A high-powered government commission has called for a sweeping transformation of Britain's sluggish industry by giving workers new and unprecedential power.
It proposes that boards of large companies be divided equally between union and management directors, compelling executives to share decision-making with labor representatives.
The document, to be made public Wednesday, goes even further than existing worker participation plans in Sweden or West Germany. It was drawn up by academics under the chairmanship of Alan Bullock, the distinguished Oxford historian.
Three industry members on the panel strongly denounced the findings. Even before its publication here, top management in Britain has launched a bitter campaign against what it regards as a union grab for power.
The Bullock report is virtually certain to touch off a major debate that could last for years and influence industrial practice everywhere in the west, including the role of unions in the United States. There would be an immediate impact on a number of subsidiaries of U.S. and other foreign multinationals here.
Its appearance now poses a harsh dilemma for the Labor government that ordered it. The study is the culminating project for Jack Jones, a Bullock committee member, chief of the giant Transport Workers Union and the most important labor leader in Britain. The government's hope of maintaining its crucial curb on wage demands rests largely with Jones.
On the other hand, Prime Minister James Callaghan's plan to revive Britain's stagnant economy depends on industry's will to invest and export. Powerful sections of his cautious government, particularly in the Treasury, would like to bury the document and avoid inflaming business.
This split vision leaves in doubt how strenously Callaghan will seek the legislation needed to carry out the Bullock plan.
One measure of the passion the proposal has already aroused is reflected in a weekend speech by John Methven, director general of the Confederation of British Industry, the voice of large corporations here. He warned: "Unless this report is challenged and discredited the corporate face of Britain will be changed irrevocably and the trade unions will control even more peaks of the economy.
"The report is not about participation: it is about political power and nothing else. There is no other single item facing business more important than this."
The Bullock document, which says it will give a fresh legitimacy to management decisions over everything from investment in new machines to the closing of the plant, does not disguise its political nature. It calls its plan for industrial democracy a modern equivalent of the 19th century reform acts that gave Britain universal suffrage.
If adopted, unions and stockholders would each pick the same number of company directors. These groups would then agree on an odd number of outside directors to break any deadlock. This would give worker representatives an equal voice management in approving five-year financial plans, making investment budgets, deciding on mergers or takeovers, determining whether to shift to new products and new technologies - all the key decisions of a modern corporation. If the two sides could not agree on the outside representatives, a government commission would select them.
Unlike boards in most American companies, directors here matter greatly. Nearly all British boards are made up of senior managers with only a few outsiders for window dressing. In contrast, the majority on U.S. boards are typically drawn from eminent figures outside the corporation, and the board is largely a rubber-stamp device for self-perpetuating managers.
Britain's corporate managers, like the trade unions here, have been blamed repeatedly for the nation's indifferent economic performance. The Bullock committee aims to change this drastically.
The report says:
"(There is) urgent need for British industry to be more responsive to change if there is to be any hope of reversing the relative decline of the country's industrial performance . . . Employees through their trade unions have a positive role to play in combating industrial stagnation and in stimulating much needed changes in industrial structure and performance."
Britain must release the "energies and skill" of its workers, the report argues, by "putting the relationship of capital and labor on to a new basis which will involve not just management but the whole workforce in sharing responsibility for the success and profitability of the enterprise."
The commission's three industry members, however, bitterly dissented. Union board members, they said, would create conflict, dampen management initiative, put untrained directors in control and deprive nonunion workers of any voice.
If corporations must go this route, the industry members said, they should adopt the West German system and put worker members on a "supervisory" board with sharply limited power over managers. Even then, the blue-collar forces should be held to one director in nine.
The Bullock committee was set up in 1975, largely at the urging of Jones, a union chief regarded by many Britons ad the single most powerful man in the country. The commission looked at other European nations with worker directors and was evidently impressed. It observed that the plan has been most developed in West Germany and Sweden, among the most successful industrial countries.
Both, however, provide a more restricted version of the Bullock plan. In Sweden, worker directors are a minority of the board. In West Germany, they are equal in number but real power lies with a second management board on which workers do not sit.
Bullock contends that Britain is a special case and not only because of its unhappier industrial record. Industry is far more concentrated here than elsewhere in the West. Fewer companies control a greater share of output and management decisions are even more remote from the workers and communities they affect.
Shareholders, the commission says, are not entitled to unique control. In the modern world, they are largely passive. Professional managers make all the decisions with little interference until disaster strikes. In any event, the report asserts, major decisions about installing new machines or closing plants can no longer be made in Britain without the assent of unions.
It is against his background. It would limit the worker role to companies employing 2,000 or more. That would cover 738 corporations, including 100 subsidiaries of U.S. and other foreign multi-nationals. They employ about 7 million workers.