Because 10 days ago Labour leader Tony Blair launched it as his Big Idea. Addressing businessmen in Singapore, he said: "The economics of the centre and centre left today should be geared to the creation of the stakeholder economy, which involves all our people, not a privileged few."
Labour's spin doctors announced that stakeholding would be the theme for the general election campaign. Conservative Central Office launched a counter-attack. Last night in Derby, Blair made another speech about it, and further announcements are planned in coming months.
Q. So what does it mean?
That's the problem; no one is quite sure.
Q. Well, Blair must be clear about it.
He says so, but most people are still puzzled. Blair said it was a unifying theme for Labour policies, many of them already well known. Gordon Brown, the Shadow Chancellor, says it's about giving people opportunities to work and to get training. Majorie Mowlam, Labour's Northern Ireland spokeswoman, said stakeholding just meant an economy based around "people".
Q It sounds very vague. Is there any meat?
Yes. There are lots of specific ideas and policies about the economy, the way that companies run, the way the welfare state operates and our role as citizens and consumers. All these ideas can lay claim to the term "stakeholding".
Q. Where did it all start?
The Oxford English Dictionary doesn't shed much light on the origins of stakeholding. It describes a stakeholder as a bookmaker - "an independent party with whom each of those who makes a wager deposits the money". A more evocative image of a stakeholder is one of the brave New World settlers, staking out their territory and building new lives. Having a stake means owning something and being able to decide what to do with it.
The term has become fashionable recently partly because the term "stakeholder capitalism" was popularised by Will Hutton, the Guardian's assistant editor, in his best-selling book The State We're In. Other exponents of similar ideas include John Kay, chairman of London Economics, and Charles Handy, the management guru, who have applied the idea to the way companies work. They say successful companies do not just serve their shareholders, but they also look after everyone who has a stake in the company's success: workers, managers, customers and suppliers as well as shareholders.
Q. So Blair pinched the idea from management books?
No, Blair's version of stakeholding includes ideas picked from all over the place, and he has been mulling it over for a long time. In his leadership manifesto 18 months ago, he lamented that social cohesion and a sense of responsibility were undermined when millions did not have a stake in society.
Blair is using the stakeholding as a phrase - not a catchy one - to sum up these ideas. The first is that government policy must be aimed at giving everyone opportunities to work, to learn, to train and to improve themselves. That gives them a stake in society. The second theme is that, in return, people must take more responsibility for themselves. Stakeholding is meant to encourage people to stand on their own two feet. It is not meant to be a recipe for more state intervention.
In Singapore, Blair said: "If people feel they have no stake in society, they feel little responsibility towards it and little inclination to work for its success."
Q. It still sounds very waffly. What does it mean in practice? What would stakeholding mean for the economy?
The first thing Blair means by it is tackling unemployment: giving people a stake in the economy, on thiscount, basically means giving them a job. And Labour has a long list of policies for the long-term unemployed and the young unemployed, ranging from new training to subsidies to private employers that take them on. If Labour's policies could really achieve all they promise, a stakeholder economy would be one in which no young person remained without training or work - and hence without a stake - for more than six months.
Q. Jobs. Is that all? What about giving people a greater stake in the company that employs them?
Stakeholding can mean anything from good communication to sharing the financial spoils through employee share-ownership schemes or workers' councils, depending on how radical you are. John Lewis, the retailer, is probably the best-known model of what a pure "stakeholder" company might be like: it is a partnership that is largely owned by its employees. And there are smaller firms, such as Baxi, the boiler manufacturer, in which 100 per cent of shares are owned by employees.
Labour doesn't want all companies to be like this, but it does want them to involve more of their workers through share ownership. Yesterday, for example, Alistair Darling, Labour's City spokesman, was promoting Employee Share Ownership Plans. Labour is looking at how employees might exert more influence over their investments in companies through pension funds, by making the funds account more openly for the decisions they make.
Q. Will companies be forced to do this sort of thing?
Unlikely. Blair made clear in his Singapore speech that much of the responsibility for change lies with the companies themselves: "We cannot by legislation guarantee that a company will behave in a way conducive to trust and long- term commitment. But it is surely time to assess how we shift the emphasis in corporate ethos ... towards a vision of the company as a community."
Q. Sounds fine, but surely it will just let the trade unions in through the back door?
Some union leaders might see it that way and in the past week the Conservatives have alleged that stakeholding is just a disguise for a return to corporatism. Dr Brian Mawhinney, the Conservative Party chairman, described it as "a deal under which Labour's old friends in the trade union movement would get back all the power and privileges they abused in the Seventies". Blair and Brown deny this. Brown said this week: "A stakeholder Britain is not a statist Britain ... Tony Blair and I have made it absolutely clear that we will not go back to the old corporatist agenda." The new stakeholders that Labour wants to appeal to are individuals rather than institutions.
Q. Is the idea confined to the economy and business?
Far from it. If anything, the most detailed policy proposals that Blair includes in the stakeholder theme are about the reform of the welfare state and education. Next month he will make a speech about what stakeholding will mean for people's political rights. The clearest example of a stakeholding Labour policy is the idea of an "individual learning account", shortly to be outlined by the education spokesman, David Blunkett. The account would be a way of showing people, perhaps through vouchers to spend on training, what each individual was entitled to in adult education. This would allow them more choice over where and when to learn. The Labour idea is that this would give people more of a sense of ownership over their education, rather than passively consuming whatever the state provides.
Q. What would a stakeholder welfare state look like?
Labour's social security spokesman, Chris Smith, is reported to be considering some radical ideas drawn from the Far East. At its most waffly this could mean people feeling more attached to the welfare state in the way they feel proud of the NHS. But there is a hard edge to the idea. It is that if people claim benefits, they must give something back to society. Labour accepts that long-term dependence on benefits is demoralising and self- perpetuating. It wants to use the benefits system to encourage people to become more self-reliant. So, for instance, unemployed people below the age of 25 would be offered several options for work and training if they were to continue getting benefits. If they turned these down, benefits would be cut.
Another idea is about pensions. Some Labour modernisers believe that the state should legislate to encourage people to save to cover periods of unemployment and provide for their old age. The general principle is that the state should encourage individuals to make the right choices about their pensions and their education, rather than to step in to do the job for them.
Q. What about our stake in the political system?
Blair has said little about this, although he intends to make a speech on stakeholding and constitutional reform next month. Giving everyone a real political stake means allowing people to participate more directly in political decision-making: it could mean anything from greater regional democracy to more referendums.
Q. So does stakeholding amount to a new departure or is it just a way of dressing up existing policies?
Most of the ideas Blair is talking about using the stakeholder idea are very familiar. He hopes stakeholding will provide more coherence to existing themes and policies. The concept of "stakeholding" alone fails to answer the important questions about whether Labour is fit to govern. Will Labour reform the welfare state and restrain public spending? Will it deliver on its low tax pledges? Does it really believe in the market, and how much will it use the state to intervene? The terminology of stakeholding doesn't help us to answer any of these questions, it is largely just a different way of discussing them.Reuse content