Growth and Infrastructure Bill

Mel Stride Excerpts

Monday 5th November 2012 Commons Chamber

[Ian Murray]

Given the current state of the economy, the hon. Gentleman should be a little more contrite when it comes to economic growth. I only hope that those remarks do not come back to haunt him when the effects of the Olympics are stripped out of growth in the next forecast. We all want to see growth in this country, but we need to wait and see what happens. As I was saying, the Prime Minister’s claim is not supported by the evidence in front of us.

Let me move on to what I think is the worst part of the Bill—shares for rights, or, more accurately, rights for peanuts. This part of the Bill introduces the new concept of an employee owner, but not one Government Member has raised this issue during the debate. I think that perhaps says it all and reflects the debate we had on Third Reading of the Enterprise and Regulatory Reform Bill. On the Opposition side, we are strongly in favour of employee ownership, but coupling it with slashing employment rights is contradictory and counter-productive.

Doing away with people’s rights at work is wrong in principle and will do nothing for economic growth. The Employee Ownership Association has pointed out that boosting employee ownership

“does not require the dilution of rights”.

The Chancellor heralded this as an attempt to create a flexible work force, which is ironic given that taking up the shares for rights scheme will mean giving up on flexibility in the sense of flexible working. We must emphasise time and time again that the UK already has the third most flexible employment regime in the OECD—even before the measures passed on Third Reading of the Enterprise and Regulatory Reform Bill last week. This has nothing to do with flexibility; it will simply allow employers to fire at will.

We oppose these measures, not just because they are bad for employees, but crucially because they are bad for business. As Justin King of Sainsbury’s has said, these proposals are likely further to damage the already fragile reputation of business. He said:

“What do you think the population at large will think of businesses that want to trade employment rights for money?”

Any employee who signs up to the scheme will effectively allow the employer to operate a compensated no-fault dismissal scheme of the type proposed by Adrian Beecroft which, apparently, is so fiercely resisted by the Secretary of State for Business, Innovation and Skills. Simon Caulkin, a writer on management and business, said:

“In effect, Osborne’s cobbled-together scheme is a back-door re-run of the agenda of Adrian Beecroft”.

Paul Callaghan, partner in the employment team at Taylor Wessing, went further when he said:

“This makes Adrian Beecroft’s fire at will proposals look moderate.”

There is absolutely no evidence to back up these proposals. Being offered as little as £2,000 in shares to give up entitlements to redundancy payments, training, unfair dismissal and some maternity provisions is bad enough, but how can the Government claim to be the most family-friendly ever, when the right to request flexible working hours, which might be helpful for child care and parental employment prospects, is also included in the Bill?

[Mel Stride (Central Devon) (Con)]

Surely the whole point of an employee share scheme is that it is voluntary and optional. Is it not rather patronising of the hon. Gentleman to suggest that those in employment are incapable of exercising such a choice?

[Ian Murray]

Let me make three points in answer to that question. First, this applies to new jobs. Secondly, there would be nothing to prevent an employer from sacking all the work force and then taking them on again with new contracts. Thirdly, how can the scheme be voluntary if the job is conditional on people signing up to one of those contracts?

Sarah Jackson, chief executive of Working Families, has said:

“Employers beware. Offering owner employee contracts—where employees effectively sell their employment rights for shares—is unlikely to deliver the highly motivated, engaged workforce you need.

Few men or women with family responsibilities would want such a contract”.

[Mel Stride]

I thank the hon. Gentleman for giving way again. If the scheme is not voluntary, can he explain exactly who will be forced to take part in it?

[Ian Murray]

I suspect that we shall see two developments. We shall probably see an advertisement for employee ownership contracts in the first instance, and we shall probably see unscrupulous employers offering contracts on an employee-ownership basis to people when they feel that it will not be in the best interests for those people to be on normal full-time contracts. [Interruption.] Ministers are shouting “You cannot answer the question” from a sedentary position. I should like the Minister of State to come to the Dispatch Box and give a cast-iron guarantee that not one employee in the country, either in or out of work, will be forced to accept one of these contracts. I can assure him that that will not be the case.