EOA Insights: Our reflections from the Conservative Party conference
Our bid to demonstrate the accelerating growth and impact in the employee owned (EO) sector, to represent the sector’s policy priorities and to understand the political currents that might affect our future influencing initiatives, began at this week’s Conservative Party Conference in Manchester.
Our conversations and meetings will continue at the Labour Party Conference in Liverpool next week.
The impact of this week’s three-day event has of course littered the news cycle with commentary, analysis, and speculation around the announcements and statements made by headline speakers, and about the conference itself.
Through our employee ownership lens, our three key reflections from the conference are:
1.”Work must pay”
In the backdrop of a significant labour shortage in the UK and the ongoing cost-of-living crisis, a great deal of attention at the conference has been paid to bolstering the country’s labour force. This came across clearly in the Chancellor’s speech on Monday, where he emphasised the importance of bringing more people into the labour market, and “making work pay.”
We strongly support the focus on these two priorities: the UK’s labour shortage must be addressed, and employment must be rewarding for employees and workers.
The Chancellor made two announcements that demonstrate what this might look like for the government, and how they’re planning to accomplish it. Firstly, he announced a review of the benefits system and particularly the sanction regime to discourage people leaving the workforce. He also announced a small uplift to the National Living Wage to at least £11 per hour.
While we strongly support the two core aims above, we urge government to broaden its strategy beyond the focus on benefit sanctions and a marginal uplift to the National Living Wage. With the UK having a poverty rate of 20% even before the cost-of-living crisis, a well-below inflation increase of 5.6% to the country’s lowest paid workers falls short of addressing the fundamental issue of low pay. We would also urge the government to consider looking beyond benefit sanctions to bring people into the labour force and consider actions that may make work more rewarding and desirable to encourage greater economic participation.
We believe that, to bring more people into the workforce, creating “good work” that is worthwhile and attracts employees will be significantly more impactful than punitive measures such as benefit sanctions.
Crafting a policy and legislative landscape to grow EO as a proportion of the economy is just one way that this may be achieved. EOBs (Employee Owned Businesses) notably create “good work” through prioritising employee voice, allowing people in all layers of an organisation to be involved and engaged with the business, improving quality and conditions of a workplace, and can boost incomes significantly by allowing employee owners to share in the profits that their labour generates, truly “making work pay”.
2. The productivity puzzle, high growth sectors, and innovation
Given that the UK’s productivity still lags behind that of other large economies internationally, this “productivity puzzle” has been a strong focus at the conference.
We welcome this focus: improving productivity is an essential part of building a more prosperous, sustainable and equitable economy. However, we were disappointed at the limited focus – almost exclusively restricted in scope to technological innovation and high growth sectors such as advance manufacturing and e-commerce. While these are undeniably critical areas of focus, we urge decision makers to not pursue them exclusively to the detriment of the wider economy and other ways of increasing productivity holistically.
A business, person or industry can only “innovate” to a certain extent, and high-growth sectors make up only a part of the UK economy. Therefore, it is important for government to consider and enact a wider range of measures that can drive up productivity across the entire economy.
On 18th October 2023, the EOA will be publishing research commissioned from independent think tank Ownership at Work, demonstrating the tendency for EOBs to be more productive than and outperform non-employee owned businesses, across a range of sought-after impacts for people, business, the economy, society and the environment. This increased productivity is enabled by the ownership model which unlocks practices and features, such as the flattening of traditional hierarchies to gain insight from all levels of an organisation and increasing the discretionary efforts of employees by aligning their individual interests more closely with the commercial success of the business.
We strongly encourage decision makers to learn from the findings later this month, and to consider wider approaches to increasing productivity across the UK in a holistic way, looking beyond technological innovation and high growth sectors alone.
3. “The party of enterprise and small business”
In his speech to close the conference, the Prime Minister emphasised that the Conservative Party is “the party of enterprise and small business”.
Given that the majority of the EOA’s members are SMEs, reflecting the wider EO sector, we strongly support an emphasis on small business. However, we were disappointed by the lack of tangible policy announcements oriented towards bolstering small business. Alongside others including the Federation of Small Businesses, we welcome the announcement of tougher measures to tackle late payments to small business.
However, more action is needed from government for SMEs, whether employee owned or otherwise, to address policy-related challenges and capitalise on opportunities. To drive this action, decision makers must work harder to engage directly with small businesses and bodies/organisations that represent them.
Recently, the EOA co-signed with other organisations, including Family Business UK and the Federation of Small Businesses, a letter pointing out that the newly formed British Business Council, which aims to “design and drive the future of the British economy,” has been focused on large listed companies, excluding sole traders, small and medium-sized businesses, family businesses and employee owned firms which collectively employ well over half the UK workforce, and who are at the forefront of innovation, employment and wealth creation. Government has since agreed an initial meeting with the EOA and other signatories to the letter to discuss these issues. We welcome this as a possible starting point to engaging with the issues that matter to SMEs, but we continue to emphasise that this engagement must become more consistent, transparent, and focused on meaningful action and change.