YouTube video

The UK Labour Party has unveiled proposals for what it calls the “greatest extension of economic democratic rights that Britain has ever seen.” The plan includes transferring a portion of company shares to workers and giving them a third of seats on company boards, and expanding public ownership of water and other utilities. We speak to Leo Panitch, professor of political science at York University

Story Transcript

AARON MATE: It’s The Real News. I’m Aaron Mate.

The British Labour Party has unveiled proposals for what it calls the greatest extension of economic democratic rights that Britain has ever seen. Labour Finance Spokesperson John McDonnell addressed the party’s annual conference on Monday.

JOHN MCDONNELL: So in 2018, I tell you that at the heart of our program is the greatest extension of economic democratic rights that this country has ever seen, and it starts in the workplace. It’s undeniable now that the balance of power at work has been tipped against the worker. The result is long hours, low productivity, low pay, and the insecurity of zero hours contracts.

So I want you all to be certain. I want the country to be certain. We will redress the balance of power at work. First, we’ll be proud to fulfil our late leader’s promise, John Smith’s promise, that workers will have trade union rights from day one, whether in full time, part time, or temporary work. We will lift people out of poverty. We’ll lift them out of poverty by setting a real living wage of ten pounds an hour when we go back into government.

AARON MATE: The Labour Party’s plan also includes transferring a portion of company shares to workers, and giving them a third of seats on company boards.

JOHN MCDONNELL: We believe that workers who create the wealth of a company should share in its ownership, and yes, in the returns that it makes. Employee ownership increases a company’s productivity and encourages long-term decision making.

I can announce today we will legislate for large companies to transfer shares into an inclusive ownership fund. The shares will be held or managed collectively by the workers. The shareholders will give the workers the same rights as other shareholders, to have a say over the direction of their company. And yes, dividend payments will be made directly to the workers from the fund.

AARON MATE: Well, joining me to discuss the Labor Party conference and its bold new proposals is Leo Panitch. He is a professor of political science at York University, and author of The Making of Global Capitalism.

Professor Panitch, welcome. You were there at this conference. Talk about what we just heard from John McDonnell unveiling what he calls the greatest extension of economic democratic rights that Britain has ever seen.

LEO PANITCH: Well, it would be, if in fact they’re able to see it through. What he announced today was at one level not surprising, but the determination and commitment with which he went to these proposals was. You know, what he said was we are going to inherit a mess whether that involves inheriting it after Brexit or before Brexit. And whereas radical governments usually use inheriting a mess as an excuse not to see through what their commitments were, we are going to use that mess as the basis for redoubling our efforts to see it through.

So what he essentially said was that the commitment to bring the public utilities, rail, water, electricity, the post office, back into the public domain- they used to be publicly owned before they were privatized under Thatcherism and neoliberal globalization- and he particularly focused in this case on water. So he then went beyond that to say in addition to that, and he explicitly cited the 1918 Labour Party Constitution’s Clause 4, which the Blair leadership of the party had gotten rid of, which is the commitment to the common ownership of production, distribution, and exchange under the best form of popular administration. And he said unlike the previous nationalized industries, these will now be democratically run as possible. And he talked about the way in which councils would be set up in the water sector made up of local community representatives and worker’s representatives to be a supervisory council over the managers in the nationalized water industry.

AARON MATE: Leo, let’s go to that clip of John McDonnell talking about national ownership of public utilities, including water.

JOHN MCDONNELL: You know, you know now with [priority] we’re going to extend economic democracy even further in this country. How? By bringing water, energy, Royal Mail, rail back into public ownership again.

It has proved its popularity in opinion poll after opinion poll. It’s not surprising, is it? Look at the scandal over the privatisation of water. Water bills have risen 40 percent in real terms since privatization. 18 billion pounds has been paid out in dividends. Water companies receive more in tax credits than they actually pay in tax. And each day enough water to meet the needs of 20 million people is lost due to leakages. With figures like that, we can’t afford not to take it back into public ownership.

AARON MATE: That is John McDonnell speaking at the British Labour Party’s conference today. Leo Panitch, let’s say Labour takes power and they try to implement this plan. What sort of forces and obstacles will they face?

LEO PANITCH: Well, they could face great ones; above all, of course, from the powerful City of London, which is the Wall Street of Britain and in some ways even more central to the financialized global capitalism that is Wall Street, not least because so many American banks operate here in terms of history of derivatives and exchange rates and capital markets and so on. They could. One gets the sense that the British bourgeoisie and foreign bourgeoisies have resigned themselves to all this being brought back into public ownership. And insofar as it’s going to involve the issuing of bonds and finance buying the bonds to allow for the compensation that that will be involved in taking them back into public ownership, I think that McDonnell has got the commitment from them to say, yeah, we’re pretty sure we’ll be able to float those bonds and sell those bonds.

