Growth and Infrastructure Bill
Debate between Ian Murray and David Ward
Ian Murray
That might be the case, but one does not have to give up one’s fundamental worker’s rights to take the risk in shares in businesses. Many employees take shares in businesses, but they do not give up the rights to redundancy, to request flexible working, to training and to unfair dismissal and maternity rights. Last week, the hon. Gentleman made an impassioned speech about his running of businesses and the fact that his employees are always at the forefront of his mind. The vast majority of those in this country who start a business have employees at the forefront of their minds. But relationships do break down and businesses do run into trouble. I agree with him to a certain extent, but missing from the jigsaw is the fact that fundamental rights at work still have to be given up in order to take on those shares. He fails to recognise that that is part of the overall equation.
Let us examine the issue of tax avoidance that my hon. Friend the shadow Business Secretary mentioned in the House last week. The Treasury says—it is a Treasury document—that this will cost £1 billion, but the true cost may be more than that, as my hon. Friend said. As the Treasury’s December 2012 policy costing document says,
“It is hard to predict how quickly the increased scope for tax planning will be exploited.”
Let me examine this:
“increased scope for tax planning will be exploited.”
That sounds to me like tax avoidance and it was picked up by Paul Johnson, the director of the Institute for Fiscal Studies, who said:
“just as government ministers are falling over themselves to condemn such behaviour”—
tax avoidance—
“that same government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry.”
The Treasury document, by using the terminology
“increased scope for tax planning will be exploited”,
emphasises what Paul Johnson has said.
Mr Ward
Is not the value of shares very much up to those who control the shares? The value can be controlled by the majority shareholders, who often are directors of the company and can devalue a company at a moment’s notice by transferring assets out of the business into another company that they can set up.
Ian Murray
The hon. Gentleman makes a valuable point. He voted with the Opposition last week, on which he should be commended. The other issue around the concept of dilution of shares is that when new investment comes into a business, shares can be diluted. There is no provision for employees who are shareholders to be informed of that. Assets can be transferred out of businesses and there is nothing to stop employers, when they wish to make large scale redundancies of employee owners in the business, diluting the shares before they do so.