Thursday, 16 December 2010

Two great Lib Dem ministerial announcements

Nick Clegg and Chris Huhne have made two important announcements on behalf of the Coalition Government. Seven months in, the novelty of having Liberal Democrat Cabinet Ministers has not worn off for me. For years, we've banged on in opposition about the things that we would like to do in government, now we are finally doing some of them - at last!

Around about the time I first joined the Liberal Party aged fifteen in 1986, our leader, David Steel, told the annual Assembly: "I am not interested in power without principles. But equally, I am only faintly attracted to principles without power. Without power all our resolutions, all our idealism, and all our passion will remain mere intention, mere hope, mere dream. We have so much to do, so much to change, such great tasks to achieve. But we will do nothing, change nothing, achieve nothing unless we can first gain power and then use it wisely."

So what are those two announcements? Firstly, as the grandson of asylum seekers, I am delighted by Deputy Prime Minister Nick Clegg's announcement that this country is ending the detention of children of failed asylum seekers, which is a Lib Dem manifesto commitment. As Martin Narey, Chief Executive of Barnardo's, says: "Locking away children who haven't done anything wrong at all - and some of these are very, very young children indeed - putting them in essentially a prison environment with barbed wire, bars and locks is not something we should do."

Secondly, Energy Secretary Chris Huhne is delivering on the Lib Dem commitment to boost investment in low-carbon forms of electricity generation - crucial to the fight against climate change. I agree with Friends of the Earth that Mr Huhne's announcement is a once-in-a-generation chance to set energy policy for the next twenty years, as "it's crucial the government makes the right decisions to ensure renewable power thrives instead of locking us into a dangerous high-carbon world."

And Lib Dem Cabinet Ministers are only able to deliver these things because our party is in a Coalition Government with the Conservatives, led by Prime Minister David Cameron (whose speech this week to Conservative Friends of Israel I naturally welcome). So, yes, there are things on which we (and the Conservatives) have had to compromise - but look what we are achieving as Liberal Democrats in government, exemplified by these two announcements by Nick Clegg and Chris Huhne.

As a liberal, I was also fascinated to read about the success of Sports Direct's staff bonus scheme. This is what we have long been saying: give employees a sense of ownership of the businesses that they work for, and you'll be amazed what can be achieved as a result. That's industrial democracy in action. David Steel put it so well in 1985 that there's no better way to argue this point than he did then:
The key to industrial recovery in Britain does not lie in the vaults of City banks but in the capable hands of the managers and employees of our companies. There is a wealth of energy, enthusiasm and inventiveness waiting to be unlocked.
How do we turn the key? By transforming each employee from a wage-slave into a partner in his or her enterprise. As John Stuart Mill put it, ‘by accustoming them to the comprehension of joint interests, the management of joint concerns - uniting them instead of isolating them from one another.’
Partnership is an idea whose time has came, and only our partnership of the Alliance can introduce it because it threatens the whole basis of Conservative and Socialist ideology. They want a struggle between the two sides of industry. We want a successful joint concern, a share economy.
The Conservative government remains firmly opposed to legislation for employee involvement. They thought they could get away with a vague requirement for companies to report on their employee involvement policies each year.
However, a recent study of 100 company reports by the Institute of Directors has demonstrated convincingly that even this limited approach is not working. The survey found that only 9% of the companies provided any information.

I cannot help wondering why the Government is dragging its heels.

Employee involvement not only improves business efficiency, but also improves employee responsibility and job satisfaction. But we want to go further. I’ve spent some time in the last year visiting companies who’ve been a bit bolder in this field.

At Jaguar in Coventry I was impressed by the remarkable recovery the company has achieved in the last few years. The introduction of an incentive scheme, an employee share ownership scheme and improved communication, were central to their recovery plan.

At the National Freight Consortium, an organisation which spans the country, more than 82% of all shares are owned by the workforce - and two thirds of the employees now have some stake in their company. Trading profit has more than doubled since the buy-out in 1981.

The Baxi Heating Company near Preston - one of whose works council meetings I attended last month - is even more remarkable. They have long believed in employee participation. They operate a cash profit sharing scheme and in 1983 the old family company was converted into a partnership, making Baxi the largest manufacturing group in Britain to be wholly owned by its employees. The entire workforce from top management to the shop floor have become owners. Supervision is kept to a minimum. Jobs are rotated on a regular basis. Everyone eats in the same canteen.

Independent researchers have been consistently surprised by the strength of the commitment and morale within the company. Labour-management relations are good, job satisfaction is high and the company is successful financially.

Firms like these should be an example to us all. Employees should everywhere be treated as full partners, their contribution valued and respected and this way the trench between labour and management can be finally bridged. The CBI this morning has warned that pay rises in the private sector should be held to about 4% and they are probably right, but what about profits? They say employees are ‘showing an increased understanding of the need for profits.’ Wouldn’t the employees show even more understanding, if on top of the 4%, a share of those profits was going into their pockets?

For the nation’s economy profit sharing could reduce our susceptibility to wage-push inflation. Our Alliance government will insist on it as part of our comprehensive incomes strategy and so help to create jobs.

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