hounslowmomentum-blog

[hounslowmomentum-blog]

A proposed motion for greater transparency at Conference

By David Pavett

Conference confusion

In our branch and CLP contribution to Labour's Democracy Review we pointed out that effective democracy requires good quality information. We pointed out that Labour did not, at the time of our discussion, provide that. This continues to be a major problem.

The highest decision-making authority in the Labour Party is its Annual Conference. It is Annual Conference that approves or rejects major policy developments and rule changes. It is therefore a matter of the greatest importance that all members have easy access to Conference decisions.

The extraordinary thing is that we as members have no such access.

It would be reasonable to expect that after Conference a booklet would be prepared and sent to all members (in digital form at least) to bring them up to date with Conference decisions. That doesn't happen so where then would a Labour member go for such information? There seem to be five possibilities. One could try:

 (1) the LP Facebook page

(2) the official LP website

(3) Tom Watson’s MyLabour website 

(4) the Policy Forum website

(5) the LP newsfeed.

None of these sources give anything approaching full details about the decisions made at Conference and most of them give no such information at all. In fact, in trying to go through the main website it turned out that Membersnet is being phased out (even though it carries a note to say it has just been updated) and is being replace with Members Hub. As far as information about the results of Conference 2018 are concerned Members Hubhas all the appearance of a firewall designed to stop one from getting details of Conference decisions.

Labour HQ could not provide the information either and advised contacting the Governance and Legal Unit. That was no help either. They said that no document containing all of this year's Conference decisions has been prepared and that no information is available as to whether it is intended to produce such a document.

If this is not a serious democratic deficit then it is difficult to know what could be called such. It is also an easily rectified problem that would allow Labour Party members to feel more involved in the entire conference process. As such we have tabled a motion for the Isleworth and Brentford general committee suggesting access to this important information.

Our Motion

This branch is of the view that Party democracy requires that all party members have full and easy access to all Party policy decisions. It finds it unacceptable that this information is not given as a matter of course through a policy area for members on one of the Labour Party websites. In particular it believes that all the policy decisions of Annual Conferences (starting with 2018) should be available to Party members on a Party website.

The branch requests the General Secretary, the Party Leader and the NEC to ensure us that this information will be made available in easily accessible form without delay and that the same information for at least the party conferences from 2015 should similarly be made available.

[hounslowmomentum-blog]

McDonnell’s Swedish lesson: flat-packed socialism?

By Vivak Soni

A brief primer on Labour's latest economic policy, as outlined by the shadow chancellor John McDonnell at Labour Party conference in Liverpool on Monday 24th September. Coverage of shadow chancellor John McDonnell’s shared ownership plans were subsumed by Brexit. Odd, given this may have been the most far-reaching element coming out of the event.

If McDonnell gets into Number 11 Downing Street, these proposals will be transformative. So we thought it would be useful to look at them, and also those of the Meidner plan, a similar plan from the Swedish labour movement in the 1970s.

What we know so far

At September’s TUC conference, McDonnell first introduced the proposal that all private companies employing more than 250 people would have to set up “ownership funds,” giving workers financial stakes in their companies and increasing powers to influence how they are run. At Labour conference these plans were further fleshed out. Here’s what we know so far:

·     Companies with over 250 members of staff are required to transfer at least 1% of their ownership into an inclusive ownership fund (IOF) each year, up to a maximum 10%. IOF funds will be managed collectively, and shares will not be available for trade or sale.

·     Employees therefore become part-owners of the companies they work for, receiving a yearly flat-rate dividend of up to £500.

·     Dividends that remain after individual worker payouts go to a national fund, which is then used to invest in public infrastructure and services.

·     The levy on private businesses is estimated to be £2.1 billion per year.

·     An initial 40% of the private sector workforce stands to benefit from these changes.

Taking inspiration from the Meidner plan

Details on these proposals are still scant (so much so that we don’t have a collective policy name yet). However, there are common links between Labour’s new plans and the earlier Swedish one. Named after Swedish Landsorganisationen (LO) economist Rudolph Meidner, the plan had two main aims:

Equal work should be equally paid, regardless of the profitability of the firm, the size or location of the workplace. What matters is the kind and nature of work, and the skills which are needed to perform it.

