This morning’s speech by Nick Clegg argued for a more ‘liberal capitalism’, to share the successes and benefits amongst many rather than the few. He rightly highlighted the 1980s as a decade of private shareholders and suggested this decade we should encourage employee share ownership. He further argued that employee ownership is a hugely ‘underused tool in unlocking growth’. He used the John Lewis company as a pioneering example in employee ownership in a business and he argued that such companies were able to weather the economic down-turn better than others – seeing better performance, lower absenteeism, reduced staff turnover, improved productivity and higher staff wages.
Philip Chappell and Nigel Vinson made all these arguments and outlined proposals for employee ownership as far back as 1985, in their Centre for Policy Studies paper, ‘Owners All: a proposal for Personal Investment Pools’. If we consider the points made in Clegg’s speech there are obvious parallels with some of the Chappell and Vinson proposals in 1985.
Above all, Philip Chappell and Nigel Vinson argued that by encouraging employee shareholding, the economy would then benefit by increased growth and improved productivity.
It is odd that the obvious benefit of encouraging more capitalists has not been fully addressed by subsequent governments. But it is heartening that the Deputy Prime Minister, in this area as well as in his enthusiasm to see the starting rate of income tax raised to £10,000 (see Maurice Saatchi, Poor People! Stop paying tax!), is following in the footsteps of the CPS. For what we need is more capitalism, not less.
This article was written by Charles Upham, intern at the Centre for Policy Studies.