Growth and Infrastructure Bill

Jeremy Corbyn Excerpts

Monday 17th December 2012 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I heard what my hon. Friend the Member for Edinburgh South (Ian Murray) said about the inability to amend this part of the Bill, and I sympathise with his view, but I thought that it would be useful for us to test whether the Government’s intention was to adopt a genuine approach to developing the concept of employee ownership or whether this was merely an attack on employment rights. I thought that it would be useful to set out how an employee ownership scheme could be introduced, and that if the Government’s intention was indeed to develop the concept of employee ownership they would support my amendments, or at least commit themselves to tabling amendments to the same effect.

The argument about employee ownership relates to economic democracy. I believe that we should socialise our economy. I believe that individual workers at every level should have control over their own working lives, and that that means democratic control of the firm, the region and the nation. Over the years, the House has debated a variety of methods of bringing that about. We have discussed public ownership, and nationalisation as part of that; co-operation; mutualisation, by which I mean true mutualisation and not the alternative description of privatisation employed by the present Government; and worker ownership models, which have included the extension of employee ownership. A range of models have been discussed over the years, including the Scandinavian model—in which share entitlements are given to the workers and then put in trust, gradually amounting to control of the firm itself—and the individual employee ownership model proposed in the Nuttall review.

[Jeremy Corbyn (Islington North) (Lab)]

Will my hon. Friend confirm that none of the interesting employee ownership and co-operative models that exist throughout the world depend on individual employees giving up their statutory rights to redundancy, maternity pay or access to an employment tribunal?

--- Later in debate ---

[Mr McKenzie]

The hon. Gentleman makes a very good point. There are stark connotations for employees across the country if the scheme is put into practice.

[Jeremy Corbyn]

My hon. Friend is making an important point. Does the proposal not indicate the Government’s thinking? They are quite prepared to offer the carrot to many companies that they can simply buy out rights at any time in the future. Next time it might be a cash offer or something like that. We legislate to protect all workers. We legislate for all women to have maternity rights. We legislate for everybody. It is not up to a company or a Government to pick and choose who should be eligible for those rights.

[Mr McKenzie]

My hon. Friend makes a very good point; I could not agree more.

The Chancellor proclaimed that the proposal represented

“owners, workers and the taxman, all in it together,”

but the measure is divisive, goes against the spirit of one nation and risks creating a two-tier labour market across the country.

Offering employee owner contracts, where employees effectively sell their employment rights for shares, is unlikely, if ever, to deliver the highly motivated, engaged work force employers need. Ministers should be making it easier to hire employees, not easier to fire them.

Labour’s jobs plan includes tax breaks for small firms taking on extra employees. Labour supports employee ownership, but not coupling it with slashing employment rights. The US National Centre for Employee Ownership, one of the world’s leading groups promoting share ownership, has also criticised the scheme. The proposal smacks of fire at will. Although Ministers, including the Business Secretary, have claimed they are not going to take forward Mr Beecroft’s fire at will proposals, in practice they are introducing them by the back door. Ministers are trying to introduce the scheme without proper consultation or discussion, or indeed any real support.

The way the scheme will operate in practice and its ramifications are unclear. There are concerns about other ways in which the scheme could have an adverse impact on employees. Will jobs be advertised as being only employee owner and will employers be able to impose the scheme on individual employees or groups of employees? What safeguards will there be to ensure that the scheme is voluntary for existing employees, as Ministers claim?

The clause is a disaster for all, be they employees or employers, and it will not deliver growth in our economy. Businesses that utilise the scheme in recruiting will be recruiting from a smaller pool of talent, which will risk their not being able to take advantage if ever a real recovery comes about.

People giving up their hard-fought employment rights in return for a few shares beggars belief and takes this country back to the dark ages of employment practice. I ask that the clause be dropped.