Wednesday, 11 February, 2015

You may have noticed in recent weeks that politicians are struggling to avoid being labelled as either anti-business or anti-worker. David Cameron’s call for “company bosses to give their staff a pay rise” was countered by the TUC saying this is “If elected again his policies would do the opposite”. That exchange came shortly after Labour were accused of being ‘anti-business’ by the Chairman of Alliance Boots and others.

Last Wednesday’s Newsnight added an extra dimension to this debate, when Political Editor Allegra Stratton said Labour may not be harmed by appearing anti-business (referring to polling showing that a majority of the public think government should be ‘tough on business’).

This reveals an extraordinary situation. It is widely recognised that certain companies (banks, payday lenders, prominent tax-avoiders) are disliked, in some instances quite legitimately, but the polling referred to on Newsnight suggests a distrust of business in general.

This distrust – and its potential consequences – needs to be appreciated by the senior managers of large UK companies or their shareholders. Research shows that a sense of unfairness among employees harms productivity, but it also appears that there is a political risk associated with a breakdown of trust in business, that politicians may find it disadvantageous to promote legislation that benefits companies.

This appears to me to be a consequence of a cultural acrimony, in which senior managers live in a “boardroom bubble”, dismissive of outsiders’ views, and the majority of everyone else thinks (according to the British Social Attitudes survey) that “Big business benefits owners at the expense of workers” and “ Management will always try to get the better of employees if it gets the chance”.

The UK has to operate in a changing, competitive world, and if we all – from the shopfloor to the boardroom do not hang together “most assuredly, we shall all hang separately”.

There are practices already current in British companies that do recognise a need to build a collaborative team ethos, from performance bonuses that are extended to the whole workforce (as at Sainsbury’s), to bringing employees into decision-making structures (as at First Group, which has a non-senior employee – currently a train driver – on its board of directors), to full-scale employee ownership (as at John Lewis) but these practices are far from universal.

Of course, as others have noted, any unwillingness to act on the part of business could be an issue of collective action - higher wages could benefit the wider economy, but which individual companies are willing to jump first?  It is issues such as these that our politicians must grapple with.

Whichever party or parties form the next government, they have an opportunity to build a culture of industrial relations that is internationally competitive because it is domestically collaborative; working with key stakeholders to incentivise and encourage practices such as those mentioned above, as we have previously proposed. If this is done, politicians of the future will not have to choose between being seen as ‘pro-business’ or ‘pro-worker’, as the two will be clearly aligned.

Duncan Exley, Director, the Equality Trust