Coalition presses ahead with discredited ‘shares for rights’ bill

Despite being rejected by the House of Lords recently, the coalition’s discredited ‘shares for rights’ scheme, which allows workers to give up basic employment rights in exchange for company shares, was passed in the House of Commons by a margin of 277 to 239.

Despite being rejected by the House of Lords recently, the coalition’s discredited ‘shares for rights’ scheme, which allows workers to give up basic employment rights in exchange for company shares, was passed in the House of Commons by a margin of 277 to 239.

Chancellor George Osborne in last year’s Autumn Statement originally announced the controversial Employee Shareholder clause 27, part of the Growth and Infrastructure Bill.

Unions, employment lawyers, accountancy companies and employee ownership organisations have all opposed the scheme.

Business minister Michael Fallon said the scheme would be “wholly voluntary” and unveiled a concession that he said would ensure that anyone on Jobseeker’s Allowance would not be sanctioned for refusing to accept a job offer contingent on participation in the shares-for-rights scheme.

Widespread opposition

However, the TUC’s Frances O’Grady said the decision not to accept the decision of the House of Lords as defying logic.

“This proposal should have been quietly killed off. It has no support among employers and was heavily defeated in the House of Lords by a wide coalition including prominent Conservative and Liberal Democrat peers,” she said.

“Employment rights should not be for sale. Employers do not want to buy them, and employees will not want to sell them. What is worse is that its only real practical use is as a tax dodge.”

Piling on the pressure, Phil Hall, special adviser for share ownership group ProShare, said it was “deeply regrettable” that the government had “refused to listen to the views of the majority of UK businesses, all of the representative bodies for the share ownership industry and the majority of Peers in the House of Lords”.

And Sarah Ozanne, employment partner at law firm CMS Cameron McKenna, said: “It’s curious just why Osborne is so keen to press ahead with this when the consultation showed only lukewarm support for it, even among employers”.

Besides the very principle of any government attempting to further weaken employment rights, the coalition have failed to heed advice on a range of issues connected with the hare-brained scheme.

Many employment lawyers have cautioned against it. Questions include how would company shares be valued and by whom. Equally, lawyers say there has been no thought given on how it could affect companies when raising funds or seeking injections of capital or in a sale of a business.

Unintended consequences

Many commentators say small shareholdings can create an administrative burden for businesses and employees will also require assistance in working out the tax implications of holding shares and accounting for future dividends and gains or losses.

As France O’Grady pointed out, the scheme may present an opportunity to those seeking to avoid tax in a climate when the government attempts to tighten up tax scams.

The issue goes back to the House of Commons on 22 April.

It is ironic that Osborne and the coalition business team (including Lib-Dems Vince Cable and Jo Swinson) are pressing on with a scheme nobody wants and plenty are counseling against, when the same coalition is willing to perform a rapid u-turn at the prospect of suburban neighbour vs neighbour disputes on the building of home extensions.

2 Responses to “Coalition presses ahead with discredited ‘shares for rights’ bill”

  1. The New Normal

    We get the government we deserve……………

  2. blarg1987

    Would be interested to know if the Chancellor will benefit from this proposal based on his parens company? If so then I think LFF should try and persue for corruption?

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