Labour, labour and workers on boards

A very quick point about how, in my opinion, Labour should position itself in relation to the question of workers on boards. Obviously it should support the idea, but the issue is how to argue this in public.

In general terms, I would steer clear of trying to argue this on a technical/business case basis at all. It gets too complex too quickly, someone will start talking about Germany, which really isn't helpful for various reasons, and it will have zero resonance with the public. Rather, I think we should go for something like this...

Labour will give working people a say in the businesses they work for because we believe they deserve recognition for what they contribute to the success of the modern economy. In our party we value labour - the contribution of the people of Britain make when they are at work - and we believe that contribution deserves recognition in the way business is run.

Currently British workers miss out. In many major economies working people have the right to representation at the top of business through board membership. The systems differ but the idea is the same - business relies on its workforce for its success, so it's right that employees get a say in how companies are run. 

But Britain is different. Our system does not recognise the contribution of working people. In fact, it only gives power to faceless financial institutions. They alone have the right to elect people to the boards of our biggest companies.  

Labour believes this model belongs in the last century. It creates a closed circle of influence between corporate and financial interests while denying a say for working people. 

It doesn't even make sense on its own terms. In most companies investors do not contribute to the business (not even capital) most of the time. And in fact the 'shareholders' who are given power are most often intermediaries, often from outside the UK, who invest in thousands of companies and have no loyalty to any particular one. Yet currently investors alone are given a voice in business, whilst those that work for business are not.

We know from media reports that behind the scenes the business and financial vested interests are already fighting tooth and nail to defend the current governance establishment. They prefer a system where it is only the City speculators who get a say on who runs your company and whether it gets sold, or broken up. They are happy with a system riddled with conflicts where it's the lavishly paid hedge fund managers who decide whether the executives who run our companies are paid too much. And as we all know, those investors routinely rubber stamp even the most exorbitant fat cat pay deals put in front of them. 

We hope the Government holds its nerve and does not give into the corporate and financial lobbyists. But we should not be surprised if they buckle.

So Labour believes this system must change. It is time to recognise the contribution of the British workers whose labour creates the products and services that businesses sell. We should give them real influence in the businesses that they work for. We should modernise company law to correct the imbalance that denies employees a say, but gives power to hedge funds. If we give powerful voting rights to overseas investors that speculate in the shares of our major employers, then it's right to give the programmer or secretary or driver or picker who works for those businesses some power too.  

As employees you have made a very real commitment to a business, and have contributed to its success, and the Labour Party will recognise that by ensuring you have have a voice through mandatory board representation. Nothing less is fair, and anything less from this Government will represent a huge climbdown under pressure from their corporate and City paymasters.

But Labour will stand firm. We believe this reform can create a new deal - forging an alliance between the workforce and management within business. We believe this will help business take a more long-term perspective, rather than chasing the short-term demands of financial markets. This will be good for all of us, and for our economy. But most of all we will do this because it is right, and because it's fair to you, the working people of Britain.