From the TUC

Ed Miliband, employee voice and a new economy

17 Nov 2011, by in Economics

This morning, at the Social Market Foundation, Ed Milband made what the Guardian is calling his most important speech since the Labour Conference. You can read more about it here, but highlights included greater voting rights for long term shareholders in takeovers, a place for workers on company remuneration committees and a better system for encouraging vocational skills. Taking on his critics, who accused him of being anti-business when Labour met in Liverpool, he said a new responsible capitalism was “bang on pro-business”.

His “warm up act” was a panel discussion made up of Vicky Pryce of FDI Consulting, Lord (David) Owen and Daniel Franklin of ‘The Economist’. That discussion considered how much capitalism needs to be reformed. David Owen said the idea of the Social Market appealed to left and right, the left focusing on ‘social’ and the right on ‘market’. I pitched in by saying that if you added the word ‘economy’, you had ‘Social Market Economy’, the German model. I’ve spent a lot of time in Germany recently, meeting managers and trade unionists from major companies, trying to learn some lessons. I’m struck that the Social Market Economy is a model that managers and workers, companies and unions, can unite around. It gives them a huge advantage. David Owen agreed that we could learn much from Rhineland Capitalism. He also had some critical things to say about the Coalition Government, arguing that it would be unacceptable if youth unemployment, which topped one million yesterday, was left to grow.

Ed was on very good form. After his speech, he spent 40 minutes answering questions. He was intelligent, confident and witty. I’m very pleased he is continuing to push the idea of good companies and a better capitalism. I managed to ask a question about employee voice, again in the light of what I’ve learned in Germany. I’m struck that major companies I’ve spoken to in Germany are so positive about the rise of China being an opportunity (Ed mentioned in his speech that Germany exports more to China than any other EU nation), but I’ve also noticed real value in the role of the Works Council, which must balance the need for their company to expand in emerging markets with protecting the jobs and the life chances of employees back in their home countries. German trade unions juggle those difficult priorities well and I think there are some lessons for us in the UK.  Ed agreed that good companies see their workforce as their greatest asset and said that most of the time, unions and management were on the same side, fighting for the success of the company, a fact that is often not acknowledged. He’s right about that.

I think today’s speech reflects ongoing thinking by the Labour leader, rather than being the last word on the subject of a new economy, and I hope he reflects more on employee voice. Without it, workers end up doing what they do because their boss tells them to. If their boss is a good boss, that model works, but employees can bring a lot to the success of the company, while defending their own interests, if mechanisms exist for their voices to be heard. We’ll be releasing the results of our German study soon, so I’ll say more about this in the coming weeks, and whilst blindly transporting another country’s model wouldn’t work, there are certainly some important lessons to be learned.


One Response to Ed Miliband, employee voice and a new economy

  1. Neil
    Nov 18th 2011, 8:43 pm

    This is moving in the right direction, however Miliband’s proposals and comments are incredibly timid and conservative given the situation, and I think too late.

    As an ex-trade union activist, now unemployed, the thing that I find most depressing about this whole subject is that the British trade union movement never fought for a version of corporatist industrial relations structure over here. Instead, during the whole neo-liberal period, it spent the whole time on a strategic level being successively cowed or enthralled by the government of the day – always subservient. All this time, though circumstances cried out for it, there was a complete lack of a new, progressive strategic vision for industrial relations and the economy, as a result of which we – the workers and unemployed – are now having to pay a far higher price.

    I think for the TUC/trade union movement as a whole this sudden interest in corporatism and strategic employee voice might be too little too late to stave off a massive economic and political crisis.

    I’m not expecting any TUC blogger to respond to this post because I see that they don’t bother to engage with criticism, however I hope some of you are listening.