From the TUC

Workers on the Board: Left-Wing Ideology or Intelligent Capitalism?

18 Jun 2012, by in Economics

Ah, Sunday mornings! Getting up late (certainly later than on Monday mornings) and waking up slowly in front of the TV, with plenty of hot coffee to hand! Bliss! Yesterday morning, as I was rejoining the human race, I watched the newspaper review on the BBC’s Andrew Marr Show. This week’s reviewers were John McCarthy, the writer, journalist and former Middle East hostage, and Sarah Baxter, editor of the Sunday Times magazine.

I was particularly interested in Baxter’s review (BBC i-player, about 15 minutes in) of the Observer’s interview with Jon Cruddas, MP for Dagenham and Rainham and recently appointed by Ed Milband to head up Labour’s policy review. I’ve known Jon since he was Labour’s Employment Policy Officer and I worked first for the AEU (now part of Unite) and then for Ann Clwyd MP, who at that time was Labour’s Shadow Employment Minister. In her review, Sarah Baxter describes Jon as pursuing “quite a left-wing agenda” including being pro-public sector and even looking at the idea of appointing union officials to company boards.

Regular readers of this blog will know that I’ve taken quite an interest in this issue, since I penned the recent TUC report, ‘German Lessons’. A central theme of that report was that, whilst there’s much we can learn from so-called Rhineland Capitalism – such as high quality apprenticeships, long-term investment and targeting those industries where they can really be successful – those ideas would work even better with a fairer, more inclusive, economic model. It isn’t so simple as appointing union officials to company boards: in the German co-determination system, it is works council members that serve on boards, although I grant that, in practice, those works council members tend to be trade unionists. But that is only so because trade unions are anchored in the workplace and management, to their credit, recognise the positive role that trade unions have to play.

If this idea seems quite left-wing, that’s only because UK economic discourse has such a right-wing centre of gravity. There have been some political attacks on the German Social Model in recent years, but wider German society values both its efficiency and its inclusivity. I interviewed a number of managers, works council members and trade unionists for ‘German Lessons’. One of my favourite quotes comes from Martin Rosik, Human Resources Manager at Volkswagen in Wolfsburg. I’ll quote Herr Rosik in full:

“From my point of view, co-determination does not make it more difficult to take important decisions, but it depends on the way this kind of influence is used by the labour representatives and the company. There is a big common sense that competitiveness and labour welfare are directly linked to each other … Labour representatives expect the company to be competitive, they force the company to be competitive, and take care of the interests of their members. Here you don’t have the classic understanding of what is whose role in this game. It’s a question of how the unions use their influence. They use it in a way that is not combative, it is handled in an aggressive way if necessary, but it is co-operative. If you have a conversation on a matter of importance, and you have a partner and you discuss this with your partner, if he only gives you the answers you expect to hear, you wouldn’t ask him anymore.”

Some might call that left-wing. I think it is intelligent capitalism. I also think it is particularly important at this present moment. Jon Cruddas is doing the policy thinking for Labour, but meanwhile Vince Cable is becoming more and more confident to use the language of industrial policy and Michael Heseltine is putting his shoulder to the wheel, trying to carve out a meaningful growth strategy for the Government (and, God knows, it needs one!). So this is a moment when a better, more equal, more efficient economic policy is, finally, up for discussion.

The TUC, for its part, will continue to encourage that dialogue. At our ‘After Austerity’ conference on Tuesday next week, we have a breakout session on industrial policy, to which Mariana Mazzucato, Ha-Joon Chang, Beck Smith and Stian Westlake will be speaking (and I’ll chip in if I can catch the chairperson’s eye!). If you’d like to join the debate, you can register here: