Businesses: Employee-shareholder Scheme

Lord Forsyth of Drumlean Excerpts

Thursday 9th January 2014 Lords Chamber

[Viscount Younger of Leckie]

First, my noble friend is probably referring to the Royal Mail rather than the Post Office. I can say that around 150,000 eligible Royal Mail employees have been given shares under the free shares offer. Only 372 employees opted out of the scheme, which means that approximately 99.75% of eligible employees received the free shares that they were offered. This is the largest employee-share scheme of any major privatisation for 30 years.

On my noble friend’s second point, the national minimum wage is a vital safety net in protecting the low paid. We have already said that we need to do more to make sure that the benefits of growth are shared fairly. My right honourable friend in the other place, Vince Cable, has asked the Low Pay Commission to extend its expertise to look at what economic conditions would be needed to allow the national minimum wage to rise. The convention is that if there is a rise, it will commence in October, and that the report will be in the spring of 2014.

[Lord Forsyth of Drumlean (Con)]

My Lords, will my noble friend indicate whether the Government are happy that the private equity industry is using the employee-shareholder scheme to create incentives for highly paid executives that will enable them to be awarded shares and avoid capital gains tax?

[Viscount Younger of Leckie]

My noble friend would expect—and will not be surprised—to hear me say that it is not my department’s responsibility to formulate tax policy, and that the figures that were given during the course of discussions on the Bill were very much estimates.