Published:

18 comments

Rob Wilson is a former Minister for Civil Society, and was MP for Reading East from 2005 – 2017.

George Eaton, of the New Statesmanwrote a week ago today what many on the left believe; that the Conservative Party is going through an intellectual and political crisis. The argument he makes is interesting and accurate – up to a point.

The Tories, he argues, are absorbed by Brexit, hemmed in by the “reactionary” DUP, and haunted by an electorate that has lost faith in Thatcherite capitalism. Margaret Thatcher’s popular capitalism is no longer possible, he says, because there is nothing left to sell.

Meanwhile, Jeremy Corbyn has become electable and socialist ideals are on the march.

It’s compelling because it’s a good narrative: believable and partially true. There is no doubt Brexit is ripping at the seams of the Tory Party, sucking its willpower and energy in the monumental effort needed to get Britain out of the EU’s deathly grip. It is also true that the DUP is not the most appealing of bedfellows if you want to pursue progressive policies, and the debate about the ongoing appeal of a popular capitalism is a real one.

Whether Corbyn is electable and the country ready for socialism, on the other hand, remains questionable, certainly when tested against actual local and general election results.

Whilst the leadership of the country is bashed unforgivingly against the rock of Brexit and little in the way of new, dynamic, policy appears (Michael Gove is the honourable exception), the left will continue to advance the case and win the argument against popular capitalism.

But there is a fundamental weakness in Eaton’s argument that all the Conservative bickering in the world can’t obscure: there is still enormous mileage in a popular capitalist model that enables a fairer share out of the spoils with the entire workforce.

Conservative Ministers and policy-makers have tip-toed around ideas that try to deliver this, such as putting workers on boards.  None have had mass appeal, and in that particular case frightened the life out of business to the point where Government has had to water down its proposals.

But there are better ideas that avoid compulsion yet set a fresh course for a popular capitalism – things that can capture the same public imagination as selling council houses or BT shares to the population.

First, companies sharing a proportion of their profits with employees has to become the norm. The Government should introduce new criteria into its contracts and grants that ensure only companies that share a minimum of ten percent of profits with staff can be considered as Government partners. It leaves the choice to companies whether to do the right thing or not.

Second, alongside a ten percent profit share, the Government should add a minimum five percent share distribution triggered for employees who have been at the company for a minimum of two or three years. It would again be choice for companies, a nudge to do the right thing, but the Government’s £850-billion spending power would concentrate the mind. The benefits of staff retention, productivity, and commitment to the company would soon encourage further take-up.

Third, in any market sector where competition does not function effectively, employees should have the ability to influence boardroom behaviour. For example, water, energy, and railways should all have a ten percent guaranteed employee ownership structure, with associated rights of board representation and voting. Influential employees, not trade unions, are the best defence against the bad behaviour of potential fat cats.

But where does this leave part of the workforce that isn’t in the private sector?

The Government has again tip-toed around the notion of letting public sector workers take on and run public services. There are many who have a desire to form their own mutuals, co-operatives, and social enterprises to deliver better services for their local area. Why shouldn’t public employees have the right to run local or national services if they can do it more efficiently than the Government?

The talent within the public sector should be encouraged and supported to be creative and innovative. Put in the democratic safeguards by all means, but why shouldn’t public servants, for example, have a real stake in running housing, leisure, children’s or adult services within local authorities?

Change to a fairer society and more considerate capitalism does not have to be either draconian or socialist. It can be introduced by a Government that provides choice, levels the playing field, and leaves it to people and companies to decide what is in their own best interests.

The idea from the left that popular capitalism has run out of runway is simply wishful thinking, but it needs a Government with the vigour, determination and clear thinking to see it prosper.

18 comments for: Rob Wilson: Bold ministers could breathe fresh life into popular capitalism

Leave a Reply

You must be logged in to post a comment.