My Lords, I have signed these amendments from the noble Lord, Lord Hodgson, and I agree with what he and the noble Lord, Lord Knight, have said. I am aware that the noble Lord, Lord Hodgson, has a long record of engagement in these matters, because from time to time I discover that I am following in his footsteps. The “good work” amendments recognise that we need structural changes in how companies operate to ensure that they provide good work in the face of technological and societal changes. With the financial services sector both supporting all businesses and being our largest industry, it has a special, strategic leadership role to play, and ways that this can be brought about are
contained in Amendments 108, 109 and 110. This would be in line with the principles of Section 3B(1)(c) of FSMA, which states that there is role for ensuring
“the desirability of sustainable growth in the economy of the United Kingdom in the medium or long term”.
In my book, sustainable growth must encompass technological and societal changes as well as the environment, but I fear there is a long way to go to live up to that.
In the interests of time, I shall concentrate on Amendment 122. There has been all-party support for employee share ownership in all its forms for a long time. Such schemes provide rewards and motivations in ways that wages cannot. At its best, an employee share plan will also give employees a say in how a business is run and can help to achieve many of the aims of the Good Work Charter, such as dignity, fair rewards, participation and learning.
Employee share ownership and employee ownership have many positive effects, and I want to highlight research on how well employee-owned companies deal with financial adversity.
Research published by the Cass Business School after the 2008 financial crisis established that employee-owned companies create jobs faster than non-employee-owned counterparts and withstood the recession better as it deepened. They recruited when non-employee-owned companies were laying off staff, and had motivation where others found it hard to motivate staff.
More recently, I chaired an inquiry into the effects of employee ownership and the report, entitled Ownership Dividend, found evidence that showed that employee-owned businesses performed better, were more resilient and more rooted in local economies—hence why the term “ownership dividend” was coined. Therefore, as has been said, such companies have a strong part to play in the UK’s plans to build back better and restart the economy.
Amendment 122 suggests an emphasis on analysing impact of sustainable growth provided by employees share schemes. As I mentioned previously, it should already be covered in the principles, but the urgency around “sustainable” in all its forms does not seem to be present. Therefore, I commend Amendment 122, as well as the good work amendment.