Page 6, 16th August 1963

16th August 1963
Page 6
Page 6, 16th August 1963 — Co-operative ideas in the Parties

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Co-operative ideas in the Parties

For nearly three-quarters of a century, Papal social teaching has urged the concept of industrial partnership and what may loosely be termed "co-operative ideas". Many vested interests have hindered their outright development in this country. But all of the three major parties have an eye to them to some extent, and may be competing in this field in their electoral programmes.

Book was published in 1928 and in their latest proposals advocate workers' representation on the boards of companies as under the German co-determination laws.

But the Liberals have not yet said anything about how the earnings of industry should he shared, and co-partnership schemes introduced on the initiative of the employer and withdrawable by him if they are not thought to be worthwhile are not quite the same thing as partnership.

The Liberals have repeatedly introduced amendments to the Finance Bill designed to encourage co-partnership schemes; but these have been invariably rejected by the Conservative Government on the not very convincing ground that the Royal Commission on Taxation did not think it wise to use tax concessions for social purposes.


But the government abolished Schedule A income tax in this year's budget against the advice of the Royal Commission and the Finance Bill also exempts co-operative housing societies from both income tax and profits tax. Mr. Du Cann's arguments on May 29 against using tax concessions for social purposes were therefore not very convincing.

Members of all three parties had urged that building and co-operative societies and other non-profit making organisations should be exempt from profits tax, and some also argued that building societies should he exempt from income tax too and that interest on co-operative shares should be exempt from income tax to the same extent as interest on P.O.S.B. deposits.

Mr. Du Cann rejected these suggestions: but the only real argument he could think of was that it would mean loss of revenue and that small concessions could lead to larger ones.

It is certainly true that changes of this kind could have far reaching consequences: and in the debate on the same issue five years ago Harold Wilson declared that there was "room in our tax system and in our financial system for a very big expansion of that kind of company organisation that rules out the equity element and the possibility of unearned capital gain."

That is to say, if companies paying but a limited return on capital,

like the John Lewis Partnership. were taxed at a lower rate than other companies. a very considerable number of companies might well find it worth while to reorganise themselves on a partnership basis.

This kind of theme has not appealed to the Conservative Government. even though Mr. Winston Churchill, as he then was, declared at the 1946 Conservative Conference that Conservatives "seek as far as possible to make the status of the wage earner that of a partner rather than that of an irresponsible employee".

Too many Conservatives are inclined to say that we already have partnership in industry because the more that is produced the more there will be to share.

But the need to produce an incomes policy applying to profits and dividends as well as to wages may induce the Conservatives to do some more thinking about ways of making partnership more than an electoral slogan.

Mr. Macmillan himself told us last April that the need for an incomes policy made it necessary to "accept great changes in the structure and organisation of industry'.

All three parties recognise the need to extend a greater measure of security of employment to wage earners, surely an essential clement in partnership.

All three parties also recognise the need for greater co-operation between management and workers and more effective system of joint consultation. And all three are in favour of the encouragement of co-operative housing.

It was appropriately enough the Co-operative Party that pioneered the principle of co-operative housing which has been spectacularly successful in some continental countries: and the same principle was adopted by the Liberals a year ago and by the government last May.


The arguments for and against socialism which colour the views of so many voters seem a little artificial when it is becoming increasingly clear that the Labour Party does not agree with the Conservatives that socialism means the nationalisation of all the means of production, distribution and exchange.

It is true that Harold Wilson reaffirmed the Labour Party's belief in Clause Four of its constitution last February; but people too often forget that Clause Four refers to "Common Ownership" and not to nationalisation precisely because the party was not agreed in 1918 that socialism meant the nationalisation of everything.

The Guild Socialists were influential at that time and the Co-operative Party had just been founded: and it is worth recalling that the word "socialism" originally meant social as distinct from individual ownership.

To Robert Owen and the Christian Socialists, to the pioneers of the trade union and co-operative movements. socialism had nothing to do with state ownership but simply meant co-operative production.

Robert Owen's work at New Lanark was based upon the co operative principle of a limited re'turn on capital. The John Lewis Partnership is based on the same principle and the late Mr. John Spcdan Lewis used to claim that it was an example of co-operative production.

If the Labour Party wants to convince voters that socialism does not mean the nationalisation of everything. it will hose to argue less about how many companies or industries should be nationalised by the next Labour Government and do a bit more thinking about what should happen to the part of industry that is not nationalised.

It will be helped in this by the need. as M. Callaghan recognised last October and as Mr. Wilson told the Transport Workers in July. to devise an incomes policy apply ing to profits and dividends as well as to wages.

This would appear to call for some form of partnership in industry, to measures that would limit the return as well as the liability of the shareholder and make company ownership itself a form of "Common Ownership".

Six years ago the Labour policy statement Industry and Society made some vague references to possible changes in company law; and as company law is supposed to be under review at the present time it might be expected that the Labour Party would be doing some thinking about possible changes. There was some thinking of this kind in the New Fabian Essays and by Mr. Callaghan at the 1950 Labour Party Conference.


As it calls itself a socialist party it might be expected that it would he doing some work on what the socialisation of the company would involve; and the only possible answer seems to be the incorporation of co-operative principles in company law.

This would not mean that companies should be run in exactly the same way as co-ops; but it would mean the "replacement of production for profit by production for use The odd thing is that the extension of co-operative principles in industry in this way would by likely to result in something very similar to what sonic Liberals mean by "Co-Ownership", to what some Consma at i ves mean by partnership. and to what some Catholics mean by modifying the wage contract by a contract of partnership.

It is nearly forty years since Chesterton said that the twentieth century might see a race to distribute as to the 19th saw a race to democratise. All three parties are already committed in principle to the distribution of property—and to devising an incomes policy which will apply to profits and dividends as well as to wages.

It may be that the parties will be competing, riot only in offering more houses and higher pensions. but also in offering an industrial system based on a wider application of co-operative principles.

Perhaps the argument will. in due course, be about which party is most likely to he successful in devising such a system and in controlling inflation; and about whether it should be called partnership or co-ownership or common ownership.

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