Friday, 4 February 2011

There is something missing Mr Clegg

It is good the learn that the government has a strategy for growth. I think we'd all been happier if it had been up their in lights competeing for attention with the deficit reduction package. For too long it sounded as if reducing the deficit was the strategy. Now we learn that it has 4 elements:

  • weaning the UK off debt-financed growth; investing in infrastructure,
  • skills and education;
  • boosting competitiveness by reducing the regulatory and tax burden and opening up markets; and
  •  balancing growth across different regions and sectors

So what is missing? Well the Liberal bit is missing. Clegg must be one of the only Liberal Leaders in the last 90years who would have launched such a packed and failed to stress the importance of one of the major stakeholders in the economy-the employees. Any Liberal analysis of the failure of our economy would include the fixation on 'building share holder value' this has led to short term horizons. Liberal have along argued that employees should have to same right as shareholder and that successful enterprises result in a proper and equal partnership.  There is lots of evidence about the improved productivity and commitment of people who work in enterprises where there is employee ownership and where they have a democratic involvement in the business. Surely one key element of any package of reform is to recast the the dominant model of the firm so that it is not beholden to the short term interests of capital.

A Liberal government would be looking to improve our long term economic fortunes by advocating such reforms and by making government assistance-including tax advantages -conditional on such changes. We wish to see a major redistribution of asset ownership. There is no virtue in ushering in new era of growth without embedding such reforms from the beginning. When I fought my first general Election in 1979 we advocated that the government would compulsorily require every enterprise employing over 50 people to have workers represented at the highest level and to share profits. One of the causes of the crash in Britain was the was nature of ownership here, as Will Hutton put it:
 there has just been the unquestioning assumption that the best form of ownership is private; in Britain, that necessarily means our idiosyncratic variant of the public limited company. This represents the oddest and most regressive constitution for private ownership anywhere in western capitalism. British company law makes no requirement on shareholders and directors to have any obligation to be good stewards of their assets, their employees or their customers. Shareholders' rights to do what they want with their shares to maximise their immediate value is more stark than anywhere else and directors' responsibilities are only to serve the interests of these madly unconstrained shareholders.

Now we have a strategy for growth might we also hope to see more Liberal element in it-and not just tacked on at the end as an obvious after thought

1 comment:

  1. I heard a Tory minister mention this on Today prog it was an item about any impending strikes.


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