My Lords, in October, the Chancellor announced that he intended to create a new employment status called employee owner. This new employment status has different employment rights from employees. Employee owners could own shares worth between £2,000 and £50,000 in companies they work for and will not be subject to capital gains tax.
I thank the Minister for that reply, but can anyone here imagine a decent employer trying to bribe workers to give up their employment rights in return for shares of questionable value? After all, some 50% of small firms fold within five years. Will not decent employers agree with Justin King, the boss of Sainsbury's, who said that this is not what we should be doing? Will the Government stop once and for all encouraging employers to show a degree of contempt for workers' rights and ditch this tawdry proposal?
My Lords, I have obviously read the TUC's views on this, and I am not surprised that the noble Lord should wish to propound them, but we must understand that this is a voluntary, not a compulsory, scheme between employees and employers. Surely that is the best way forward for employee relations, as the noble Lord must concede.
My Lords, does the Minister agree that, if the Government are determined to proceed with this proposal, it is absolutely essential that, when legislation is brought forward, safeguards are built in to ensure that there is no compulsion from the employer on the employee and that a mechanism is put in place whereby appropriate legal advice can be obtained by any employee before he takes up this offer?
I could not agree more with my noble friend. We should obviously look at this proposal. It will go through this House as it is going through the other place at the moment and we will have the opportunity to scrutinise what is currently a concept and put some straight edges on it, which this House always does so well. I could not agree more that it needs looking at very carefully. However, this is a voluntary scheme, as I have said, and it is surely in the best interests of corporate endeavour to have employees and employers working together as a scheme.
My Lords, is it not a fact that one person's volunteerism is another person's bullying? Does the Minister agree that these plans are on a par with efforts now being made to disestablish the NHS Agenda for Change national pay scheme? Will he agree to look into the activities being undertaken by those who want to dismantle Agenda for Change and intervene to stop them?
We have to be very careful about bandying around harsh words such as "bullying". That is not reasonable. We have a voluntary agreement. Companies in my experience-I have a reasonable amount of experience-do best where both employees and employers co-operate. I was proud to be a founder shareholder of a business where well over 80% of the employees were shareholders. It meant that there was a community of interest and spirit of endeavour. We want to encourage that. It is incumbent on this Government to find ways of generating enterprise and a spirit of going forward together. This scheme does that admirably.
My Lords, I am very concerned to hear that Mr Justin King does not approve of this scheme. Is he saying that Sainsbury's shares are therefore not worth holding?
I am afraid that I am not much for making a commentary on share prices; my record is not outstanding in that regard. I wonder whether Mr King's competition is with Waitrose, where of course there is broad employee ownership and, I understand, a very good spirit of co-operation.
No one is suggesting for one moment that we do not recognise employee rights. It would be outrageous not to do that. We have no intention of doing that. We are putting forward a very sensible and well thought-out scheme, which recognises employee rights but also recognises that if you want to be a shareholder in endeavour or to create value for yourself in a small, emerging company then you have to take the same road as the people who are employing you. This is a fantastic opportunity for employees to share in this enterprise and it is a terrific scheme.
Does the noble Lord accept that there is a world of difference between a mutual association such as Waitrose, where the entire staff own the organisation, and the proposed scheme where employees may have a small share? I wonder whether he might consider that the comment coming from Sainsbury's is more about motivating employees.
My noble friend makes a good point. It is a factor of balance and I merely used the Waitrose example as a contrary to the Sainsbury's example. The range here is from £2,000 to £50,000. It is a significant shareholding to have £50,000 in a company, if you so wish it, so I think that this is set fair for a good future.
My Lords, does the Minister not accept that there is a difference between past employee shareholdings and a trade-off, which is what is proposed for employment rights? I suspect that our late colleague, Lord Bill McCarthy, would have asked a forensic question at this point. How does the Minister expect this scheme to run? Is it to be a one-off trading of all your employment rights or is there to be a sort of tariff, where you trade in flexible working for so many shares, maternity rights for so many more, the right to join a trade union for a few more and health and safety legislation for a few more than that? How is this actually going to work and what are employees being asked to sell?
As the noble Lord, Lord Whitty, knows, I normally have a high regard for his interventions but not in this case. The Benches opposite have to be so careful about bandying words such as "bullying" and talking about giving away employees' rights. Noble Lords need to read the text to understand that we are not giving away all employees' rights.
Noble Lords should read the text properly so that they understand that it is a limited forgoing of some rights in favour of having a tax-free shareholding in the company. That is gain and loss, up to a point, but it is only marginal.