Asked by Baroness Prosser To ask Her Majesty’s
Government what is their strategy to ensure that managers and
employees are fully engaged and able to deliver the Industrial
Strategy. The Parliamentary Under-Secretary of State,
Department for Business, Energy and Industrial Strategy (Lord Prior
of Brampton)...Request free trial
Asked by
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The Parliamentary Under-Secretary of State, Department for
Business, Energy and Industrial Strategy (Lord Prior of
Brampton) (Con)
My Lords, we have published a Green Paper that invites people
and organisations across the country to contribute to our
industrial strategy. The Government are also committed to
strengthening the worker voice in the boardroom. The Green
Paper on corporate governance reform explores a range of
options, and the Government will publish their response in
due course after analysing responses they have received.
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(Lab)
I thank the Minister for that response. The 10 pillars of the
industrial strategy cover the processes required to establish
the structure against which the strategy’s progress will be
measured. There is, however, no mention of the human
interaction needed to successfully implement those processes.
There is a well-established link between employee engagement
and productivity, which in this country lags behind that of
France, Germany and the United States. What is the
Government’s plan to ensure that companies have in place
appropriate training for all levels of management, so that
inclusion and employee voice are present, and the effective
delivery of the industrial strategy can be measured. I note
that the noble Lord mentioned workers on boards—a policy that
we support, but which does not deal with employee voice at
all levels of a company.
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My Lords, the noble Baroness is absolutely right. The link
between employee engagement and performance, however you
measure it, whether in productivity or quality, is proven, so
engagement is extremely important. However, I do not believe
that just having someone on the board of a company is
necessarily the right way of getting that engagement, as the
noble Baroness mentioned. Engagement is much deeper than
that. It is predominantly the responsibility of individual
companies to tackle this. You can see the resulting
performance when they get it right.
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(CB)
My Lords, I have just come from a meeting of the Institution
of Engineering and Technology at which it launched its report
Skills and Demand in Industry. The one thing it pointed out
to everybody was that only 9% of technology and engineering
staff are women, yet 15% of them graduate from our
engineering schools and in my own university of Cambridge the
figure is over 20%. What are the Government doing to ensure
that more women become engineers in industry and participate
in it, especially through the apprentice route?
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It is interesting that only 15% of women graduate in this
subject. In the case of medicine, for example, the figure is
now well over 50% and is nearly 60%. It is a very good
question. Interestingly, I went to Rolls-Royce last week and
met a number of apprentices there, some of whom are doing
degree-level apprenticeships. That may be one way of
increasing the number of women going into this area. It has
been a problem for many years and we are only in the
foothills of cracking it.
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(LD)
My Lords, does the Minister agree that share ownership can
provide the motivation to help employees and managers deliver
for their companies and, of course, deliver the industrial
strategy? If he does, what more can the Government do to
promote such share ownership?
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Share ownership can be a part of this but engagement of
people in their workplace goes much deeper and is much more
of a day-to-day issue than share ownership or board directors
and the like. John Lewis and the mutuals have demonstrated
the value of mutuality and ownership, so this does have a
part to play. However, it is only part of a much bigger
picture.
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(Con)
My Lords, I declare my interest as chairman of a public
company. Will my noble friend look at the widespread practice
among fund managers and large shareholders of contracting out
their responsibilities for corporate governance to outside
organisations, and encourage them to engage directly with
companies involved in the matters which concern the
Government, such as executive pay and other matters?
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The noble Lord may have seen the letter that BlackRock sent
round to all FTSE 100 companies in which it talked very
strongly about the need for long-term sustainable
improvements when considering remuneration. I was pretty
staggered to see that between 1998 and 2015 the average
take-home pay of a FTSE 100 chief executive has gone up from
£1 million to over £4 million. In 1998, that represented 47
times the average salary of an employee, now it is over 128
times. Remuneration is a very serious issue and if we want to
live in a fair society, we need to address it.
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(Lab)
My Lords, will the Minister have a look at a Private Member’s
Bill that was introduced here twice previously by the now
deceased , who was very
prescient in seeing the difficulties arising from the growth
in the salary gap between CEOs and their employees? That Bill
was supported by noble Lords all around the House. It would
be well worth the Minister’s while to look at it. He
mentioned that he does not want the Government to interfere
in the deals between employers and employees in the private
sector. However, the Government have responsibility in a very
substantial part of the country’s employment—namely, in the
public service. What are the strategy and targets for
improving productivity in the public service?
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The noble Lord makes a very good point. Industrial relations,
employee engagement—call it what you will—is much better by
and large in the private sector than in the public sector. We
are not good employers, if we are honest. Like me, a number
of noble Lords in this House were staggered that the junior
doctors, for example, were forced into taking strike action.
These people are vocationally committed, yet somehow we
created an environment in the public sector which is far from
satisfactory.
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(Lab)
My Lords, will the Minister, on behalf of the Government,
have a word with the Speaker, the Senior Deputy Speaker and
the Clerk of the Parliaments and ask them to consider how the
employees of this place might be involved more in decisions
regarding its running?
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My Lords, a number of our leading companies have very
innovative ways of engaging people in their business—for
example, Google and other companies like it have installed
table tennis tables. I wonder whether the noble Lord,
, might consider making
way for a table tennis table in this place.
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(Con)
My Lords, does my noble friend concede that turning earners
into owners and expanding employee share ownership in various
forms can, in certain circumstances, be immensely beneficial
and a great promotion for industrial competitiveness and
effectiveness? Will he bear in mind particularly the case of
the National Freight Corporation where a major share
ownership by all employees had an enormous effect in
improving productivity? It was a project carried forward with
great vigour by no less a person than the noble Lord,
—now the Lord Speaker
of this House—and me, as successive Secretaries of State for
Transport in the 1980s.
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I agree with my noble friend that employee ownership can be
very beneficial—the mutual is another model that can be
beneficial—but it does not guarantee success. There are many
other aspects of corporate life that are very important. The
Co-operative Bank is an example of an organisation that has
not been a conspicuous success in recent years. It can be
very important but it is not the whole answer.
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