Growth and Infrastructure Bill

Gordon Birtwistle Excerpts

Monday 17th December 2012 Commons Chamber

[John McDonnell]

I am trying to find a Dickensian analogy; perhaps it should be great expectations met by hard times.

I was interested in the TUC response which was supplied to Members. It addressed the potential for this reform to be used for tax-avoidance purposes, through people switching their share schemes and entering into new ones. It appears, therefore, that although there will be no gain in terms of increased employment, this reform will be used as yet another tax dodge.

These proposals also threaten flexible working. As the Fawcett Society says, they will discriminate in particular against women and those who are carers. I thought Members across the House supported flexible working, but it is now suddenly seen as a burden that is to be negotiated away and lifted off businesses. The Equality and Human Rights Commission also expressed concerns about the potential of the Government’s proposals to allow discriminatory behaviour.

My overall assessment is therefore that these proposals are not intended to promote employee ownership at all; rather, they are an attack on employment rights. If the Government were serious about promoting employee ownership, they would either accept my amendments or work them up into a more definitive scheme. I am convinced we would then achieve cross-House consensus in favour of such a scheme. There must not be any link to an exchange of employment rights, however. As I have said, far from serving to promote employment and therefore be a benefit to the economy, it appears these reforms will be an expensive tax avoidance scheme, with up to £1 billion lost to the Exchequer.

I urge the Government to think again and to bring forward proper proposals. As on all such occasions, I give them this warning: legislate in haste and regret at leisure. That is what will occur as a result of these proposals. I am extremely disappointed that the debate has been dragged into the gutter, with attacks on working people. Over the years, so many of us have advocated democratising companies, the benefits of worker involvement in companies and the benefits of extending ownership in companies so people have greater control of their working lives. The Government have demeaned themselves by tacking such proposals on to this Bill in this way. Fresh thought is required if we seriously want to legislate for employee ownership schemes.

[Gordon Birtwistle (Burnley) (LD)]

My first question is: where are all the Members who are supposed to be supporting this Bill?

I believe in freedom of choice. If an individual wishes to work for a company on a contract such as that which is proposed, they should be able to do so. That will not be the case in the big industries. Rolls-Royce and Jaguar Land Rover are not going to get involved. This scheme is for small niche companies in the high-risk sectors, such as high-tech firms and website designers, which employ recent graduates who want to get involved in such firms because they hope they will become a second Google. These companies are the gamblers that grow and create jobs in the future. I cannot understand why this Parliament should stand in the way of these people and say, “I’m sorry, but you can’t do that, even if you wish to do so.”

I think back to the 1960s when I was 24 and I had just come out of my apprenticeship. I went for a job as a contract draughtsman. I was offered two alternatives by the company. It was a good company, and it said I could have all the schemes it had, such as holiday pay and a contract for 44 hours of work a week—those were the hours we used to work in those days—and I would have a fixed rate. Alternatively, the company said I could have none of those schemes and have four shillings an hour more than everybody else was getting. I was keen to earn extra money, because I wanted to save up and put a deposit down on a house, so I decided not to have any of the conditions laid down by the company. I decided, on my own back, as I had the freedom to do so, to take extra money for working as many hours as I wished while having no contractual employment. I did that for two years and managed to raise enough money to put down a deposit on a house. That was my choice and it was the company’s choice to offer it to me. Other people worked there who wished to carry on with the conditions they had, but other young guys like me wanted to raise as much money as they could to put down deposits on houses, buy new cars and so on, and they went ahead and did it. They were free to do it—there was no pressure.

[Mr Chuka Umunna (Streatham) (Lab)]

The hon. Gentleman’s central argument is that the proposed scheme is voluntary, but my problem, in addition to all the comments made by my hon. Friend the Member for Edinburgh South (Ian Murray), is that the Government have singularly failed to give any guarantee that a prospective employee in receipt of JSA who does not wish to take up such employment will not be penalised for not wishing to take a job without basic fundamental rights. That is, in fairness, the point that the right hon. Member for Hazel Grove (Andrew Stunell) has made: we have received no guarantees whatsoever. How can the hon. Member for Burnley (Gordon Birtwistle) say that this is voluntarily, if people could face such sanctions?

[Gordon Birtwistle]

I thank the shadow Secretary of State for his observation. My name is on the amendments tabled by my right hon. Friend the Member for Hazel Grove (Andrew Stunell) and I am waiting for the Minister to answer the questions they raise. I am sure he will give us some advice. If a the jobcentre advertisement for a job makes it clear that it involves giving away rights in return for shares, the person going for it will know that before they apply and will be completely open to the idea. If the jobcentre does not advertise those conditions, and the applicant is told about them only when he goes in for interview, my concern is whether he will still get his benefits when he tells the job centre the conditions he has been offered. I hope that the Minister will advise me that that applicant will still get their benefits, and if he does not I shall be extremely concerned and will have to consider which way to go. However, I am sure that the queries raised by our amendments will be answered.

