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Asheem Singh: A big private sector helping engender economic growth is vital for the Big Society to flourish

Picture 3 Asheem Singh is a former adviser to the Conservative Party cabinet office team and senior researcher at the Centre for Social Justice who is now Associate Director of the ResPublica think-tank.

When scores of student activists converged on Parliament Square to protest against tuition fees, organised through social networks and through parent groups like UK Uncut and the NUS, we were given a glimpse of what the Big Society's vision of autonomous, self-organising communities might look like. It was not a particularly edifying sight, what with the criminal damage and the violence, yet for David Cameron the Big Society remains his mission in politics.

Strange then that – some smart, slow-burn work from Cabinet Office ministers Francis Maude and Nick Hurd on growing the social investment market aside – evangelists of this agenda have been all but silent on its relevance to the most important issue of our time: economic growth.

The irony of the student opposition to all things Tory, and therefore the Big Society, is that many – but crucially not all – Big Society evangelists share their view of economic growth. They form a group I call the Moralisers. The Moralisers believe that there is something profoundly wrong with a society that demands nothing but growth, and favour wholesale abandonment of the pro-growth agenda, in lieu of a wellbeing or happiness-based mindset.

A debate on the Big Society was recently co-hosted by centre-right think-tank ResPublica, with centre-left think-tank Progress. The speeches were fine, but more interesting were the questions from the floor. Ali Parsa of Circle, the country's biggest health mutual, won factoid of the evening award when he claimed that 94% of the UK was owned by either the state or big financial institutions. If true, it would be the archetypal expression of the pincer movement – the unfortunate squeezing of small family businesses and social enterprises by the twin leviathans of state and market.

The corollary is not only that local services ought to be removed from state control, but that parts of the economy should be removed from the grip of the big institutions and multinationals. Whether it is big firms being barred from large public sector contracts, about multinational takeovers, high street shops or football club bids, this would appear to be the politicisation of the economic space in action.

The problem lies not in the eloquence of the argument but in its practice. The main issue with the position of the Moralisers is the scale equation. Scale tends to create growth, even at the very lowest levels of development. More can be delivered to more people when organised through a large-scale, for-profit framework.

Greed can be corrosive, but growth, for Britain in the 21st century, is an unalloyed good. A recent McKinsey report states that between now and 2030, a difference of 1% in growth means about £400 billion to the economy annually – more than half of all current government spending. As such, George Osborne – and indeed any future Chancellor – is absolutely right to pursue an aggressive private sector-driven growth strategy.

We have already accepted reductions in services, standards of living, rising prices and worse. With an ageing population, a rickety infrastructure, and a painful shift away from hydrocarbons in the offing, if we are to not add permanent recession, perpetual cuts, and a constant state of protesting to that list, then the Moralisers will have to rethink.

There are many good ways to create evidence-based industrial policy. Stian Westlake of the National Endowment for Science, Technology and the Arts only last year reported that more than half of our growth came from just 6% of our companies, a large chunk of them in financial industries. Privileging other companies for government incentives over these high-growthers for reasons that amount to little more than court patronage would be reckless.

Encouraging more widespread growth could yield significant gains. For example, encouraging growth in lagging UK regions could yield as much as £135 billion over the next 20 years. Policy should seek a way to make connections between large and small, plentiful and dispossessed, to help create the scale that such entrepreneurship needs to thrive. A big private sector is the Big Society's friend.

So for now, the policy response involves agitating for the private sector to fill vital gaps in start-up and social venture capital, while also creating opportunities to invest in and grow larger scale, for-profit frameworks. It involves devising and proselytising on behalf of new tradeable social finance instruments and structured deals: the Big Society Bank will attempt to pilot some of these. It involves encouraging private sector mentoring, development and in-kind support as well as deal brokering.

The opportunity is not just to connect the loudest voices with the voiceless, but also to connect the biggest wallets with those who are making their way, and so pass the benefits of scale right down the food chain. As an aphorism it may be even less palatable than Big Society for the anti-Tory activists, but this form of Trickle-Down 2.0 can couple the Big Society agenda with the elixir of growth. And, frankly, that would be more useful than any number of platitudes, or protests.


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