So I think on this front there’s not going to be much opposition even from capital. It’s when you move to the other dimensions of what Labour is proposing, which is to try to get finance more generally to be investing not in property but in productive industries, then I think you’ll get more resistance. And the other great thing he pointed to in his speech as part of their the program they’re going to implement is that for firms of over 250 people, up to 10 per cent of the stock of those firms would go into a employee fund. And the dividends of that stock would be passed over to the workers, up to 500 pounds a year. Anything above that by way of the dividends paid out would go to the Treasury as a social fund for meeting the needs of British people; British communities more generally. That has already produced a lot of squawking from the Confederation of British industry.

AARON MATE: As has a proposal to give workers, I believe, a third of seats on company boards.

LEO PANITCH: Well, in addition to that. In addition to the stock ownership. They are proposing that workers would have seats on company boards. Yes. And it’s already been said that that would lead to capital leaving Britain, et cetera, et cetera. You know, this can be radical, but it may not be radical. It could lead to the representatives of workers on these boards making alliances with the managers in these corporations of a kind that is narrower, particularist, and self-serving to that particular firm rather than- and the workers then get caught up in the competitiveness of that firm the stock prices of that firm, et cetera. It’s hardly the same thing as the common ownership of the means of production to have workers sitting on private company boards, or even for workers funds to be owning 10 percent of the shares and getting the dividends from it.

Nevertheless, insofar as one sees that as a more general socialization of the economy, and one can’t do it all in one go, insofar as workers are encouraged to develop the capacities, are given the means of developing the correct capacities of, indeed, making the decisions with regard to what’s produced, where it’s produced, what’s invested, where it’s invested, and the very terms in which McDonnell was speaking more generally, then of course this is a step in the right direction. If that really scares British capital or foreign capital, then the question arises, will they have to introduce capital controls? And ultimately, would they have to bring the whole financial sector into the public sphere as a public utility like the others? You could very well say that finance is not just metaphorically, but more than that, the water, the liquid that is the basis of any economy.

AARON MATE: It’ll be interesting to see if Corbyn and the Labour party take power just how far they’re able to go with these proposals. Let me ask you, though, speaking of the issue of financialization and issues of the far right and backlash to neoliberal globalization about Brexit, because there’s been some anger among some Labour Party activists today with the party leadership, basically rejecting calls for a second referendum that would include an option to remain; essentially to redo the Brexit vote over. Labour Party leadership says any second referendum could only be about the terms of the exit. Can you talk about that division in the party that was on display today?

LEO PANITCH: Yeah. I think that the mainstream media and those elements in Britain that in the Labour Party whose main priority is to stay in a capitalist Europe, and who aren’t at all interested in this transition into socialism that the Corbyn leadership represents. And they try to spin it that the vast majority of the membership, and even the vast majority of the young Momentum membership, that their main priority is to stay in a capitalist Europe. That’s not the case by any means. If you asked most Labour Party members and delegates at this conference, and Momentum, the members of which there are now 50,000, you gave them the choice between a socialist Britain and a capitalist Europe, they would choose a socialist Britain. Whereas the people who are leading the campaign to stay in Europe are not at all interested in a socialist Britain; in fact, think it’s romantic nonsense at best.

So you get from the mainstream media this very great distortion. What the Corbyn leadership has said is that we want a general election. We want a general election not least because we are the kind of government that could secure the kind of arrangement in Europe that would be a progressive one, without necessarily having to be inside the EU; one in which they would accept the single market, they would accept a progressive stand on immigration rather than a reactionary one, et cetera. They are at the same time saying we are not prepared to say at this point that we would take a referendum off the table. We’re not sure yet whether we want to endorse a referendum that the Tories would have the power to put the question, and that question would be one we wouldn’t put. And especially insofar it would be a question that would implicitly excite the kinds of racist, xenophobic temperature that the initial Brexit vote was based on.

You know, I’m a great critic of the European Union. But I would have voted to remain, because the Brexit campaign was being led by a xenophobic right. And when I made the point about capital being afraid, to some extent, of the Trumps of this world, it’s partly the mess that the British right has led capital into with the Brexit campaign that I was thinking of in terms of why they might give a little bit more space for a period to a Corbyn government.

AARON MATE: Leo Panitch, professor of political science at York University, author of The Making of Global Capitalism, thank you.

LEO PANITCH: Happy to talk to you, Aaron.

AARON MATE: And thank you for joining us on The Real News.

Creative Commons License

Republish our articles for free, online or in print, under a Creative Commons license.