 Wage differentials should be equalised, but not totally eliminated. Different wages should be paid for different kinds of work.

There are several excellent in-depth analyses of the Meidner plan (including here, here, and this analysis by Rudolph Meidner himself in 1993, available as pdf here). This is a (hopefully) helpful summary. The general outline is summarised in the chart below:

The conflict between full employment and price stability is simply that rising employment pushes wages up, in turn driving inflation. To prevent unchecked inflation, the Meidner plan posited that wage demands were to be restrained. This ‘Solidarity in Wages’ successfully raised the wages of the lowest waged workers, thereby increasing equality whilst maintaining full employment and keeping inflation low. Equality was pursued not only by wage solidarity, but also by a system of universal welfare by a large public sector.

The full implementation of the plan would result in the creation of wage-earner funds, financed through profits made by firms (sounding familiar yet?). The eventual goal was for these funds to become majority owners in these firms as profits continued to flow in.

The legacy of the Meidner plan and it’s relevance for Labour’s new policy

The Meidner plan was never implemented in full: a corporate backlash resulted in a much-watered down version of the wage-earner funds being introduced in 1984. Shares were never issued, with funding instead coming through a profits tax. Without worker funds invested in firms, the ‘Solidarity in Wages’ policy backfired. Whilst inflation was kept in check by wage restraint, businesses gained huge excess profits with no increase in outlay, and no benefits for workers in the form of shares.

What lessons can Labour take from the Swedish experience? As the LO discovered, corporate interests will be keen to water the policy down to an unrecognisable state. Labour will also face enmity from within as members of the PLP who aim to prevent such changes from even getting off the ground (alas for open selection). This point could prove crucial. When the Meidner plan was introduced, Sweden had a long legacy of social democracy stretching back to the 1920s (though high growth rates and full employment in the post-WW2 economy muted talk of nationalisation). In contrast the UK has continued to embrace the free market and the privatisation of state infrastructure since the Thatcher years. The argument has been reframed to such an extent that talk of expanding the social sphere is deemed radical. You can imagine how IOF part-ownership of companies will be received!

The director of the Confederation of British Indsutry (CBI) Carolyn Fairbairn gave us a taste of the backlash to come:

“Their diktat on employee share ownership will only encourage investors to pack their bags and will harm those who can least afford it.  If investment falls, so does productivity and pay.”

There’s a strong argument for why she’s wrong. Firstly, these are socialist policies operating within a free market system, and as such are an accommodation as opposed to an upheaval. As such not only are they likely to appease unrest amongst workers, but workers are far more likely to support pro-business policies when they are in their own interest. Secondly, having worker knowledge of the labour process involved in decision making is likely to improve productivity and go some way to soothing the disconnect between workers and management.

These accommodations to business are likely to frustrate many on the left. Rather than attempting an upheaval of a broken system, McDonnell’s plans are set at a more pragmatic level and may well provide a platform for the redistribution of wealth and the resuscitation of our ailing public infrastructure. Tempting though it is, we won’t venture down the Social Democracy vs Marxim wormhole in this particular piece.

Labour’s plans are not a carbon copy of the Meidner plan, however. Where the LO envisioned worker-funds to become majority owners in these firms as profits continued to flow in, McDonnell has stated that the IOFs will cap at 10% ownership, with any excess going towards public services. This could prove a shrewd move as it prevents the IOFs acting in direct competition with firms (starting as they would be from a position of weakness), though a 10% stake in many firms is still likely to make these worker funds the largest shareholders with a substantial voice to influence business policy.

The framing of these proposals is also worth noting here. Whilst these are not huge systemic changes they are presented as exactly that. From a left perspective this is encouraging to hear, with hopes that the 10% is a stepping stone towards even more radical transformation (something big businesses will be aware of too, and the reason why attempts to shut it down before it ever finds its feet will be inevitable). This is not radical politics, but it may be the first tentative step down that road.

For further information links to three articles are provided in the main text. All are recommended, though particularly Meidner’s own analysis from the 1993 Socialist Register.