Congratulations to the House of Lords who last night voted down -for a second time- Osborne's batty scheme to allow employees to swap shares in excahnge for their employment rights. Beecroft by the backdoor as it has been called. I note that the majority against the scheme was bigger second time around.
If I'm reading the lobby list properly the opponents included: Paddy Ashdown, David Steel, Shirley Williams, Dick Taverne, Mathew Oakeshott, Ros Scott and Ronnie Fearn. Sal Brinton made the key Lib Dem speech opposing the move.
I was also struck by :
Baroness Warnock: My Lords, noble Lords may be somewhat surprised that I speak on this issue, but it so happens that I have spent a great deal of the past few months looking into employee shareholding and employee ownership and have had long discussions with Charlie Mayfield, who, as noble Lords know, is chairman of the John Lewis Partnership. He was consulted about this proposal and simply regarded it as laughable.
22 Apr 2013 : Column 1262
What kind of firms did the Government really have in mind when they invented this farrago-it seems to me-of nonsense? I believe that they had in mind the smallish high-tech firms that set up outside Cambridge, Oxford, Bristol and so on. They thought that all the people employed by this kind of firm were going to be high-tech experts and graduates of their local universities and that the company would be inventive and innovative and, when it got bigger, would probably sell itself off, having made a profit. I do not think, when this was invented, that the Government had in mind that large companies would really have any interest. In fact, I remember that on Report the Minister was reduced to saying, "Well, the good thing about this is that not very many people will take it up". That seemed to be an extraordinary argument in favour of it. Does the Minister really think that this will be an option open universally to businesses, including retail and manufacturing ones, or is he still thinking, as I am sure the Government were at first, of these very small businesses where everyone starts off more or less equal-equally well educated, intelligent and able to get legal advice-and is anyway probably in it for the interest of the thing and its short-term life?
The Employee Ownership Association put out a statement:
Iain Hasdell, CEO of the Employee Ownership Association welcomes the removal of the Chancellor’s “Rights for Shares” measures from the Growth and Infrastructure Bill on behalf of the UKs employee owned businesses.
Speaking after the Government Bill was amended in the House of Lords to remove the section (Clause 27) Hasdell said: “I am delighted to see that the now infamous rights for shares scheme has been overturned by the House of Lords. Our member businesses and the employee owners within them were alarmed that the Government’s proposals might redefine employee ownership as a model in which worker rights on such matters as redundancy and unfair dismissal have to be sacrificed by employees in order for them to be allowed an ownership stake in the business in which they work.
“We have consistently told Ministers and Parliamentarians that that there is no need to dilute the rights of workers in order to grow employee ownership, and it is gratifying to see that Peers from all parties including Lord Adonis, Baroness Brinton, Lord Deben and Baroness Howe have listened to our concerns and joined together to remove, for the time being at least, this flawed concept from the Growth and Infrastructure Bill.”
He continued: “Employee ownership in the UK is growing and the businesses concerned thriving, because they enhance not dilute the working conditions and entitlements of employee owners. If the estimated £100m of cost associated with these proposals can be more wisely invested in initiatives to increase employee ownership in the UK, including investing some of it to implement the recommendations contained in the Nuttall Review, we will reach our target of 10% of GDP being created by employee owned businesses far faster.”
To encourage growth in the UK, we need strong companies which can provide great products and services over the long term, we need the following reforms to be introduced: full text here
I see a FT journalist has tweeted