One of the proposals from the Labour Party conference which has created predictable opposition from the CBI is to ensure that in the large companies in the UK, there is a commitment to take a proportion of their profits (through the shares) and place them in a fund for the workers, and give these people greater opportunity to influence board level decisions. As with all such policies there will be a lot of detail to work out, but in principle this should be seen as a good way of both rewarding the people who do most of the work in large companies and at the same time give the workers an incentive to see the business become profitable and efficient. The profitability of most companies depends on many factors which include the efficiency of the working practices and the application of new ideas that often will emerge from workers who every day have to deal with the gaps in the planning coming from the board or the directors. The fact that the CBI have opposed this is hardly a shock, they represent the very largest businesses in our nation and have been consistent in their criticisms of policies that are intended to protect and support workers. They opposed the minimum wage introduced under Labour and then what George Osborne called the Living Wage (which it isn’t) and each time they claim these policies will damage businesses and each time they fail to eat humble pie when they are proven wrong.

Having worked closely with one person from the CBI when I was a member of the South East England Regional Assembly (SEERA) I know that what they say publicly is not always a true reflection of what they really understand. The same is true of trade unions which I have been part of and political parties which I have observed.

The claims from the CBI which are frankly ridiculous and counter to their usual objections is that this approach will limit wages and reduce productivity. It is certainly possible that in some settings where the workers are deeply opposed to their bosses, that they will use their access to the board as a way of preventing changes being made that impact on their working lives. However in settings where there is a good relationship or where the workers understand the value of improving productivity as a way of increasing their wages and the “inclusive ownership fund” they will welcome the changes that can improve the business for all concerned.

One of the really positive aspects of this approach is that it will begin to change the culture of a small but overly influential part of our nation’s economy. At the moment the majority of the risk takers and innovative entrepreneurs in society are the people who start businesses and begin to grow the economy in a meaningful way, usually doing so through small and even micro enterprises. If they are successful they will be approached on an weekly basis by brokers who encourage them to sell their successful businesses to larger businesses, and a few of these people may stay on the new boards until they get fed up with the way in which plcs operate. In order to make their businesses look even more attractive to the big businesses they are encouraged to reduce salaries and get the workers to do even more work, often in the end destroying the whole culture of the business. Sadly some do take the advantage of these proposals and although they walk away with relatively large sums of money in their pockets, their businesses end up being absorbed into large enterprises managed by people who don’t really understand the nature of the organisation. These people often earn disproportionately large salaries whilst in essence the people who are left as the risk takers are the people who joined the business and contributed to its success in the early days and are now treated as numbers on a page, rather than being recognised as the people who make the business work well. Thankfully some entrepreneurs ignore the brokers and instead of squeezing more out of their workers, they attempt to grow the business in a way that rewards everyone. As a result of this Labour proposal, the nature of big business may begin to change, bringing the two approaches, a little more into alignment and if so this is very good news!