Bernard Ginns: Utopian vision to improve the workers’ lot just won’t work

EVER since a loud cough from someone nearby prevented the lawyer Thomas More from hearing the precise location of Utopia, politicians and business leaders have struggled to secure the best state in society.

In business terms, I wonder if it is possible to strike the perfect balance between staff, customers and shareholders.

It seems that someone, somewhere is always getting a bad deal, whether it is the lowly factory worker in the far reaches of the supply chain, the customer who is mis-sold an inappropriate product or an investor who sees his returns diminish year on year.

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It seems an inevitable part of commerce, although stakeholders can and do rise up and demand change.

When this happens, it presents enormous challenges for the people at the top trying to hold everything together and for the integrity of the system as a whole.

The Smith Institute, a left-leaning think tank, yesterday launched a new independent inquiry into working life in Britain and said a new deal at work must be a top priority for the 2015 election manifestos.

The inquiry will look at how the recovery can better reward employees and improve the world of work, a business imperative if you believe that employee commitment is essential to improve productivity.

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At the outset, the institute claims that Britain lags other countries in terms of pay and productivity.

Average wages have fallen in real terms while pay at the top has increased; more than half of all households in poverty have at least one person in work; five million workers are paid below the living wage; 11 per cent of employees work more than 48 hours a week; many workplaces are characterised by stress and uncertainty and many workers appear overqualified for their roles.

The inquiry will look at what Government, employers, employees and unions can do to improve working life in Britain and ask how the nation can aspire to a high-skills, high-productivity, high-wage economy where more people are satisfied with their work and have greater opportunities and more control over what they do.

Ed Sweeney, chairman of the inquiry, said: “Sustainable growth can only be built on better work, including fairer pay, more secure jobs, greater employee voice, more opportunities for improving skills and careers and a better work-life balance.”

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He is right, of course, but his vision is Utopian and unachievable. Unlike the fabled island of Utopia described by More in the 16th century, Britain now operates in a complex and inter-linked global economy with vast structural and cyclical changes afoot, not least the seismic shift of economic power from West to East and a still fragile global financial system and continuing questions over the health of certain sovereign states.

Britain needs its businesses to be nimble and responsive to the enormous technological changes being wrought by the digital revolution. Simply demanding better rights for workers will risk plunging this nation into the abyss, not generate economic prosperity for future generations.

A big part of the answer lies in encouraging more new businesses into the economy. The best companies today, the ones that strike the best balance between the competing demands of staff, customers and shareholders, were once kitchen-table start-ups and we need more of these to secure our future.

To that end, London and the South East are leading the charge with by far the largest number of new businesses established in 2013, according to StartUp Britain.

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Birmingham is the top-performing city outside of the South East and Manchester is the entrepreneurial hotspot of the North. High levels of new businesses were recorded in South Yorkshire, the Midlands and Scotland. Leeds was 13th, unluckily for some.

Over in Sheffield, the city council finds itself on the horns of a dilemma.

Ikea, the world’s largest retailer, wants to develop a £60m store near Meadowhall. It has faced objections from both Meadowhall’s owners over traffic congestion and retailer John Lewis over the impact on the city centre.

The council, which failed to prevent an out-of-town retail scheme from Next, is expected to issue its planning recommendation soon. It won’t be able to keep everyone happy.