“Fix Globalization” Conference
Washington D.C. October 9th-11th
2002
CAPITAL STATEGIES FOR LABOUR
Labour`s use of Employee
Ownership
David Wheatcroft
The question “How does Labour use
Employee Ownership in the UK?” can be answered up in two words “IT DOESN’T”.
If you think that some 2 million
workers in the UK hold shares in the company they work in then it could be
looked on as a success.
However this shareholding is only
a minute portion of the total and does not touch, never mind challenge Globalization
or the concentration of wealth.
I have to say I place a great deal
of blame of this on the British Trade Union Movement for this situation in the
UK.
At
this point let me make it
clear I am not opposing Trade Unions.
Indeed I have been a member from my first job at the age of 15 when my
stepfather threatened to give me a “thick ear” if I couldn’t show him my Union
Card by the end of the first week.
I was politically awakened at the
age of 21 and have been an active member ever since serving as a Shop Steward,
Branch Secretary, Area Representative and Worker Director.
My presentation is not so much a
knock at Trade Unions more of an “awakening call” to what is happening around
us. There is a need to stop missing
opportunities and to start to represent their members in the field of Employee
Shareholding and Ownership.
Until Trade Unions start to
embrace Employee Shareholding the opportunities to use employee ownership to
their advantage will always go begging.
I believe there are 2 main reasons
why the UK Trade Unions should get more involved in Employee Ownership.
2
Firstly it is reported that some
30,000 businesses are lost every year in the European Union due to the owners
closing them or selling them on.
My second reason
is based on a study by Lester T Thurow an economic professor from Massachusetts
USA which concluded that of all the extra wealth that was created in the USA in
the 1980s, 64% has gone to the top 1% of the population. At a very good guess I
would say those figures have continued if not grown since and further that this
has been reflected in the European Union.
What Lester T
Thurow is saying in essence (which I suspect is no surprise to anyone here) is,
THE RICH HAVE GOT RICHER AND THE POOR
HAVE GOT POORER.
The increase in
wealth over the past few decades have been mainly in the value of Equities (or
Stocks) but the only contact most UK workers had with these have been
indirectly through investments of their Pension Funds.
However the
surpluses that has built up in the funds as a result of the increase equity
value has in many cases been “milked” by the employees (both Private and Public) by either taking
Contribution Holidays or siphoning off the fund directly. This has resulted in the workers seeing no
increase in the extra wealth created.
Bearing this in mind it is rather ironic, distasteful and obscene when
you consider that now there is a downfall in equity values that some employers
are downgrading the benefits or asking the workers to contribute more to
maintain their pension values.
Let me say at
this point that in the UK both employee Pensions and Shareholdings are kept as
two separate sources of income and are never merged into one fund.
The call for a more even
distribution of wealth is not a new calling, It was in the 15th
Century that Francis Bacon’s famous epigram was offered to King Henry VII on
protecting the rights of tenant farmers.
He said, “WEALTH IS LIKE MUCK
(MANURE), IT IS NOT GOOD BUT IF IT BE SPREAD”.
Many years later there is the
story of the hard times of the 1939-45 World War when an Aristocratic Lady was
addressing a group of young wives about how to make a nourishing stew from fish
heads. After her talk she invited
questions. A young workers wife stood up and said “ Thank you for your talk, I’m sure my children and myself will
enjoy the soup, however my question is WHO
HAD THE REST OF THE FISH?
3
A few
enlightened UK companies have given their workers access to equality by
employee ownership, Tullis Russell for one but by far the industry with the
greatest number of employee owned companies was the British Bus Industry
although most of them have been swallowed up by the PLC. Groups.
This “exercise” was regarded by
most as a failure for employee ownership.
But if you think of the many models of ownership and Industrial
democracy it left us to study and learn from, coupled with the fact that it
ensured the inevitable Capital Gains from privatisation was more widely spread
than it would have been, I think it was
rather less of a failure than some people purport.
What I have to say on the British
Buses is that the local T U officials were left by their National Leaders to
pursue worker ownership alone except for such organisations as JOL and Robert
Oakeshott who helped us tremendously.
I believe if the Trade Union
Movement had taken a proactive role at that time then the face of, not just the
Bus Industry , but the whole industrial base of the UK would look a lot
different now. It was an opportunity we
couldn’t afford to miss, but we did.
I also believe
we missed another opportunity with the setting up of the latest Government
Share Scheme called the Share Incentive Plan (SIP). If the Trade Unions had put
as much effort influencing the consultation process as the employers and their
representatives then we would have seen a much better deal for the workers, as
it was it was a retrograde step as far as workers were concerned.
Recently the Inland Revenue kindly
gave me the latest figures for employee participants of the current Approved
Employee Share Schemes. They are :-
1.25 million in the Profit Sharing Share Scheme
1.75 million in the SAYE Share Option Scheme
0.7 million in the
Share Incentive Plan
making 3.7 million in all.
If you allow for overlap and
estimate the percentage of Trade Union members in the Total UK Workforce I
think you can safely say that at least 750,000 Trade Union members hold
shares in the company where they work or in other words are Employee
Shareholders.
4
The UK Trade Unions offer a great
many financial services including.
In my
experience of representing UK workers on employee issues for over a decade I have
to say that the majority of workers have very little knowledge of how employee
shareholding and shareholding in general works.
This is due mainly for two
reasons. Firstly most UK workers historically have not been raised in a
shareholding environment and secondly the lack of support, education and
publicity from the workers natural representative source namely the Trade
Unions.
As I said before this has resulted
in a great many trade union members (and officials) remaining ignorant of the
workings, status and value of their shares and how to use them to the best
advantage, be it as individuals or collectively.
I’m sure I don’t have to tell you
that more EDUCATION leads to more EMANCIPATION leads to more POWER leads to more CONTROL.
What the
workers need is someone to co-ordinate their power of ownership and turn it
into control,
This can be done by showing the
individual shareholder that if they act as one, they can influence the
decisions and workings of the company in which they work.
This task could
and should be done by the Trade Unions by education and representation.
Employee Ownership should be
regarded as part of the employees benefit package and should be negotiated for
them by the collective bargaining of the Trade Unions.
5
The questions all Trade Unionists,
both Local and National figures, have to ask themselves is.
WHY NOT SHARE IN THE SUCCESS YOU HAVE HELPED TO ACHIEVE?
WHY NOT SPREAD THE OWNERSHIP INSTEAD OF ALLOWING IT TO BE CONCENTRATED
ON A FEW WHO VIEW EMPLOYEES AS AN ASSET TO BE BOUGHT AND SOLD AT WILL?
WHY NOT INFLUENCE THE DESTINY OF THE COMPANY YOU HAVE INVESTED YOUR
FUTURE EMPLOYMENT IN?
Some might say
that this is the wrong time to talk about employee shareholding while others
would say that the depression in the market is the best time to become
involved, to start at the bottom of the curve so to speak.
Generally at
this moment the balance of power in employee ownership is tipped away from the
workers in favour of the employers, it needs the Trade Unions on board and
representing their members to even the balance out.
What is clear
is where Trade Unions have taken a proactive role in employee Ownership whether
at National or Local level they have proved a great success, both in the
running of the company and in the status of the Union.
So we need to stop missing
opportunities and embrace employee shareholding and Ownership and make use of
the power and responsibility that it brings.
Thank you
DW 30-Sep-02 david@wheatcroft38.freeserve.co.uk