Growth and Infrastructure Bill

John McDonnell Excerpts

Tuesday 16th April 2013 Commons Chamber

[Nick de Bois]

No responsible employer would ever relish the prospect of losing the experience that he has invested in to help to develop his business. I have had the pleasure of offering people jobs and of recognising that in some cases, if they have come from unemployment, it can be a life-changing experience for them. However, I have also shared the pain of having to lose people, often through no fault of their own, and I will take no lectures from anyone about how employers relish losing people. It does not happen.

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

I want to make four simple, brief points. The first is about share ownership. I tabled amendments when the Bill was debated in this House to try to extend share ownership without connecting that with the loss of rights. It is noticeable that the Government opposed those amendments. As people look to reconstruct the economy and learn the lessons from what has happened in this economic crisis, there is a genuine willingness to look at greater involvement by the work force in the management of companies. Part of that is about extending share ownership to workers. That is a development that we have welcomed in both Houses. The problem is that linking the two things in this way will not act as an incentive for companies to recruit the best; in fact, it will act as a deterrent. If someone faces the choice of going to a company that offers them share ownership without the loss of rights, they will go to that company. If they have the opportunity of going to a company where they will have to sell some of their rights, that will obviously act as a deterrent.

[Andy Sawford]

I agree with my hon. Friend’s point about workers in that situation, but we should also challenge the account that is being given about how attractive this measure will be to small businesses. I have run a small business. The idea that I would have to work out the tax and other implications of this measure with my work force when I had far more important things to do—building a good, strong work force and running a business—does not stack up to me.

[John McDonnell]

I was going to make that point. There is an element of complexity in this scheme which will lead to small businesses coming to us in about six months’ time and saying that it is part of the overburdening of regulation.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

On that point, the assumption has been made that all employees will opt for this status, but in many cases some workers will, while others will refuse, leading to two types of worker in the same business and even more complexity for the very small businesses that we are trying to support.

[John McDonnell]

That leads on to my second point—I do not want to delay the House. This measure opens up the process of recruitment, retention and promotion to potential victimisation and abuse. Despite the formal protections that the Government assure us will be put in place, the reality is that informal pressures will be put on those who wish to be recruited, retained or promoted and these will override the formal protections. Those who have represented people at tribunals and elsewhere will know that it is extremely difficult to prove victimisation and bullying in the work force. Those informal pressures will eventually undermine the credibility of the scheme. My fear is that they will also undermine the credibility of employee share ownership schemes overall.

Thirdly, I look forward to reading the draft regulations and guidance on protections for jobseeker’s allowance. However, ministerial statements on JSA protections in recent months, as recorded in Hansard, have proved not to be worth the paper they are written on. I refer to assurance after assurance we were given that there were no targets for sanctions in individual jobcentres, when we now have concrete evidence that that is the case. Ministerial assurances on the operation of JSA have so far not proved to be effective. I believe that, at the end of the day, they will prove not to be effective in this case either, because the same informal pressures will be put on jobcentre workers to meet targets for sanctions overall.

Finally, this measure sets an extremely dangerous precedent. The idea of selling rights could creep into other areas of policy making. For example, will landlords in future be able to offer reduced rents for reductions in security of tenure? Will consumer rights be sold for a reduction in the price of particular goods? That is much more significant than the scheme being proposed in this debate. The idea that rights can be sold in any sphere of government activity sets a dangerous precedent for the future development of rights in this country.

[Julian Smith]

Does not the hon. Gentleman agree that businesses throughout Britain have been laden down with regulation, particularly in employment, and that we have to try constantly to make it easier for them to take people on, particularly at the moment, when we need to do that to create jobs?

[John McDonnell]

With the greatest respect to the hon. Gentleman, I disagree. We have heard this argument about the overburdening of regulation year after year, and it is usually used as a justification to give employers the facility to sack people, cut their wages or undermine their employment rights.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Did not the last intervention let the cat out of the bag? This is essentially about deregulating the labour market via the back door.

[John McDonnell]

It is, but I was trying to be a bit more subtle about the process of allegation—I appreciate that it does not really suit my style of speaking.

The point I am trying to make is that, in addition to the process of selling rights, the scheme will not just be unworkable—because its implementation will increase burdensome regulation even more, as my hon. Friends have said—but will act as a deterrent against positive moves towards the development of share ownership and worker engagement in companies. On that basis, I think that, apart from being iniquitous, this measure will be counter-productive. That is why I wholeheartedly agree with the points my hon. Friend the shadow Secretary of State made in support of the Lords amendment.