Wednesday, 23 March 2011

A little more Liberal input into the budget please..........

Looking back across the decades since WW1 one dominant feature of Liberal Party Budget proposals seems to have disappeared today. Throughout those long years from Asquith to Ashdown one common feature of Liberal plans was always to enhance Employee Ownership. Manifestos and Inquiries throughout the whole period contain studies of co-ownership firms like Scott Bader. Even the great Liberal manifesto of 1929  contains a whole chapter on 'The Diffusion of Ownership'. The one real policy triumph of the Lib Lab pact was Richard Wainwright's success of getting employee profit sharing in legislation.

This idea has never been more relevant. As Will Hutton observed:

........................ with the rise of the neoconservative right, 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.

It is scarcely necessary to remark that the concern of many is that some Liberal Democrats have been co-opted in to the economic approach of the neo-conservatives that was in significant part the cause of the crash. The single objective of increasing shareholder value led to some 'barking' actions. Short term profit was pursued instead on long term sustainability. In every corner of public policy we call for greater transparency and democracy. We are vigorously championing a minor (if desirable) reform of the voting system but Industrial Democracy which could directly impact on millions of our fellow citizens is off  the agenda. We have talk of bits of mutualism at the margins but not the decisive action that is needed to be taken within the mainstream economy is not even whispered about.  Part of rebalancing the economy must be to reform the 'idiosyncratic variant of the public limited company'. For generations Liberals advocated that companies with over 50 employees should compulsorily be required to include employees as stakeholders with rights like shareholders. Although Clegg raged against the Kraft take over of Cadbury's  he failed to propose the one reform that would have constrained the rampant neo liberals in their tracks-namely entrenching the rights of employees.

As the Manifesto of the Employee Ownership Association asserts:

As an instrument of government policy, employee ownership is economically 
effective, politically attractive and socially just. 
Without any net cost to the public purse, employee ownership could make a 
major contribution to re-balancing the economy, distributing wealth more widely, 
re-invigorating civic society, re-building trust and re-connecting people with

more satisfying, more productive and happier work

I trust the time will soon come when Liberal Democrats take up this message again. Re-mutualising some of the High St banks would be a start (better that the mad cap idea of returning ownership to the business model of share ownership that was part of the cause of the crisis in the first place) Leglisatioon on the line of the old Liberal Party proposal for firms with over 50 employees would be another and the Employee Ownership Association has been pushing a tax reform measure that would also help that would block ' tax reliefs subsidising regressive ownership outcomes, such as unlimited tax relief on corporate debt in private equity buyouts, this should be changed to encourage wider ownership and become conditional on the business having an all-employee trust of a minimum size'.

If you don't want the media and the public to concentrate on deficit reduction then show them a vision of something better where wealth and power is shared more equally.

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