Growth and Infrastructure Bill
Debate between Lord Adonis and Lord Stewartby
Lord Stewartby
My Lords, I shall be very brief, but there is one point on which I should like confirmation from the Minister when he sums up. The provisions that have been introduced into this statute refer to all sorts of guidance and recommendations. They do not include the valuation of shares, yet quite a lot of the discussion has taken place as though they do. An opportunity to correct that would be helpful.
Lord Adonis
My Lords, I said at the outset of our debates on this shares-for-rights scheme that it makes the back of the envelope look like Magna Carta. As a result of our deliberations, the envelope is somewhat more neatly addressed, and for that at least we should be grateful. I join other noble Lords in paying tribute in particular to the noble Lord, Lord Pannick, who has pursued the Government tirelessly on this scheme and, if I may say so, has become something of the constitutional conscience of the House, with large numbers of Members being dragged along or tagging along with him but none the less getting to the right place in the end.
I also acknowledge the important role played by Conservative and Lib Dem Peers on this issue, notably the noble Lords, Lord Forsyth and Lord King, and the noble Baroness, Lady Brinton, who have been indefatigable in raising the issues that we have had to address and in ensuring that we have secured at least some safeguards in the Bill and made the proposal at least somewhat less objectionable than it was when it was introduced.
There have been some safeguards and the Bill is somewhat less objectionable, but the reality is that this shares-for-rights proposal is still fundamentally flawed and fundamentally wrong. It is not the details that are wrong; like the poll tax, the basic idea is wrong. The idea that fundamental employment rights granted by Parliament to ensure that employees are treated fairly can or should be traded for shares, let alone shares worth as little as £2,000, is fundamentally objectionable. We are talking about basic employment rights which, as the noble Lord, Lord Forsyth, pointed out in our deliberations, have been granted by Governments, including Conservative Governments, over recent decades: the right to redundancy pay; the right not to be dismissed unfairly; the right to request flexible working in order to look after dependants; and the right to request training. These are basic rights and, as the noble Lord, Lord Bilimoria, said, there is a fundamental confusion at the heart of this proposal between employment rights on the one hand and enhancing wider share ownership on the other. We are all in favour of wider share ownership. Indeed, the Government commissioned the Nuttall review, which reported only six months before this proposal came out of the Chancellor’s bath in favour of a whole set of measures to widen share ownership. Not one of them was the proposal before your Lordships this evening and indeed it was not even considered by Nuttall, so absurd would it have been to the Nuttall advisers.
Growth and Infrastructure Bill
Debate between Lord Adonis and Lord Stewartby
Lord Stewartby
My Lords, I will not follow in detail what my noble friend Lord Flight said in his excellent introduction to this debate, because he said most of what I would like to say, but much more eloquently than I could. What comes out of this debate, despite the various points that have not yet been cleared up, is that this is a voluntary activity. Employee shareholders would come about only if the shareholders wanted them to and voted for them without coercion. It is an experimental proposal, and although I do not share the doubts that some have about its merits I do think it is potentially a somewhat complicated arrangement.
The best thing to do when you have a proposal of this kind is to test it out. If you do not pass the legislation, you will never have a chance to see whether it works. My own view is that the demand for this type of opportunity will become more evident as time goes on. It is very suitable for high-risk, rapid-growth businesses. Of course, there will be failures and shortcomings, as there always are in speculative areas of investment, but this belongs to the area of high-risk reward, and I would like to see it given a chance to show its form.
The Bill in effect constructs a new type of relationship between shareholders and members of a company and adds a new status, giving it a certain novelty. This proposal is sensible, as my noble friend has said, and the way ahead will not emerge until the thing is given a chance. The proposal is imaginative and innovative, and I think it would be a good thing if we put it on the statute book.
Lord Adonis
My Lords, I am sorry to disagree with the noble Lord, Lord Stewartby, but to my mind when you have a totally mad idea like the one before us the best thing is not to test it out but to kill it at birth, and I hope that is what we are going to do in the debate that is to follow.
In response to this amendment I should say that never in my life, at least knowingly, have I been in such agreement with the noble Lord, Lord Forsyth—and we look forward to his contribution in the debate that follows. As he says, Clause 27 is ill thought through, confused and muddled. The amendment proposed by the noble Lord, Lord Flight, achieves the remarkable feat of making it even worse, on which I congratulate him. However, I think that the mood of the House is that we should get on to the substance as soon as possible, and I hope that we can now do so.