CAPITAL AND LABOUR.

Waikato Times, Volume 97, Issue 15274, 26 June 1923, Page 7

CAPITAL AND LABOUR.

COMPANIES AND CO-PARTNERSHIP BRITISH EMPOWERING MEASURE. INTRODUCED TO PARLIAMENT. In the British House of Commons on April 17, Mr Basil E. Pcto, M.P., moved for leave to bring in a Bill to promote the more general adoption of co-partnership between Capital a.i'l Labour by statutory and other companies. Speaking to his motion Mr Fell said: —"I avoid laying down any standard scheme. I avoid anything of the nature of compulsion. I proceed, in Clause 1, to set up a body of live persons who are to be calle 1 Industrial Co-partnership Commissioners, and the Clause further provides for the payment of salaries and expenses by fees approved of by the Ghancidor of tho Exchequer, so that, therefore, no burden is imposed on the national finances. I would call the attention of hon. members to the method of nominating these commissioners. One would be nominated by the Trade Union Council, one by the Federation of Employers in British Industries, one by tiie Labour Co-partnership Association, one by the President of tho Board of Trade for the time being, and one, who would bo chairman, by the Chancellor of the Exchequer for the time being. In Clause 2, I provide that the company or companies in question may refer, schemes for the division of profits between capital and labour to these Commissioners, and I would ask the permission of the House to read one or two provisions of that clause. Sub-section (1) provides that such companies may make provision, by a scheme to be submitted to the Commissioners, for tiie division of profits between capital and labour employed by those companies, in such ratio, at such times, and in such manner in all respects as the Commissioners may approve. tfffi Sub-scction (2) it is laid down that every such scheme shall provide for payment to all employees of the company, in addition to any share in profits, of wages at rates not being' less than the rates commonly paid in the district where the company carries on its business; for the fixing of a basic rate of interest on capital which shall bear relation to the risks involved in the business; for tho investment of some part, being not less than one-half, of tho employees’ bonus in tho capital of the company; and that the employees’ bonus, whether paid in cash nr in stock or shares of the company, will not be liable io forfeiture for any legal act or omission of the employee. Sub-section (2) provides that, in deciding whether or not they will approve of such a scheme under this clause, the Commissioners shall be entitled to take into consideration whether the employees who are to work under the scheme have been consulted with regard to it, and have approved of it. The next sub-section provides for the affixing of a certificate, much in tho same manner as the Registrar of Friendly Societies certifies a friendly society. The only oLhcr sub-section of this clause to which I shall refer is one which states exactly to what sort of companies the Bill will apply. The Bill is to apply to companies engaged in production, and is not to apply to any banking, finance, insurance,, or investment company, or to any other company which for the main .purpose of its undertaking employs only clerical labour, or to any company engaged in wholesale or retail distribution. •• “I now come to Clause 3, which provides the inducement or the method by which I hope much greater advantage will be taken of the system of co-partnership. The clause provides that a company'which puts before these Commissioners a scheme which is approved and certified will ho assessed to and charged with income tax-at. three-fourths of the ordinary rate,, and that it will be charged for stamp duty on the issue of capital at one-half the ordinary rate of stamp duty. Clause 4 provides that, after the lapse of a year from the passing of the measure, a preference shall be given, in the placing of Government contracts and tiie contracts of local authorities, to firms and companies who have adopted such a scheme. Clause 5 only provides for the machinery of the daily work of the Commission, and, further, that the Commission shall make an annual report, to be laid before Parliament, and that practically all that they do shall be subject to tiie approval of the Chancellor of tho Exchequer. “It would be impossible now to place before the House any detailed argument in' favour of co-partnership, hut I should like to put before the House, in a few words, what I am convinced are the main advantages of copartnership. It lessens strife and cheapens the cost of production of all commodities. It does that by lessening the burden of supervision, lessening the waste of material, and bringing the united brain of management and labour to bear upon tiie problems of production, and so improving the processes and their application to nroduction. I am convinced that it would increase our power to sell in foreign markets, that it would thus increase employment and give to wage-earners a human interest in life and in their work, and would raise their status to an absolute equality in every respect with every other class in the country. From this, as 1 hold, it would follow that it must increase the profits of industries throughout the country when they are equitably divided between all who work in those industries and that, therefore, the revenue derivable from direct taxation would be increased. If any lion, members think the inducement I offer of a rebate ol' one-fourth of the current rale of income tax is 100 much, I would remind them that an increase in profits to the extent of only one-third would result in three-fourths of the present income tax equalling the total which is now. collected, and, therefore, I would ask for sympathetic consideration of these proposals by members in all parties in the House, on the ground that I am asking permission to introduce a Bill which is an honest effort to contribute to industrial peace and the prosperity and welfare of the country.

The Opposition. Mr A. Hopkinson: “ I rise to oppose the Bill. While doing full justice to the admirable motives ol' Idle mover and of those who support it. I should like, from painful experience, to point to one or two dangers which are bound to arise if a Bill of this sort becomes law', in the first instance, the advantages to the workers to be obtained by co-partnership have, I am afraid, been much exaggerated. After all, it is not desirable that tile weekly wageearner should invest his small savings in the same business concern from which lie draws his I have come up against that problem myself already. If, through any mistake on my part, my business were to go down and become bankrupt, it is quite certain, it I liad as co-partners llmse whom 1 employ for wages, they w'ould not only lose their employment and weekly wages, but they would lose

their savings as well. In fact, the danger has impressed me so much that I have coinc to tho conclusion that the only proper way in which to invest such portions of their profits as they wish to invest yearly is to form some sort of investment trust, by which, owing to his greater knowledge of share markets and matters of that sort, the employer may be able to obtain for his employees a better return on their savings in safer investments than they can do" for themselves. This BUI puts forward a form of reform at tho public expense, and it docs not provide against one very great danger. It is perfectly easy for a producing'o r manufacturing company to sell the greater part of its output to an ad hoc selling company. Therefore, the advantage which would accrue from the reduced taxation owing to the co-partnership scheme would accrue really to the same individuals through the formation of a special selling company. It is a little complicated, because I do not know the exact wording of tho Bill and what safeguards havo been put to prevent it. Under the working of the modern joint stock company system, it is possible to avoid making a large profit in a manufacturing company and to get a very large profit for the same individual by means of a selling company which takes over tho output of that factory at low prices and retails it at high prices. Therefore, although, as I say, I recognise most fully tho excellent motives behind this Bill, I hope that this House will not give it a second reading. It has not been thoroughly considered. . It has evidently been drafted by people who have taken up with enthusiasm a new thing or- which they had not had actual practical experience, and to my mind the dangers—and I hope the House will agree with me—are very much greater than the benefits which it cun possibly give. The Bill was read a first time.