» rights for shares ¦ What You Can Get Away With

If you ever wonder why people think government consultations are just a matter of routine that they get out of the way before they go and do what they’ve always planned, then the Government’s response to their ‘shares for rights’ proposal (PDF file) won’t surprise you at all. It’s a masterpiece of setting out all the reasons people have objected to the policy and pointed out reasons why it’s not needed and why it won’t work, then blithely responding that the Government intends to press ahead anyway.

As the Guardian reports (and LabourList illustrates with nice graphs) the clear majority of responses were against the proposals, but the changes suggested within the government response are cosmetic at best.

It appears that yet again, ideology has trumped evidence, and George Osborne will be continuing to push ahead with this, regardless of the fact that almost no one appears to want it. The effort put into this could have been put into some real measures to promote employee ownership, mutuals and co-operatives, but instead we have this scheme which seems to be a way for unscrupulous employers to screw their employees out of rights in exchange for a few magic beans, or for rich investors and their ilk to find more ways to avoid paying capital gains tax.

What really annoys is that while the fingerprints of the Treasury are all over it, this scheme is being pushed by the BIS department, which is one with a Liberal Democrat Secretary of State and Minister. (Indeed, one of Jo Swinson’s first roles at the department was appearing in the introduction to the consultation) They surely must have seen the reaction that this has had from the party, so why did they not take the opportunity to kill it when they were given the tools to do so? Indeed, why were they even attempting to push it through in the first place (under the smokescreen that we supported employee ownership, so we should support this)?

There’s no evidence supporting this proposal, there’s clearly no will or desire for it, it’s not in the Coalition Agreement and has never been approved by the party conference, so Liberal Democrats in Parliament should have no hesitation in voting it down and removing it.

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The old yoke – The legacy of 1066 and speculation over whether the ‘green man’ seen in many English churches originated as an act of subtle rebellion against the Normans.
Men of aspiration – BenSix on the Pootercrats. “They are would-be intellectuals and sycophants: the hangers-on of men with bigger wallets; better friends and grander dreams for the advancement of their interests or ideologies. They sit on the advisory councils of think-tanks with swanky websites and portentous titles. They write columns that present ambitions of the powerful as if they are nothing more than splendid ideas. They jet off to conferences and might, if they’re lucky, have the chance to sit behind the jugs of water and say a few words.”
James Delingpole – not very good – One thing he is very good at, though, is as an example of logical fallacies, as Five Chinese Crackers explains.
Too late for two degrees? – A PWC report (pdf) on how we’re nowhere near making the level of cuts in carbon emissions needed to restrict warming to an average of 2 degrees C.
“Beecroft by the back door”: a practical guide to using the government’s “shares for rights” scheme to totally screw over your employees – Does exactly what it says on the tin, and points out just one way how ‘rights for shares’ can easily be abused.

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As the party leadership seems to have decided to acquiesce on the proposed new rules allowing employers to make employees give up employment rights in exchange for shares, it’s time to take some action. The Government has started a consultation on the proposal, and anyone can take part in it and submit their view. If you want to have your say, then go here and fill it in. As evidence of the fact they’re taking their time and considering the options trying to rush this through, you only have until the 8th November to respond.

The consultation asks a number of questions, and most of them are about the way the scheme could be implemented, rather than whether it’s a good idea or not, but it’s worth answering as many as you can as well as you can, just to ensure that they get a number of views. There’s no information on the site about what they’re planning to do with the responses, but I’m thinking that a Freedom of Information request sometime after 8th November could elicit some useful information about what sort of response was received.

I’d also suggest reading this post on this issue by Gareth Epps at the Social Liberal Forum. If you’re a Lib Dem member and you haven’t already, you can also add your name to this open letter to Nick Clegg and Vince Cable on the subject.

Only a week after George Osborne announced it at the Tory Conference, and we finally have a public comment from a senior Liberal Democrat on it. It’s Vince Cable who rides out with an article for Liberal Democrat Voice and as you’d expect from the renowned champion of the left of the party and former Labour member, it’s a resounding defence of workers’ right against any encroachment by the bosses.

Only kidding. This time, Vince’s cavalry aren’t riding out to save the day but to put the boot in by announcing that the Osborne plan is absolutely fine by him. Despite the fact that it’s about asking employees to give up certain employment rights, this isn’t Beecroft by the back door because:

That proposal would have applied to all employee contracts – this will only apply to workers at firms who want it.

So your employment rights are fine if your employer doesn’t want you to give them up, but if your employer insist that you have to give them up in favour of a few shares before you get a job, you don’t have a choice in that matter.

