A new Bill to make it easier for employees to set up their own co-operatives is to be put before Parliament in a bid to make the UK economy more “fair and worthwhile”.
In a speech in London yesterday, the Prime Minister said that employee-owned organisations already provided the country with nearly £1 billion-worth of health services and the model could be used to transform business by giving workers a “greater sense of ownership in what they’re doing”.
But there were currently “too many barriers” to going down this route and so the aim of the new Co-operatives Bill was to simplify and streamline more than a dozen pieces of existing legislation into a single statute.
The model being proposed is scheduled to be put before Parliament before the next election and is based on two principles that had been “at the centre of Conservative thinking for centuries”, he added.
“The first is a vision of social responsibility, which recognises that people are not just atomised individuals, and that companies have obligations too,” David Cameron said. “And the second is a genuinely popular capitalism, which allows everyone to share in the success of the market.”
He believed that “open markets and free enterprise can actually promote morality”, when they worked properly, by creating a “direct link between contribution and reward, between effort and outcome”.
As a result, the current “crisis of capitalism” should be used “to improve markets, not undermine them, because I believe that, out of adversity, we can build a better economy, one that is truly fair and worthwhile”, Cameron added.
Stark contrast
His statement echoes a speech made by the Deputy Prime Minister Nick Clegg on Monday when he described employee ownership as a “hugely underused tool in unlocking growth” and one that could help to usher in a new era of “responsible capitalism”.
But the Prime Minister’s speech, which he also used to condemn the City’s “out of control” bonus culture, came as reports suggested that taxpayer-owned bank, the Royal Bank of Scotland, may pay a bonus of more than £1 million to its chief executive, Stephen Hester, on top of his £1.2 million salary – although chairman Sir Philip Hampton dismissed the claims as “inaccurate and premature”.
Any such move by the bank would stand in stark contrast to a report just published by the Fair Pay Network, however, which claimed that the UK’s four largest supermarket chains were paying their hundreds of thousands of employees “poverty” wages, while making huge profits and boosting executive salaries.
The study undertaken by the coalition of charities and non-governmental organisations attested that workers at Tesco, Sainsburys, Asda and Morrisons were not paid the ‘living wage’. The Greater London Authority has deemed that non-binding rates of £8.30 per hour for Londoners and £7.20 for those living outside of the capital are necessary to ensure a basic standard of living.
But the Network’s report estimates that supermarket employees are paid an average of £6.83 per hour and only one in seven receives a living wage.
Mark Donne, one of the Network’s directors, told the Independent: “This report demonstrates the chronic unfairness and inequality within these retailing giants and the contradictory message of the Coalition Government, which in one breath says ‘work must pay’ and with the next act encourages greater recruitment by poverty pay employers.”
But the retailers criticised the report, arguing that it was based on interviews with only 100 staff out of their combined total of 893,126 workers. They also pointed out that their employees also received performance-related bonuses and store discount cards on top of their basic salaries.
