The 2016 Conference Paper The Opportunity to succeed, the Power to Change is in my eyes a great starting point for the types of policies and issues that we will set out as a party for the 2020 (or earlier!) General Election. Allowing empowerment and choice for individuals whether in the form of giving cities and regions more autonomy, making education more bespoke or championing the sharing economy, will truly make us the party offering opportunity for all.
Low productivity levels are identified as a barrier that needs to be overcome within the paper. It’s true that many experts have been debating the ‘productivity puzzle’ for quite some time. Government figures earlier this year showed that the productivity gap was the widest between the UK and other western economies than since the early 90’s. Of course looking at options such as dedicated industrial strategies and tax breaks are important, but what about concerted support of employee ownership? It’s an idea that both Vince Cable and Nick Clegg have recently championed and indeed the 2013 Budget announced a £50 million annual spend to support employee ownership models. It's surely time to make a firmer commitment to this that sits at the heart of our 2020 vision.
With Theresa May proposing putting workers on Boards as a way to curb excessive pay, we need to show that far-reaching reform can be achieved through encouraging more collective forms economic ownership.
Lack of engagement with the economy and business has of course become an increasing trend since the 2008 crash. It’s not surprising that many people feel at the mercy of corporate behemoths be that the ones they work for or the ones they buy from. The recent sorry saga of BHS and the employees being the victims of an acquisition occurring with little or no scrutiny is a case in point. Employee ownership could turn this on its head; making firms far more accountable to citizens yet also boosting dynamism and growth.
A Centre Forum report into this concluded that employee owned firms have been shown to grow faster, retain more workers, become more productive, pay better wages for equal and survive better during periods of recession. Not only this, but it increases employees incentive to work hard, reduces absenteeism and fosters greater innovation.
Previous Chairman of employee owned engineering firm Arup, Philip Dilley, said that the structure has stopped pressure to deliver on an annual basis and has instead they can ‘look long term and invest in areas that sometimes take a long time to return financial gains.’
So encouraging greater employee ownership would not only have the power to potentially boost productivity and engagement levels, but would also promote a much needed long-termism when it comes to business thinking.
Now as we discuss new and progressive visions and strive to have a true ‘alternative’ vision in the wake of the 2015 General Election and the EU referendum result, it is surely the time to develop some policies around this.
Ultimately, tax breaks alone will not lead to more companies adopting the model. There needs to be far more concerted efforts to encourage it being used more widespread. Good policy starting points would be supporting general awareness raising about the concept through ensuring that the business higher education curriculum covers what it is and how it works. Also ensuring that start-up companies have access to the right advice on how to become employee owned from both lenders and the Government.