But don’t worry, everything will be alright because “it is not something intended for most ordinary businesses around the country.” Note the phrase there is ‘not intended’ – no one’s prohibited from taking it up, but it’s not intended that they will. However, it’s often the case that governments will create tax regulations that are only intended to have limited applicability, and then discover that lots of people realise that it’s a loophole they can take full advantage of as well. (See some of the discussion here, for instance)

But the main point remains that there’s a fundamentally illiberal heart to this policy, where we accept the idea that rights can be traded away (though in partial contradiction of Franklin’s maxim, here liberty appears to be being traded for insecurity). It’s an issue we should be fighting over, one that should be relegated to the Tory manifesto for the next election, not something Liberal Democrats should be rolling over, accepting and justifying.

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You can tell that Tories are in Government – suddenly, everything has a price and nothing has a value. After last week’s discussions over the ‘trade your employment rights away for a handful of magic beans shares’ proposal, we now have reports that Nick Clegg has been offered a deal over state funding of political parties in exchange for letting the boundary review go through.

What would be interesting to find out about this policy is who leaked it, because the very act of reporting it has made the likelihood of it happening drop down to effectively zero. It’s clear that certain Tories are desperate to resurrect the boundary review – though not so desperate as to allow Lords reform to take place, which tells you all you need to know about their actual commitment to democracy – but I don’t think there’s anything they could offer Clegg that would make the Liberal Democrats change their mind over it. Now that any change in that position – which was a slim chance anyway – would be linked to what looks like nothing more than a bribe, there’s no likelihood of that change occurring.

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There’s a very good open letter to Nick Clegg on Lib Dem Voice today, and it covers many of the points I wanted to make on the ‘shares for rights’ proposals George Osborne put forward this week.

The plan itself is bit of political game-playing by Osborne, in my opinion. The Tories have failed to get any traction for any of the Beecroft proposals on employment rights, so they’ve now switched to a different tactic. Employee ownership of companies is a good thing, and something – as Nigel Quinton points out in that LDV article – that the Liberal Democrats have pushed for. So, Osborne’s using those as a Trojan horse to hide his real aims in. By allowing some Treasury support for a version of employee ownership, he can cover the real aim of the policy which is to start chipping away at employment rights. Then once the principle of employment rights being universal has been surrendered, they can come back and look at removing them from others – maybe if employers don’t want to give away shares, they can offer employees a bit more pay for less rights, for instance – until they’re all but gone for everyone.

That’s why it’s especially galling to read that the party leadership appears to have fallen for the con trick and allowed this to progress. The press release on the Treasury website, the talk of consultation, the start date of April 2013: all of this points to something that’s been agreed at a high level, with Osborne given approval to announce at Tory conference as a Government policy, not a Tory proposal. Until Tim Gordon mentioned it in the briefing email that Nigel Quinton mentions, there’d been not a word on this from anyone high up in the party, when they’ve been hurriedly rushing to the media to condemn other Tory Conference wheezes. Indeed, given that Tim Gordon’s email misrepresents the scheme, one has to question just what is going on, and who’s giving who bad information?

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Today’s seen George Osborne give his speech to the Conservative Party Conference. As you might expect, there are many things in it that concern me, but I want to highlight two of them.

First we have the heavily trailed announcement that he wants to cut another £10bn off welfare costs by introducing more cuts and restrictions on who can claim various benefits. This, of course, is before we’ve even seen the impact the first wave of cuts in Housing Benefit and Council Tax Benefit will have, but then when did sense ever apply to an Osborne proposal?

This proposal has obviously caused some consternation, but there has been a firm line from the Liberal Democrats against this proposal. Sure, it started with ‘party sources’ saying it was bad, but now I’ve seen quotes directly attributed to Nick Clegg saying that nothing of the sort has been agreed, and Tim Farron making a clear statement of the same point.

However, there’s been another Osborne proposal that hasn’t been shot down and I’m actually worried that this has already been agreed to by the leadership without members even being consulted. It’s the ‘rights for shares’ proposal in which you would surrender various rights (unfair dismissal, redundancy payments etc) in exchange for being given shares in the company you work for. So, if the company goes belly-up you’re left with no redundancy and a bunch of worthless shares. Or if you’re unfairly dismissed, you can’t get compensation, but you can try and find someone interested in buying shares that will give them no control over a privately traded company. You won’t get a choice in this, either – employers will be free to offer contracts based on this with no alternative, so forget the idea that your employment rights in any way belong to you and that you have a choice whether to exercise them.

Some have attempted to claim that it’s a John Lewis-style model of employee ownership, ignoring the fact that staff at John Lewis keep their rights while being the sole owners of the company. This is much more Fifty Shades Of Grey – you might have a contract, but you’re still getting screwed.

It’s illiberal nonsense, and the sort of thing the Liberal Democrats should be shooting down before it’s even left the auditorium, but I’m worried that we’re allowing it to happen. As well as the announcement at the Tory Conference, it’s on the Treasury website, alongside the logo for the Department of Business, Innovation and Skills (where Vince Cable is Secretary of State). That, and the mention at the bottom of the press release that the Government will be consulting on this, makes me fear that this is already well on its way to the statute book.

Have the party leadership allowed this to happen? And will they let us know, or have they traded our rights away for a few magic beans?

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