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Employee-owned Organisations

Volume 717: debated on Thursday 25 February 2010


Asked By

To ask the Secretary of State for Business, Innovation and Skills what plans Her Majesty’s Government have to encourage the growth of employee-owned or part-owned organisations in the private and public sectors.

My Lords, the Government take a close interest in employee-owned organisations and the positive role they can play in fostering entrepreneurship and innovation in the private and public sectors. Last December, my colleague Tessa Jowell said that there are important lessons for our public service reform agenda to be learnt from studying companies such as the John Lewis Partnership. She announced the creation of an independent commission on ownership, chaired by Will Hutton, and hosted by the Oxford Centre for Mutual and Employee-owned Business. The commission’s work will help inform developing government policy around such issues as staff engagement, customer service, risk management and links with the wider community.

I am grateful to the noble Lord, Lord Baker. I am also grateful to my noble friend for his fairly extensive reply. Given the evidence from the recent CASS business school research, which shows that employee-owned businesses perform as well as conventionally owned businesses and have outperformed them during the recession, and given that there is well established support already for supporting public limited companies, will the Government give special attention to trying to extend the support to private companies and, equally, notwithstanding what he has just said, spend more time trying to examine how we can develop employee involvement to a far greater extent in the public service than we have done hitherto?

My noble friend makes very valid suggestions and we will try to respond to what he is calling for. I certainly agree that the public sector potentially has much to learn from the way in which employee-owned companies run their businesses. The Government’s public service reform agenda focuses on building stronger relationships between citizens or customers and the professional front line. I am very glad to cite examples in the public sector of 390 members of the Reddish Vale co-operative trust taking ownership of their school and of staff at Leicester City primary care trust taking over general medical and substance misuse services for homeless people. There are other examples and we shall seek to encourage more such practice.

I apologise to the noble Lord, Lord Brooke. Perhaps I may seek to persuade the Secretary of State, after he has answered these three Questions, to stay a little longer in the Chamber to answer the debate later on the savage cuts in universities and FE funding, which will lead to 200,000 youngsters not going to university this year. This is his policy, which he has taken through Cabinet. Many Peers feel—

My Lords, I hear what the noble Lord is saying, but this is a Question to the Secretary of State on the subject on the Order Paper. But I understand.

But many of the companies which will be affected by this will also be affected by the cuts in the education Bill. All that I would ask the Secretary of State to do is to appreciate that many Peers feel that, as the Cabinet Minister responsible for this policy, he should not leave it to a junior Minister but should answer himself at the Dispatch Box to justify and explain the policy.

My Lords, normally, wild horses would not tear me away from the chance to respond to the noble Lord, Lord Baker, on these questions. But I am afraid that essential departmental business keeps me away from your Lordships' House this afternoon. However, I must say that I will not be as far away as my shadow, the noble Lord, Lord Hunt of Wirral, who I gather has gone all the way to New Zealand in order to avoid this opportunity.

No, I am sorry, but it is not. If we can come back to the Question on the Order Paper, it will come as no surprise to the noble Lord to realise that from these Benches we regard, under his control, an organisation that could classically benefit from an increase in employee-ownership—the Royal Mail.

I do not disagree in principle with what the noble Lord has said. We want to encourage the maximum involvement of employees in the Royal Mail in the much-needed and essential modernisation of the company and the technological and other changes that need to take place in order to transform the business and its finances. We will be, as ever, seeking to encourage precisely that.