My hon. Friend advances the argument eloquently. We debate these issues and talk about employment rights, but if someone is in a poor workplace, is struggling to pay the rent or the mortgage and the bills, and faces a severe threat that they might lose their job, they might be forced into doing this. In many non-unionised businesses there will be nobody to police this, so those people might be forced into it. She powerfully made the point about how women, in particular, are in that type of situation.
I should have made my next point before the hon. Member for Eastbourne (Stephen Lloyd) intervened on me, but I will do so now. Paul Callaghan, partner in the employment team at Taylor Wessing, has said:
“Osborne is potentially forcing all new employees to waive the main employment rights including unfair dismissal and redundancy rights in exchange for £2,000 of shares. This makes Adrian Beecroft’s fire at will proposals look moderate.
From April it may become the norm for job offers to require this waiver which will also involve the loss of flexible working rights and stricter maternity rights. This is likely to have a disproportionate effect on women.”
Henry Stewart, founder and chief executive of the training company Happy Ltd, has said:
“I welcome anything which makes it cheaper and simpler to give employees shares, but coupling it with taking away employment rights is ridiculous. If as an employer you have a problem with unfair dismissals, you need to improve management—that’s what the government should be giving incentives for. I don't think it's been thought through.”
In a nutshell that sums up what I think of this proposal. Bad employers who are afraid of unfair dismissal cases, reprisals, recrimination and grievances from employees should think about how they are managing their staff and look hard at their human resources department.
Corey Rosen, founder of the National Centre for Employee Ownership, one of the world’s leading groups promoting share ownership, has said:
“There is a lot of employee ownership in our country, but not one of these employees and not one of these plans asks employees to give up any employment rights to get any of the various tax benefits associated with employee ownership.”
That is a voice from the United States, not somewhere known for being particularly friendly to those in trade unions or on employment rights.
Simon Caulkin, writer on management and business, has said:
“In effect, Osborne's cobbled-together scheme is a back-door re-run of the agenda of…Beecroft”.
Rebecca Briam, partner at Gannons Solicitors, said:
“It is unlikely to get off the ground.”
With only five businesses out of 200 wanting to take up the scheme, I think she is right. She goes on to say:
“The proposals will be unpopular with employees because the chances of benefitting are so slim.”
She said that it was
“unpopular with employers, especially privately controlled companies, because of the risks imposed to the share structure. Far from saving on payroll expenses, the total costs for an employer may well increase.”
Manufacturers’ organisation EEF said:
“Our members have indicated they would not implement the new status.”
The Federation of Small Businesses said:
“The scheme is unlikely to be appropriate for many small businesses.”
The Chartered Institute of Personnel and Development said:
“There is very little evidence as to why this policy is needed or what impact it will have.”
Such views support the new clause that is before us.
Earlier, I talked about the vehicles that are created for the purpose of tax avoidance. Matthew Findley, partner at law firm Pinsent Masons, addressed that matter quite eloquently. He noted that the income tax positions of those receiving the shares is still unclear:
“There is nothing in what the Government has said so far that would stop senior executives or substantial shareholders from participating in the arrangement. This may mean that an opportunity still exists for such individuals, even if they may be viewed by some as the ‘wrong’ people politically to benefit.”
Paul Johnson from the Institute for Fiscal Studies talked about the potential for tax avoidance as the scheme
“prepares to put another billion pound lollipop on the table.”
He says:
“Just as Government Ministers are falling over themselves to condemn such behaviour, that same Government is trumpeting a new tax policy which looks like it will foster a whole new avoidance industry.”
An avoidance industry is something of which a Government who want to create jobs cannot be proud.
I support new clause 11. As there has been such a low take-up of the scheme—only five in 200 companies have said that they would consider it—a report needs to be produced. Numerous commentators from the business community have expressed the fear that a new tax avoidance scheme is being set up, which suggests that this is a pertinent and sensible new clause, and I urge the Government to accept it.