Third, as I have said for a long time, this is the wrong approach. Companies worth saving do not need loans now. They need equity. That is what the government should be supplying. Take stakes of not less than 25.1% to have some control. Appoint directors, including one from the workforce. Require real business plans, and monitoring. Hold the stakes in a National Wealth Service. Build for the future, and give the votes of confidence that equity provides rather than the kisses of death that extra debt burdens create in the corporate sector.
The trouble is, of course, that the Tories and the Treasury are a lethal combination. Neither understand business. And it’s showing.
Government ownership – and direction, that’s what the 25.1% is for – of swathes of the economy has been shown not to work well.
Which is why people don’t want to do it.
Of course, there’s another criticism of the idea possible. Snippa insists that neither the Tories nor the Treasury understand business. Yet he wants the Tories and the Treasury – for it will be them for a few years at least – to be directing all those businesses. Not going to work out well, is it?
Require real business plans, and monitoring.
Other investors tend to skip that bit cos it’s so boring.
It’s the requirement for an army of clued up public sector workers who would be serving as directors that makes me laugh.
If such a mad scheme were imposed, I’d get together with other companies and make sure we all had directors’ meetings on the 1st of every month.
“Amazingly, Some People Have Thought About This”
No they haven’t If they had *thought* about it, they’d realise how utterly insane it is.
“Appoint directors, including one from the workforce.”
So govt gets a seat on the board because it’s ponied up actual cash for equity. How about we do the same for the workforce?
Also, make it absolutely clear that the appointees from the workforce and public sector get all the penalties of being struck off, being *personally* liable then watch the roaches scuttle for cover…
Even better, if the workforce rep is actually a union rep, then go for a parent “company” guarantee as well. You could even say that if the rep gets struck off as a director, so does the organisation. That would be fun.
Andrew C
It’s the requirement for an army of
clued upclueless public sector workers who would be serving as directors that makes me laugh.There, FIFY
I believe Professor Schwab is also very keen on this idea. Along the lines of “all your everything are belong to us”.
@ The Pedant-General
Brilliant!
Every Trade Union which has a member as a “worker-director” should register as a “person having significant influence” *and* consolidate in its annual accounts, the accounts of all its “associate companies”.
Asking for a “parent company guarantee” would make the Trade Union liable for the unpaid debts of all the companies that its directors steer into bankruptcy. Any union which actually went bankrupt itself as a result would doubtless phoenix under a nearly-but-not-quite-identical name but its donations to the Labour Party would suffer a severe hiccup. I can, therefore, see the Labour majority in the House of Lords blocking this …
Each worker-director who was jointly and severally responsible for paying workers more than they earned would be criminally liable for conducting business to the detriment of its creditors.
National Wealth Service
Excellent. I can only hope that it mirrors the success of our NHS.
This National Wealth service – will it be the “envy of the world” and will we be required to stand on our doorsteps and clap for it each week?
If the workers want to pool sufficient money and buy up a chunk of the company, go ahead, it’s their money. In exactly the same way that I and millions of others pool our money and buy up chunks of FTSE companies through our pensions.
The Swedes under Olof Palme tried this. They quickly backed off big time.
Um, a director to be appointed from the workforce. That would be a working class person then, probably a Tory voter if over 30, not one of the academic class or the dependency class who vote for the supposed compassionate lot. Personally I’d insist on the working class board member being from one of the former communist countries who still has parents who remember.
Bongo
Worse than that – such an employee *may* even have a desire for commercial success for his employer…