to 1997 127
Review of the service boards 132
Developments since 1997 142
Conclusion: business and local social policy 145
seven The social policies of corporations: occupational welfare 149
and corporate social responsibility
Introduction 149
Occupational welfare 149
Corporate social responsibility (CSR) 163
Conclusion 171
eight Conclusion: corporate power and social policy in global 175
context
The implications for contemporary and future social policy 184
References 189
Index 211
iv
List of tables and figures
Tables
2.1 Ideal welfare types 31
3.1 Composition of gross fixed capital formation (% of total gross 39
fixed capital formation)
3.2 Inward and outward FDI stocks as a percentage of home country 40
GDP
3.3 Share of foreign affiliates in manufacturing production (%) 40
3.4 Corporate taxation as a percentage of total taxation (1965-99) 43
(selected countries)
3.5 Unemployment rates (1963-2000) 45
3.6 Trade union density (trade union membership as a percentage of 46
those in work)
3.7 The decommodification potential of unemployment insurance 46
(1980 and 1992) and the strictness of employment protection
regulation (1989)
3.8 Rank of labour market flexibility in selected countries 47
4.1 International business interest associations 65
4.2 A summary of international business opinion on social policy 82-3
6.1 Business board membership of various services 133
6.2 Most active members of the social service network 135-9
7.1 Employer contributions to overall social protection receipts 153
(1980-2000) and breakdown of wage costs (2000)
7.2 Occupational welfare provision (2000) as a percentage of total 155
wage costs by sector and GDP
7.3 Changes in occupational provision (1975-2002) 157
7.4 Provision by occupational status 158
7.5 Provision by sector 160
7.6 CSR activities 166-7
8.1 Business influence on selected social policies 176
Figures
1.1 A simple model of business influence on social policy 6
3.1 Headline corporate taxation rates 41
3.2 Corporate taxation as a percentage of total taxation (1965-97) 42
6.1 Bristol’s social policy network 141
7.1 Social protection receipts as a percentage of GDP 154
v
Corporate power and social policy in a global economy
Acknowledgements
In writing the book, I owe the biggest debt to two people. First, to Ian Gough
for his inspiration and guidance over the past few years. I am especially indebted
to him for his help in formulating and moulding some of the key arguments of
the book. Second, to Lata Narayanaswamy, who offered insightful comments
on earlier drafts and gave me more encouragement and patience than I deserved
during the most ‘difficult’ stages, and it is to her that I dedicate the book.
Thanks also go to Frank Longstreth, Gary Fooks, Peter Taylor-Gooby and
Dexter Whitfield who offered insightful comments on earlier drafts of the
book.
Lastly, I would like to thank Helen Bolton, Karen Bowler, Laura Greaves,
Rowena Mayhew and Dawn Rushen at The Policy Press for their assistance,
hard work and patience.
vi
List of abbreviations
BAE British Aerospace
BCCI Bristol Chambers of Commerce and Initiative
BEC British Employers Confederation
BIA business interest association
BIAC Business and Industry Advisory Committee
BITC Business in the Community
BP British Petroleum
CBI Confederation of British Industry
CCT compulsory competitive tendering
CSR corporate social responsibility
CTC city technology college
DfEE Department for Education and Employment
EAZ Education Action Zone
EBP Education–Business Partnership
EC European Commission
EEF Engineering Employers Federation
EETC Employment, Education and Training Committee
ERA Education Reform Act
ERT European Round Table
FDI Foreign Direct Investment
FE further education
EU European Union
FEB Federation of Enterprises in Belgium
GATS General Agreement on Trade and Services
GNVQ General National Vocational Qualification
GP general practitioner
GPF Greater Bristol Foundation
HA housing association
HAZ Health Action Zone
HEFCE Higher Education Funding Council for England
HEROBC Higher Education Reach Out to Business and the Community
HHG Housing the Homeless Group
ICC International Chambers of Commerce
IGO international governmental organisation
IMF International Monetary Fund
IOD Institute of Directors
LEA local education authority
LSC Learning and Skills Council
MAI Multilateral Agreement on Investment
MNC multinational corporation
NCEO National Confederation of Employers’ Organisations
vii
Corporate power and social policy in a global economy
NCVQ National Council for Vocational Qualifications
NEBPN National Education and Business Partnership Network
NGO non-governmental organisation
NI National Insurance
NVQ National Vocational Qualification
OECD Organisation for Economic Co-operation and Development
PFI Private Finance Initiative
PMI private medical insurance
PSDS Private Sector Development Strategy
QCA Qualifications and Curriculum Authority
SCAA School Curriculum and Assessment Authority
SEA Single European Act
SEF Shipbuilders Employers Federation
SERPS state earnings related pension scheme
TABD Transatlantic Business Dialogue
TBI The Bristol Initiative
TEC Training and Enterprise Council
TUC Trades Union Congress
TVEI Technical and Vocational Education Initiative
UBI Understanding British Industry
UBR Uniform Business Rate
UEAPME European Association of Craft, Small and Medium-Sized Enterprises
UN United Nations
UNCTAD United Nations Conference on Trade and Development
UNICE Union of Industrial Employers’ Confederations of Europe
UWE University of the West of England
WEF World Economic Forum
WESTEC Western Training and Enterprise Council
WTO World Trade Organization
viii
Introduction
ONE
Introduction: globalisation, corporate
power and social policies
Interest in the power and influence of business is probably higher today than at
any time in the past. Academics, journalists and political activists warn of the
grave dangers posed to nations and their citizens by large corporations;
governments regularly remind their citizens of the policy pressures they face
from business under conditions of global competitiveness; and transnational
corporations use, with increasing regularity, the threat of taking their investments
elsewhere should national policies contravene their interests. The gap between
the public and private sectors, meanwhile, has become so narrow that few
public policy decisions and public infrastructure investments are undertaken
without the inputs of business. Despite the challenges these developments
present for social policy, however, their implications for social policy have been
under-researched. While questions regarding the opinions and influences of
business have been raised with increasing frequency, few studies have investigated
these issues in any detail, let alone attempted to provide convincing answers to
the questions they raise. This book represents one of the first real attempts to
investigate business views and influence on social policy outcomes.
Business influence on social policy
Explanations documenting the development of social policies have been wide
ranging in every way bar one: the interests and institutions of business have
generally been overlooked. Explanations have included:
• the moral conscience of the middle classes and of government (Fraser, 1984,
pp 134-7);
(cid:127) the breakdown of former welfare institutions (Flora and Alber, 1981);
(cid:127) the reliance of competitive markets on a healthy, well-educated workforce
(Peden, 1985, pp 11-13);
(cid:127) the extension of citizenship rights and the empowerment of individuals
(Marshall, 1950);
(cid:127) the dynamic of state bureaucracies (Niskanen, 1971);
(cid:127) and the political mobilisation – as well as the fear of the political mobilisation
– of labour (Navarro, 1978, 1989; Korpi, 1983; Castles, 1986, 1989).
Those theorists who have discussed the role of business in welfare development
have tended to draw on taken-for-granted assumptions about the position of
1