Both a bully’s charter and a massive tax loophole


Andrew Adonis on why the government’s ‘shares for rights’ proposals are the antithesis of One Nation policymaking

Employees don’t want it. Employers don’t want it. Lib Dems don’t want it. And we certainly don’t want it.

Today in the Lords, George Osborne’s ‘Beecroft-by-the-back-door’ employee shareholder proposals are being debated in the final day of Committee on the Growth and Infrastructure Bill. I wrote about the scheme when it was debated at Second Reading and things haven’t got any better since. 

Taking it as read that the employment rights in question – the right to request training, right to request flexible working, right not to be unfairly dismissed, right to redundancy pay – are valuable protections, a quick run through the list of problems shows the scheme up for the mess of pottage that it is.

It’s a bully’s charter (part I)...

There is currently no requirement in the relevant clause in the Bill for employers to provide anything in the way of independent legal advice. As the Equality and Human Rights Commission put it: 

“A failure to include effective safeguards in the proposals would make it strongly arguable that the proposals indirectly discriminate against those less likely to be able to make a properly informed or truly voluntary decision, for example, people whose first language is not English, those with learning disabilities, or young workers.”

They go on, in order to: “avoid a finding of indirect discrimination, it would be necessary for the individual to have a right to receive appropriate advice and for the employer to be required to draw this to his or her attention.”

It’s a bully’s charter (part II)...

Those claiming jobseekers’ allowance currently have to take jobs that are offered to them or run the risk of losing their benefits. There is nothing in the Bill to stop them from being forced to take “no rights” jobs. In fact, the government has said that they would be expected to take such jobs unless there were specific circumstances that would make such a job inappropriate. 

The Minister in the Lords had promised to provide a draft of the revised guidance for those who will be making decisions about whether mitigating circumstances exist. I wrote to her asking specifically for the draft guidance before the start of Committee. After much delay, the response came: “I will share it with the House when it has been drafted”. We are still waiting.

It’s a massive tax loophole...

Buried on page 52 of a document called Policy Costings, which accompanied the Autumn Statement last year, is the sentence “the cost [to the Treasury] is expected to rise towards £1bn beyond the end of the forecast horizon”. How the Chancellor can keep a straight face when berating certain companies for their tax avoidance tactics whilst simultaneously writing a £1bn tax avoidance tactic onto the statute books beggars belief.

Above all, Ministers are introducing this as a key element in a flagship Bill – it is the scheme that is supposed to get the British economy moving again. Not establishing a British Investment Bank to support UK companies. Not delivering the necessary house building programme that the nation needs. Not providing policy certainty for investors. Not providing the high quality apprenticeships needed for our young people to be able to compete in a global marketplace. But, instead, a scheme to trade vital, hard-won, employment rights for potentially worthless shares. 

At the bottom end of the scale it’s a bully’s charter. At the top end it’s a £1bn tax loophole. Either way, it is the antithesis of One Nation policymaking.

Lord Andrew Adonis is Labour’s infrastructure and growth spokesman in the Lords 

6th February 2013


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