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Clause 23 - Employee owners

Part of Growth and Infrastructure Bill – in a Public Bill Committee at 12:45 pm on 6th December 2012.

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Photo of Andrew Stunell Andrew Stunell Liberal Democrat, Hazel Grove 12:45 pm, 6th December 2012

I want to speak to amendments 115 and 116. Throughout proceedings I have approached the Bill in a spirit of helpfulness, and I hope Ministers would accept that. Today, I am going to go up a gear and try robust helpfulness, which is why I have tabled the amendments.

We heard a lot of negative words when taking evidence, and, of course, the consultation has revealed the same lack of support for this proposal. It is fair to say that the CBI was at least polite about it, describing it as a “niche” product. My issue, and the point I wish to make with my amendments, is not really about whether the proposal is good or bad overall. Social enterprise is not for everyone, co-ops are not for everyone, and employee share ownerships are not for everyone, so I am not concerned about it being niche. I am not concerned about it being useful in only a small minority of cases, for instance, IT start-ups or other, perhaps professionalised, businesses where it is really a route into partnerships. That is fine and does not give me any difficulties, as long as it is safe and secure for those who use it.

My questions, like my questions to the Minister at our evidence session, focus not so much on what happens if nobody uses the scheme, but on what happens if it becomes more commonplace, particularly if it becomes more commonplace where the power relationship between the employee and the company is unequal. As the hon. Member for Edinburgh South said, employers want to ensure that their employees do not just contribute to the business, but feel enjoyment and fulfilment from their work. That is commonly the case, but we must recognise  that it is not universal. In the evidence session, I put a question to the Minister of State relating to the possibility that a cleaning company, with staff employed at a very low level, may decide to transfer to the new structure. How would that be dealt with? He replied:

“I obviously understand that concern. No one wants to see employees pressurised into making a choice that may not be in their own best interests.”––[Official Report, Growth and Infrastructure Public Bill Committee, 13 November 2012; c. 9, Q5.]

In the light of my understanding of where the Minister wants the Bill to be, I have tabled two amendments that deal with two different situations, and I want briefly to explain them.

The first relates to an employee who receives an offer while employed by that company, but does not wish to take it up. The amendment provides for the Secretary of State to make regulations, or to provide codes or advice to establish clearly that an employee who enters into a voluntary agreement will not suffer any consequential detriment.

The second, amendment 116, deals with a very different situation when a vacancy is advertised by such a company, and the jobcentre sends an individual to attend a job interview at that company, the individual is not content to accept the job offer on those terms and returns to the jobcentre saying that they have not accepted the job. The current situation is that that would lead to a suspension of benefits, because it would be a refusal to take up employment. Amendment 116 specifies:

“The Secretary of State shall issue such guidance as is necessary to provide that refusal to enter a voluntary agreement…shall not be grounds for reducing…any state benefit”.

The Minister may properly and correctly say that neither amendment captures the issue in the necessary legal language, but the House and the other place will want to be assured that the intention behind my amendment has been fulfilled before the Bill finishes its course through Parliament.

I hope that the Minister can give me an assurance on, if not the words in the amendment, what words, and how to secure what we all want. Obviously, I want to hear some words from the Minister today, and I will be happy with some assurances, but Ministers and circumstances change, and assurances given in Committee may not transfer to the desk at the jobcentre in Stockport when one of my constituents finds that their benefits have been suspended. They may not transfer back to the situation when a small company in my area decides to transfer to the new scheme and a constituent in my office is saying that they have consequently been disadvantaged, and perhaps even dismissed for failing to take that on.