[Sheila Gilmore (Edinburgh East) (Lab)]

The hon. Gentleman does not appear to be aware that even if someone refuses to go for an interview for a job because they have read the details and seen that they would have to give up their rights, they could be sanctioned—that is, they could lose benefit—because of that.

[Gordon Birtwistle]

The hon. Lady will be anxious to hear the Minister’s answer to that question, which our amendments put to him. We have tabled the amendments to tease the answers out of him—if she had proposed an amendment, she would have received an answer to her question, but she has obviously merely turned up today to try to stir things up.

Amendment 41 will, I hope, clear this question up. I hope the Minister can give us an answer, and if he does not we will have to ask other questions at another time. My main concern is about an applicant who is sent for a job by the jobcentre and finds out only when they arrive that it is a share-ownership job. Will their jobseeker’s allowance be affected if they refuse it? I am reasonably confident that it will not.

This will only happen in small niche companies. I do not think that we have the right to stand in the way of people who wish to get involved in such businesses, to get on, to take a gamble or to be involved in a company that will grow, so that their £2,000-worth of shares grows with it. There might well be a second Google somewhere, but I do not want to tell people that although they might have wanted to make those decisions, I did not want to give them the opportunity. That is why I support these proposals.

[Ian Murray]

I am very grateful to the hon. Gentleman for giving way, as he is being incredibly generous in doing so. Does he not accept that in his example from the 1960s—50 years ago—taking extra money in return for rights was completely voluntary? He could have refused that, but many of the examples we are hearing involve cases that will not be voluntary, as people might be coerced to give up their rights for worthless shares.

[Gordon Birtwistle]

I accept that in my case it was voluntary. I could have taken holiday pay, but I would rather have had the four shillings an hour more, which is very little today but was a lot of money in those days, to save up. I am reasonably confident that what I will hear from the Minister will lead me to believe that the proposal is voluntary enough. I am sure that it is voluntary and what I have read in the Bill does not suggest that people will be forced. I think the proposal is okay, but it is a small idea for niche businesses. Major companies will not be offering the option, only small companies, and we do not have the right to stand in the way of people’s freedom to take it up if they wish.

[Mrs Mary Glindon (North Tyneside) (Lab)]

I want to speak about this group of amendments because in recent weeks, like many other hon. Members in the Chamber, I have been contacted by a number of my constituents who are concerned about the Bill and would rather see it rejected. In the past week, I received a constant flow of correspondence specifically on clause 25 and not one of those people had anything good to say about it.

My hon. Friend the Member for Hayes and Harlington (John McDonnell) made a good case for his amendments and the coalition partners, the right hon. Member for Hazel Grove (Andrew Stunell) and the hon. Member for Burnley (Gordon Birtwistle), have tried to ease the severity of the clause with their amendments. As my constituents have identified, however, the clause has no saving graces. The recent consultation showed that as few as five out of 200 businesses say that they would want to use such a scheme, but the Government want to see it rolled out. They want employers to take it up, as they would get a far greater pool of employees to choose from, and it is hoped that potential employees would have a better opportunity of finding employment—but at what cost? If someone has to forfeit their rights on unfair dismissal and to redundancy pay, that cannot be a price worth paying.

My constituents have asked time and again what the real value of shares could be. Once the shares are paid for, national insurance and pay-as-you-earn taxation will come into play. Forfeiting all those rights for a hefty tax bill does not make sense. One of the strongest arguments for me is that the clause is bad for women, as parents, and carers, who need flexible employment to have the dignity of working while they carry out their valuable roles. Such employment gives them the opportunity to be outside the home and to feel not only that they contribute by looking after their loved ones but that they play a valuable role in society, as well as providing them with a social link with the wider world.

By not having flexible working, people also forfeit the right to training. How does that fit into a Bill about growing the economy? Training for personal and professional development is crucial for firms to grow and expand. We cannot have a standstill work force who do not keep up with all forms of training. People do not feel valued if they do not have that development. We have seen what a difference investing in people makes to firms.

The whole scheme smacks of inequality and goes completely against the equal opportunities that have been so hard-fought for. We could go on: the loss of maternity rights would be something else that disadvantages women.

The clause should be deleted. It is completely against the rights of workers and it will do nothing to grow businesses.