Greater Employee Involvement (Hansard, 30 April 1985)

§ Mr. Tony Baldry (Banbury)

I beg to move, That leave be given to bring in a Bill to promote and stimulate greater employee involvement at the place of work. For want of customers buying British goods, Britain's share of world trade has halved during the past 20 years. Getting more people into work means Britain winning more world trade. To do that, we have to become even more competitive. That means better productivity, more innovation, better delivery dates, improved design and better employee involvement and participation.

The companies that are doing well, be they large or small, the companies with the winning streak and in which personal commitment and dedicated hard work are evident are invariably those which encourage and foster employee involvement and participation.

Indeed, many of the best-run British, American, Japanese and German companies insist that employee involvement is a crucial element in their success. In short, all the winning-streak companies promote employee involvement. Involving employees, listening to their views and advice, and making them feel part of the team make obvious sense to any business. If employees better understand the fortunes of their firm, its finances, its markets and its new technology, and if people feel personally involved with their company's success, they will be more ready to innovate and change and thus better able to compete.

Also, if employees have a financial stake in their company there is a greater incentive to see their firm prosper and do well. Profit sharing and employee share ownership schemes make very good sense to any business. Many companies are encouraging employee involvement; many companies promote wider share ownership. Employee share schemes now cover some 1.5 million employees.

After more than 100 years of very slow progress, profit sharing started to spread rapidly in Britain in the 1970s, so that today some 2 million employees are participating in schemes. The link between profit sharing and employee shareholding was further encouraged by the tax concessions in recent Finance Acts. The present Government have extended these so that today profit sharing linked to employee shareholding is an extremely attractive and cash-effective way of rewarding all employees from executives to the most junior person on the shop floor.

Indeed, the attractiveness of profit sharing has been borne out by an extensive survey published by the Industrial Participation Association, which showed that some 91 per cent. of those surveyed approved of profit sharing.

How many people are aware that the bank clerks in any of the big four banks, or shop assistants serving in, say, Marks and Spencer or British Home Stores, may be shareholders in their companies as a consequence of profit 140 sharing? Nothing less than a quiet revolution is taking place under our noses, and it is no less significant because it is often unnoticed.

Clearly genuine employee involvement cannot be imposed by Government. Every company and business is different and successful schemes of participation need to be mutually agreed having regard to the different circumstances in different companies. But employee involvement can be greatly stimulated and encouraged by Government. While many companies, big and small, are fostering practical participation, there are thousands of firms in which this is not happening. Invariably this is not for want of will but simply because of lack of encouragement and of suggestions as to how a start might be made.

To help these firms make a start on employee participation, a body with a budget and influence needs to be given the task of encouraging and stimulating employee involvement. The obvious body is ACAS—the Advisory, Conciliation and Arbitration Service—formed by Government but independent of Government, involving management and trade unions, employers and employees. Indeed. in its annual report last year ACAS noted the pressing need for employees to be further involved in consultative and decision-making processes in the organisations in which they work, if their talents and energies are to be released and their willing commitment secured to the measures necessary for economic recovery. However, ACAS officials reported that progress in this area has been slow and there remains much to be done. Today, therefore, I seek to introduce the Bill. It is short and simple. It has support in all parts of the House. It would place on ACAS a fresh statutory duty to promote the code "Employee Involvement and Participation" drawn up jointly by the Industrial Participation Association and the Institute of Personnel Management. It is a code drawn up by leading trade unionists and industrialists and others concerned to see positive participation at work. It is a practical, common-sense code which gives sound, straightforward advice and guidance to help any business, big or small, better to promote participation, to the mutual benefit of all involved, to help them compete better and win back business for Britain. If we can work effectively together, we can win more of the world's markets.