With the greatest respect to the hon. Gentleman, my understanding is that the survey was conducted among the very businesses to which he refers. As far as I am aware, the Government have not claimed that it is specifically for small businesses. I am happy to be disabused if I have got that wrong.
Thirdly, the proposal could do immense damage to workplace relations and to the standing of business more generally. I say that from a common sense point of view and as an employment lawyer. What on earth are employees to think if suddenly, out of nowhere, their employer says, “Will you give up all your fundamental rights in this workplace if I give you some shares?” What signal will that send to the employee? [Interruption.] The hon. Member for Skipton and Ripon (Julian Smith) says from a sedentary position that it is voluntary, but what does that say about one’s relationship with an employer if they are talking about taking away fundamental rights at work? As Justin King, CEO of Sainsbury’s and until recently a member of the Prime Minister’s business advisory group, said, what will the population at large think of businesses that want to trade employment rights for money?
Fourthly, and this applies more generally to the Government’s moves to destroy the unfair dismissal regime, removing people’s rights to claim unfair dismissal, or a redundancy payment for which compensation is capped, will simply increase the likelihood of employers facing spurious discrimination claims brought against them, for which compensation is unlimited. That was a point made by Baroness Brinton in the other place.
If an employee is to be offered this special type of employment status, it is important that they should be able to access proper advice on it, particularly in this climate when jobs are few and far between. That point was made by the noble and learned Lord Pannick, who proposed the amendment. The Government have refused to accept that statutory rights should be lost only if the agreement is in writing and the person concerned has received proper independent legal advice on its consequences. That is how it applies in relation to compromise agreements.
Then there is the issue of the shares themselves and tax. How on earth are these to be valued, particularly given—if the hon. Member for Enfield North (Nick de
Bois) is right that the measure is aimed at small companies—that many are unquoted. How will the value of shares be determined without incurring exorbitant fees that would render the whole exercise worthless? According to the Treasury, it will cost the Exchequer £l billion by the end of the forecast period, but the true cost may well be more because, as the Treasury’s December 2012 policy costing document says, it is hard to predict how quickly the increased scope for tax planning will be exploited. That point was picked up by Paul Johnson, the director of the Institute for Fiscal Studies, who said that
“just as government ministers are falling over themselves to condemn”
tax avoidance
“that same government is trumpeting a new tax policy that looks like it will foster a whole new avoidance industry.”