Edition: November 2018/January 2019
President issues a challenge. Labour in SA must respond.
|Grow up, says Cyril|
An invitation to revolutionary participation or capitalist collaboration? Viewed from either extreme of the divide, the result is the same. It bridges the sides and breaks the stereotypes, portending a narrative that can shake corporates to their core.
The proviso is that “workers” get off their backsides in the manner that Ramaphosa has exhorted them. The initiative, on his formula, must come from them.
In the UK, by contrast, it will come from a Labour government. For better or worse, the prospect of it winning the next general election looks to be increasing as the Conservative Party tears itself to pieces over Brexit.
|Mashatile...route via pension funds|
As it happens, the Cosatu congress was being held in Johannesburg at much the same time that the Labour Party congress was under way in Liverpool. There is was stated by Labour leader Jeremy Corbyn that his party had plans for worker representation on company boards (presumably for government to decide who’s a “worker”).
John McDonnell, a fiery socialist and Labour’s shadow chancellor of the exchequer, went further. He promised that over a decade a Labour government would take 10% of shares (1% a year) from companies employing more than 250 people. These shares would be put into a specially-created fund that would make workers part-owners of their companies. Worker representatives will have voting rights, equivalent to shareholders, in companies’ decision-making processes.
Almost 11m workers – roughly 40% of the private-sector workforce -- would individually be given up to £500 a year from the “inclusive ownership fund” that each of the larger companies will be obliged to establish. Where there are further dividends for these workers, the amounts additional to the £500 annual cap will go into a national fund for public services and welfare.
Details of the scheme indicate that it’s effectively a new levy on private business worth an estimated £2,1bn a year. As such, it was immediately opposed by the Confederation of British Industry. The business lobby group warned that the plan would cause investment to flee the country and reduce the pay in people’s pockets.
McDonnell dismissed the criticism: “If you look at other countries like Germany, where there’s been much more worker involvement, it’s been the reverse.”
Labour is pushing from where the Conservatives left off. At the height of her popularity, when Theresa May became party leader and UK prime minister, she proposed broader representation by consumers and employees on company boards. But pressures from the CBI caused her backtrack (TT March-May ’17).
Between the Labour leaders in the UK and the labour leaders in SA, Ramaphosa’s most recent comments reignite an aspect that appears not to have been progressed within the ANC since it became policy of the party’s Gauteng provincial body. Paul Mashatile, then Gauteng ANC chairman and now the ANC treasurer-general, called for “radical economic transformation anchored on shareholder activism through pension funds” (TT Sept-Nov ’15).
His comments followed an address at the JSE, repeated at other fora including conferences hosted by the Batseta Council of Retirement Funds and the Association of Black Securities & Investment Professionals. A long time coming has been debate over the means, not the principle, of worker participation in boardrooms. Like Mashatile, TT has frequently suggested that the role of pension funds is central.
What’s new is the thrust given by Ramaphosa, underpinned in the UK, on the how.