Growth and Infrastructure Bill

Jim Shannon Excerpts

Monday 17th December 2012 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

I firmly believe that there is nothing in the Bill to address the root cause of the problem that faces us—the Government’s economic failure. Our economy is only just back to the size it was a year ago, and we have seen a double-dip recession and increased Government borrowing. Adding “growth” to the title of the Bill will not make it so. Even the Prime Minister admits that we cannot legislate for growth.

As we have seen, the Government’s economic plan has plunged Britain into the longest double-dip recession since the second world war. To cover that, they have hurriedly pulled together this flawed piece of legislation. There is nothing in the Bill to address our problems of economic failure; instead, the clause on employee owner shares for rights will only make it an attack on workers’ rights.

The proposals announced by the Chancellor will allow businesses to offer individuals contracts and a new employment status to make them employee owners. Under that new status, employee owners will receive shares in the employer’s company. However, as we know, there is always a catch: in return, employee owners will have to give up certain employment rights, including those on unfair dismissal, statutory redundancy pay and requesting flexible working and training. The scheme has not won support from the business community; a 33-week consultation had more than 200 responses but only five businesses said they would be interested in taking it up.

Labour is in favour of employee ownership, but not coupling it with slashing employment rights. Doing away with people’s rights at work is wrong in principle and will do nothing to bring about growth in our economy.

There are concerns about the full cost of the scheme. It has been said that

“the cost is expected to rise towards £1 billion,”

and:

“Uncertainties abound like assumptions on take up rates, the average value of shares that are entered into the scheme, the extent of tax planning and the timing of disposals.”

According to the Office for Budget Responsibility, a quarter of the £1 billion additional cost—£250 million—is expected to arise from tax avoidance as a result of the scheme.

Slashing the rights of people at work is wrong in principle and will not help bring about jobs and growth; the proposal is yet another example of how out of touch this Government are. The scheme has not won support from business; it has received at best a lukewarm reception. Not even the CBI supports the proposals and called them

“niche…and not relevant to all businesses.”

As we have heard, the chief executive of Sainsbury’s was not exactly over the moon about them either. He was hardly embracing them when he said:

“This is not something for our business...What do you think the population at large will think of businesses that want to trade employment rights for money?”

We all know what we think about that.

[Jim Shannon (Strangford) (DUP)]

Earlier on, there was a reference to Ebenezer Scrooge. Is it not more a case of the grim reaper going deep into the rights of employees?

[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.