When Theresa May talked about industrial strategy, reform of corporate governance and workers on boards this summer, her words came completely out of the blue. She wasn’t responding to a hot issue in British politics. She wasn’t jumping aboard a populist or media bandwagon. Few in her party cared about these issues at all. In almost every serious respect the issues were as dead as dodos in British politics.
Dust had gathered on terms such as industrial strategy and workplace co-determination ever since Margaret Thatcher entered Downing Street in 1979. Britain fought hard throughout the 1980s to thwart attempts to develop European company law. Yet here, suddenly and paradoxically, was a senior Tory politician, in the wake of the EU referendum, talking about the strategic failures of British management, and the case for employees and customers to sit on company boards, in ways that raised distinct European echoes.
Corporate governance and industrial democracy have been the neglected Cinderellas of British politics and economic thinking for decades. May has shaken that all up with a single speech. Suddenly, the ideas she floated in her brief leadership campaign are part of the mainstream political agenda. You could almost say they have become fashionable – if an endorsement by Mike Ashley of Sports Direct this week for a worker to sit on his board can be dignified in such a way.
The larger question is where this might all be heading. The answer, as with other parts of the May project, is that we don’t yet know. This autumn, business secretary Greg Clark is expected to produce a consultative paper, the first real test of government thinking. Lobbyists will already be hard at work trying to dilute the options. But that’s not a reason for not taking the subjects seriously. And with the TUC congress starting in Brighton next week, the labour movement should engage intelligently too.
For decades, after all, British companies have too often been run by people, such as Ashley, who think management always knows best, and that employees know nothing and are essentially expendable. The idea that industrial democracy might have something positive to offer British business has effectively been sidelined since James Callaghan’s Labour government shelved the Bullock report in 1977. Such thinking has been routinely dismissed as out-of-date corporatist nonsense or red tape.
The unions haven’t always been much better. Hugh Scanlon of the engineering workers’ union, one of the infamous barons of the 1970s, once said he supported management’s right to manage and the unions’ right to stop them doing it. Jack Jones, the transport workers’ leader, took a different view. Jones was always genuinely interested in what used to be called workers’ control – that’s another phrase you don’t hear much these days – and sat on the Bullock committee, which recommended “a real, and not a sham or a token share” for employees in company management.
British capitalism has been transformed in other ways since those days, of course. Heavy industries have gone to the wall. Service industries now occupy the lion’s share of economic activity. The unions are far less powerful. The nature of work continues to be transformed by women’s employment, part-time and temporary contracts, changes to retirement, home-working and new technology.
But industrial cooperation remains a very meaningful principle nonetheless. Last month I went with the TUC’s Frances O’Grady to BMW’s Cowley car works in Oxfordshire and talked to management and workforce representatives. German co-determination rights don’t apply to those working for German companies in other countries. But German management culture does, and the impact is revelatory, in Cowley at least.
Chris Bond, a senior Unite shop steward, sits on the global works council with BMW and gets plenty of advance notice of company thinking. Longterm strategy, research and development, and workforce training and education are tangible results, he believes. “On the basis of experience,” he says, “I would far rather be managed by a German manager than a British manager. The British ignore what you say to them. The Germans take it seriously and act on it. When this plant was run by a bloke called Andy I never met him. But Gunther has an open door.”
There are lots of reasons why Cowley hasn’t had an industrial dispute since the British Leyland days in, appropriately, 1984. They include fear that the owners would simply take the jobs overseas, tighter industrial relations laws, economic downturns that mean workers don’t want to take risks and, not least, the fact that BMW has invested in the plant so that Cowley is now producing a successful product, in the shape of the latest iterations of the ever-popular Mini.
But you can’t talk to either management or workers at Cowley without seeing that corporate culture is a big part of the reason too. Management’s watchwords of trust, respect and integrity may come straight out of a management theory textbook, but it’s a better textbook than in the past.
The changes brought in by the German owners mean the workforce are no longer seen as the company’s enemies. Assembly director Gunther Böhner calls them the company’s greatest asset. The workers – associates, as Böhner calls them – seem to feel they are respected. “We are a constructive partner,” says one. “We used to be destructive morons.”
May has not unveiled any of her detailed thinking on corporate governance. There’s also a very big question to be answered in any government proposals about whether employee representation means union representation. That was a divisive issue in Bullock nearly 40 years ago. Ministerial instincts are likely to be similar to Mike Ashley’s; he might talk about a worker on the board but he’s having nothing to do with the unions.
But that’s not a reason for smart unions to stop thinking about May’s ideas. O’Grady is certainly interested in talking to ministers. While Labour has little prospect of power, they might be better occupied talking to the Tories about ways in which “sharing responsibility for the success and profitability of the enterprise”, as Bullock put it long ago, can improve the nature of workplaces across Britain.
- This article was amended on 9 September 2016 to correct Gunther Böhner’s job title to assembly director.
