Employee Shareholding and Participation in Corporate Governance

Debate between Lord Young of Cookham and Lord Greaves

Thursday 11th October 2018 Lords Chamber

[Lord Greaves (LD)]

My Lords, I congratulate the noble Lord, Lord Haskel, on getting this short debate on a topic that is suddenly topical again, quite rightly. The Question refers to two different ways to involve employees in the bodies they work for: greater employee shareholding and participation in corporate governance, which together might loosely be called industrial democracy. I believe they go together.

If we believe in the importance of individual people’s ability to control their lives autonomously but co-operating with other people in society in communities—this is fundamental to my political beliefs as a Liberal—this is a vital issue. Discussion of it has waxed and waned during my lifetime. Unfortunately, there has been a long period of quiescence, both in my party, the Liberal Democrats, and more generally, but in my lifetime it has ranged across the political spectrum, from the Liberal party, the Industrial Co-partnership Association, now the Involvement and Partnership Association, the Co-operative movement generally, the Institute for Workers’ Control, the Employee Ownership Association—I mention that as a plug for a wonderful pamphlet that has just been written by my noble friend Lady Bowles; perhaps she will refer to it in her speech—and, most recently, the announcements from John McDonnell, which have plonked this issue firmly back on the political agenda. He is to be congratulated on doing that.

I have some quotes that show how it has spread across the political spectrum. The Institute for Workers’ Control marched under a banner saying:

“No man is good enough to be another man’s master”.


Who can disagree with that? But look at the way we run society. The foreword of a report on the Liberal co-ownership proposals in 1948 was written by that great Yorkshire Liberal Elliott Dodds, who referred to,

“the saving sense of proprietorship”,

which says the same thing in rather different language. He goes on to write:

“This can be done in one way and in one way only—by laying it down that they shall have the opportunity to share in the direction and fortunes of the enterprises”,


in which they are employed. The motion passed at the 1948 Liberal Party assembly—before even my time—said that the employee is,

“to be entitled to elected representation on the board of directors”.

So the idea has been around for a long time, across the political spectrum.

At the first election I fought, unsuccessfully, in February 1974, the Liberal Party election manifesto said:

“Firstly, employees must become members of their companies just as shareholders are, with the same clearly defined right. Secondly, it must be accepted that directors in public companies are equally responsible to shareholders and employees. Employees must be entitled to share in the election of the directors on equal terms with shareholders”.


The high-water mark of the campaign for this kind of thing was the Bullock report in January 1977, the report of the Committee of Inquiry on Industrial Democracy, chaired by Lord Alan Bullock, which included such luminaries as Jack Jones, Clive Jenkins and one David Lea, now the noble Lord, Lord Lea of Crondall, who I look forward to hearing later. This was a thoroughgoing statement of co-partnership. The politics of that time meant that it did not succeed, but the majority report, at chapter 9, paragraph 13, reads:

“Our conclusion is therefore that there should be equal representation of employees and shareholders on company boards”.


There are lots of questions in the modern age relating to multinational companies, the global economic and financial environment, the flexible economy, the gig economy, bogus self-employment and all the rest, and how you deal with the public sector. I believe that this is a topic whose time has come again, both for employee share ownership and involvement that way, and involvement in the institutions of the companies. We had a letter this morning from the noble Lord, Lord McFall, the Senior Deputy Speaker, asking for ideas for a special inquiry committee for 2019-20. This is a brilliant topic on which the House of Lords could do a lot of useful work and I invite everybody here who is interested in the topic to write to the noble Lord, Lord McFall, and suggest that he put it forward.

[Lord Young of Cookham (Con)]

My Lords, we are constrained on time and I urge all noble Lords to participate in the corporate governance of the House and stick to four minutes.

Local Government Finance

Debate between Lord Young of Cookham and Lord Greaves

Thursday 13th July 2017 Lords Chamber

[Lord Young of Cookham]

Well, I hope that the noble Lord’s words of wisdom have fallen on his Front Bench as well as my own. I just make the point that they did revalue in Wales, in 2005; 33% of homes were placed in a higher band and only 8% of homes were placed in a lower band. Two-thirds of the net rises were among homes originally in bands A to C, meaning that in that case revaluation hit the less well-off households the hardest. Therefore, I note the case that was made, but I have to disappoint the noble Lord and say that that is not on the agenda.

I was encouraged to hear the noble Baroness, Lady Donaghy, say that she has three energetic candidates waiting to fight in her ward. I will make it my mission to ensure that they are opposed by three equally energetic, dynamic and motivated candidates from my party so that we have a proper contest in whatever part of Southwark she may live in.

The noble Lord, Lord Shipley, raised the point about local authorities investing in property. Like him, I saw the article and made some inquiries following the leader in the Times on Tuesday about local authority property investments betting with taxpayers’ money. There are strong checks and balances in place to protect taxpayers’ money, and local authorities are required to ensure that they have the right skills and commercial expertise to make investment decisions. However, we are actively monitoring the nature and scale of local authority commercial activity, working closely with the sector to ensure that the governance framework continues to be appropriate.

Yes, we have to do more on housing; I recognise that. I have some briefing here on housing, explaining how we are building more council houses than the Labour Party. I will not read this out because I am short of time, but I agree with one of the thrusts of this debate that we need to raise our game on housing.

I say to the noble Lord, Lord Greaves, that it says here that you should not comment on an ongoing police investigation, so I will not.

[Lord Greaves]

I was very careful not to comment on the ongoing police investigation. I commented on what is happening in Liverpool council and Lancashire council, which is alarming.

[Lord Young of Cookham]

I will be even more careful by moving quickly on.

The noble Baroness, Lady Pinnock, made the interesting proposal that we should somehow topslice DVLA proceeds and VAT and give it to the local authorities. However, they would not then have the certainty that they have at the moment, because they would not know how much they would raise. Local government would be out of pocket because it would have kept the money and we might simply reduce the RSG to that local authority by the amount that it was going to get from the VAT, so actually you would be back where you started. I note that in the many reviews of local government finance that proposal has not found favour.

In conclusion, local government has met some major challenges recently. It has faced immediate demands from emergencies: terrorist attacks in London and Manchester and the fire at Grenfell Tower. It is dealing with these emergencies against a background of rising demand for services in key areas such as adult social care. It has shown willingness and ability to work together across boundaries of all kinds, not just geographic boundaries but social and political ones as well, to best support the communities it represents.

Despite such challenging conditions, councils continue to deliver, and council tax is expected to be lower in real terms in 2019-20 than it was in 2010-11. Councils have embraced innovation and transformed the way they work to deliver services for their local areas. We must create the conditions for strong local public services to serve our communities. This will support the important work that our public sector workers do in ensuring that all our citizens are provided with high-quality public services at local and national level at every stage of their lives.