The Case for Shared Ownership: regional manufacturing

23 October 2019

In the fourth blog of our miniseries on shared ownership, our Director of Learning and Influence Genevieve Maitland Hudson looks at the UK and beyond and examines the opportunities regional manufacturing could hold for shared ownership business models.

As with both hospitality and care work, manufacturing is low on the UK’s list of median weekly earnings. All three are the occupations for which the lowest tenth percentile earnings in 2016 were lower than the 2017 National Living Wage.

These are the three sectors in which change in earning power could most dramatically contribute to economic advancement for the many people in the UK who, though employed, continue to live in poverty.

It is working age adults in low-wage employment who make up the biggest share of those in poverty. It is here, therefore, that changes in earning capacity and power could make the most significant impact on UK economic inequality.

Added to these macro trends are the micro trends in manufacturing instability. The UK’s manufacturing sector is largely controlled by foreign firms, whose long-term presence in British manufacturing centres is dependent on attractive economic terms, ease of trade and subsidy from central government: these are all under threat from Brexit. In October 2018, the IFS published a book chapter that focused on Brexit risks and found that men in manual jobs were the most at risk from a post-Brexit economic fallout due to changes in trade barriers with the EU.

So, would it be possible to merge the existing approaches within manufacturing with other economic models, and make a case for the establishment of new English manufacturing hubs with shared ownership models? Could we make an imaginative attempt to build on existing initiatives in cities, those representative groups advocating for worker rights such as SMart, Indycube and the Domestic Workers’ Alliance, and group models of cooperative manufacturing? This idea takes seriously the suggestions in the Labour Party’s industrial strategy on resurrecting British manufacturing, the ideas of Mariana Mazzucato on innovation, research and industrial development, and the example of Mondragòn.

Mondragon, a small town in the Basque region of Spain, plays host to the world’s largest and most advanced cooperative economy. The current state of the manufacturing industry in the UK are not wholly dissimilar to those which faced the pioneers of the first Mondragòn cooperatives.

Workers in Mondragòn were restricted in their access to jobs and in their capacity to affect wages, through the monopoly hold of one large manufacturer, Union Cerrajera. In the narrow Basque terms of the time, Union Cerrajera was almost as foreign as Nissan is to Sunderland. 64% of its stock was owned by 6 families, and these were not resident in Mondragòn itself. The particular mix of radical nationalism – which acted as a rampart against socialism and proletarian politics more generally – activist Catholicism with its roots in Catholic Action, and the peculiar pressures and restrictions of Franco’s dictatorship are not going to be resurrected in present day Redcar, but the exclusion of workers from decision-making, and their lack of power over their working lives, already are.

The Labour Party’s industrial strategy pinpoints certain manufacturing sectors as areas of potential growth and specialism for the UK. One of these is the manufacture of electric cars. The Conservative Government highlights the very same sector, though its approach is less rooted in factories and workers and has more of a focus in consumer access to vehicle charging infrastructure and hydrogen refuelling stations, and in tweaks to education and training.

The economic inequality of automotive manufacturing has cross-party recognition. The potential for profitability that could produce very tangible redistributive effects, in contrast to other low wage sectors in the UK economy: this seems like an area ripe for shared ownership experimentation. What shape this would take, how venture philanthropic investment could help to fuel that process, and the role existing workers and worker representative bodies could play would need intelligent exploration. The attempt, however, would have a scope and ambition out of all proportion to existing programmes for cooperative start-ups and conversions.

The question is: could the UK social sector rise to a challenge of this scale? 

Genevieve Maitland Hudson

Deputy Chief Executive Officer

Gen has spent the last ten years working with social programmes that are committed to the informed use of information and data to improve their work. She began her career in academia with a doctorate in politics and philosophy. She has lectured at Oxford University, Roehampton University, the Ecole Normale Supérieure in Paris, Birkbeck College London and Cambridge University.

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