Rodney Schwartz: Which parties do best on impact investment?

The government has been supportive, the Lib Dems seem to have no connection with it and there are encouraging noises from Labour and the Greens, writes our columnist

Rodney Schwartz
Rodney Schwartz

With only weeks to go before the general election, it seems an appropriate time to look at the main political parties' policies on social impact investment.

The coalition government has been exceptionally supportive and its actions have been the envy of proponents all over the world. Rarely do I meet someone from another country who does not gush with envy. I credit the Conservative Party, which has dominated thinking in this area and whose big society programme has informed its policies and strategy.

What has emerged is a joined-up torrent of policy that has moved the market forward dramatically. Most significant has been the establishment of Big Society Capital and a host of programmes to grow the intermediary sector and help to develop enterprises whose focus is social impact, including the Investment and Contract Readiness Fund and the Mutuals Support Programme.

Social investment tax relief and the G8 Social Impact Investment Task Force have also received attention, but other initiatives, such as the publication of the Unit Cost Database, are equally important. The social value act, which requires public bodies to take social value into account when awarding contracts, has been another notable step forward, although it was a private member's bill, rather than Conservative policy. But the Tories have accelerated the process begun under Labour of encouraging spin-outs from the NHS, creating businesses that focus on creating social change.

The Liberal Democrats, the Tories' coalition partner, have played no apparent role in any of these initiatives and get little credit from me. I can't find any significant commitment to impact investment – or even the term "social enterprise" – in recent policy documents or the party's 2010 manifesto. My own enquiries of Lib Dem officials were not responded to, which is embarrassing given that I am a card-carrying member of the party.

On the other hand, Labour has played a central role in the creation of impact investment. As Chancellor of the Exchequer, Gordon Brown initiated the Social Investment Task Force. Labour conceived what became BSC, developed community interest companies and founded UnLtd, the key funder of early-stage organisations. Chi Onwurah, the shadow minister for social enterprise, seems engaged, which hopefully is a sign of Labour's support for the sector. And let's not forget that Ed Miliband, the Labour leader, was a strong proponent of the sector when he was a minister.

I have also spoken to Caroline Lucas, the Green Party's only MP, and can report that there could not be a greater champion of the concept. Policy documents on the Green Party website contain many references to the values of the sector. The party's values are fundamentally in sync and I believe it would act as a significant voice in support of impact-focused businesses.

In summary, the sector has little to fear from either a Tory or Labour-led government in May. And if the Greens were part of a coalition, this would add to the sector's voice. There is little evidence of Lib Dem enthusiasm, but also none that they would be opposed.

Rodney Schwartz is chief executive of ClearlySo, which helps social entrepreneurs raise capital

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