Whatever your politics, party conference season is always fun. It’s a grand stage for politicians to step forward, inspire the faithful and try to win over undecided voters. Major policy announcements are made to rapturous applause and there’s usually the odd controversy and minor mishap too.
John McDonnell, the Shadow Chancellor, made the headlines at the Labour Party conference last month with plans for an “inclusive ownership fund”. If elected, Labour will require companies with more than 250 people to set up a fund and transfer 1 per cent of equity in each year, up to a total of 10 per cent. As part-owners of the business, employees would be entitled to receive an annual bonus of up to £500.
Some applauded the principle of workers being part-owners of the business that employs them and enjoying a share of the profits. Others slammed the idea: the Institute of Directors (IoD) warned of a “negative effect on business investment and business formation”. The Bank of England’s Chief Economist had an interesting take. Andy Haldane, who hails from Guiseley, has a reputation for fresh thinking. While stopping short of endorsing the plan, Haldane noted that research had shown that firms which are employee-owned can perform better than those which aren’t.
Whatever your view, there’s clearly a debate about how well capitalism is serving society, or if it’s too often the other way round. Look at Britain today: some are doing well while others are left behind. Business isn’t an idle spectator in this debate. The bottom line is crucial to any business leader, but it doesn’t always have to be the be-all-and-end-all. Bradford has a proud tradition of looking after its own. Visitors to Saltaire are amazed by the scale and beauty of the town that the Victorian industrialist Sir Titus Salt constructed for his workers, now a World Heritage Site. The names of other Yorkshire philanthropists echo in Roberts Park, Forster Square and Lister Mills.
Skipton Building Society was recently named in the Sunday Times’ Top 100 Companies to work for for the fourth year in a row and in August unveiled first half profits before tax of £104.7m. Skipton is nominated for three awards in The Yorkshire Post’s Excellence in Business Awards 2018. Not bad for a mutual organisation which is run for the benefit of members. Bradford’s Yorkshire Building Society, another mutual, has enjoyed similar success; it also reported a solid performance in the first half.
As Chairman of the Bradford Economic Partnership, I’m clear that the economic growth that we are striving to achieve must be inclusive. I’m a big fan of the Keighley Textile Academy, which was launched in 2017 to train skilled workers for local manufacturers. The first cohort of students included three Asian women who had been unemployed and who were then taken on by a local business, JTS Cushions. The number may be small, but the Academy was a game-changer for these women.
The Economic Strategy for Bradford District 2018 – 2030 is our plan to support other fantastic businesses and grow the economy through innovation, increasing productivity and creating wealth. We want to see wages rise: average earnings in Bradford are £476 per week against a UK average of £550 per week. Putting more money in peoples’ pockets would make growth more inclusive and reflect the rising cost of living. It also gives people more to spend on local shops and services.
The Ecology Building Society, an ethical lender which finances environmentally-friendly projects, is leading the way here. The Silsden-based group is accredited by the Living Wage Foundation, which encourages businesses to pay workers what it sees as the ‘real’ cost of living. The Living Wage Foundation puts this at £8.75 per hour for workers outside London compared to the Government’s National Living Wage of £7.83 per hour for the over 25s.
Increasing workplace productivity is another piece of this jigsaw. According to one measure of productivity, gross value added (GVA) in Bradford is £18,600 versus a UK average of £26,000. If it reached the UK average, the value of Bradford’s economy would rise from £10bn to £14bn.
So I’ll leave it to others to debate the pros and cons of inclusive ownership funds. But you don’t need to be an economist to know that paying someone fairly for the work they do and giving them a say in what happens at work should make them productive. You can call this politics; I call it common sense.
• Dave Baldwin is chairman of the Bradford Economic Partnership and chief executive of Burnley Football Club.