|Employee Share Schemes Bill
This speech was given in the chamber of the House of Commons on 18 January 2002
Mr. Richard Bacon (South Norfolk): I shall be brief. I want to make two or three points, if I can remove the frog from my throat. It has become fashionable in my party to have a frog in the throat, and I am trying to adopt the style of the Front Bench. I shall also try to make myself understood.
Many constituents have written to me about employee share ownership, including eight partners in the John Lewis Partnership. I am delighted to support the Bill. The John Lewis Partnership has several excellent stores in my area, including Bonds, a department store in Norwich, and two branches of Waitrose, one of which is in my constituency. They provide a superb service to local people in Norfolk as well as employment for several hundred people.
Mr. Joe Mooney, one of my constituents who is a partner in the John Lewis Partnership, wrote:
"I believe the John Lewis Partnership is a successful retailer because it is owned by its employees, who care about the development of their business today and for future generations. The Bill - "
which he has asked me to support:
"is seeking not only to make it easier for companies to become employee-owned, but also to improve the position of existing employee-owned companies. These improvements will include tax exemptions on shares given to employees by their company."
It seems odd that companies such as Asda and Tesco -competitors of the John Lewis Partnership - are able to take advantage of those tax exemptions in helping their employees, while good firms such as the John Lewis Partnership are not. Hon. Members on both sides of the House have referred to the John Lewis brief, and asked whether it would be possible in practice for the company to provide liquidity to an internal market for the shares. I think that, with 55,000 employees across the country, that ought to be possible.
The hon. Member for Kingston and Surbiton (Mr. Davey), who is no longer in his place - I dare say he has gone off to write his press release, or to find another use for the 1p - made the point that part-time employees can play a long-term role in a company. I think that that is right, and there is no reason why these problems should not be sorted out in Committee. We ought all to unite in supporting the principle in the Bill of wider employee share ownership.
I confess to having a lot of sympathy with the criticisms made of the actions of my party in the 1980s in introducing schemes that benefited only some, rather than all, employees. Manifestly, something that is introduced because it is of benefit to certain classes of employee ought, by its very nature, to be available to all employees. The former head of the Prime Minister's policy unit looks as though he wishes to intervene. I give way to him.
Mr. David Miliband (South Shields): Does the hon. Gentleman share my pleasure in an example of a change of attitude in South Shields? It exemplifies the shift that he has talked about, from rewarding only those at the top of the company to rewarding everyone throughout. For 11 weeks last autumn, a major employer in my constituency was in receivership. During that time, a management buy-out team was brought together and I am delighted to say that in December a new company, Circatex, was launched. The first thing that the new management did was to introduce a 30 per cent. employee share ownership scheme for the new company, as a way of showing their commitment to the employees and saying that they were there for the long term. They wanted to reward the employees, many of whom had been with the company for 10 or 20 years, and make them part of the company's future. Does the hon. Gentleman hope, as I do, that that represents a change of attitude for significant parts of British management, as well as for those in the House?
Mr. Bacon: I agree with the hon. Gentleman that that is representative of the change in attitude. In fact, there has been a sea change in attitudes generally. I enjoyed what I might almost call the Thatcherite speech by the hon. Member for West Bromwich, West (Mr. Bailey). I used to go to West Bromwich as a small boy to watch its football team; it did not seem to be a bastion of Thatcherism in the late 70s. In fact, I joined the Conservative party because of Red Robbo, whom I am sure the hon. Gentleman remembers well.
There has been a change in attitudes, and that is most welcome. It is extraordinary that anyone should suppose that these incentives would not be sought by all kinds of employees, and I am very pleased to support the principle of the Bill. We have nothing to fear from diverse forms of capital ownership. That could mean ordinary shareholding in the traditional western capitalist sense. I am delighted to see my hon. Friend the Member for Cities of London and Westminster (Mr. Field) here in full battle dress.
Mr. Mark Field (Cities of London and Westminster): I think the full battle dress will appear after lunch. My hon. Friend will be glad to know that my luncheon activities are being catered for. May I also say that I very much agree with the Bill? It seems that the John Lewis Partnership's employees around the country have been lobbying us all furiously, because I, too, have had at least half a dozen letters from a similar source.
Mr. Bacon: I have noticed that, any time after about 4 o'clock, the likelihood is that I shall find my hon. Friend in a dinner jacket, limbering up for his evening activities, usually with the King of Jordan or somebody like that. The rest of us have to slum it in the Terrace caff.
We have nothing to fear from diverse forms of capital ownership. That could mean ordinary share owning, co-operatives, employee trusts or mutuals. I acted for a mutual building society for some months; I was seconded to it three days a week. Hon. Members may remember when the Britannia building society faced a most unwelcome challenge from a demutualisation campaign. If anyone doubts the benefits of what is sometimes described as the nebulous trade known as public relations, I would refer them to the photographs that occasionally appeared in the tabloid newspapers of that mad butler, Mr. Michael Hardern, wearing a dress, under the rather suggestive headline:
"This is the nutter who wants to run your savings."
That alone justifies the existence of the public relations industry, because that campaign helped to ensure that the Britannia, now the nation's second largest building society, thrives to this day as a conscientious local employer in regions across the country, and one that takes great pride in being involved in the community.
Reference was made earlier to the business of profit-related pay, and to its being discredited. I have not examined the issue in detail, but it would not surprise me if it had not worked as well as it was supposed to because, in a funny sort of way, this question is not mainly about money. Money is obviously important, but this is mainly about people having control over their own lives. The hon. Member for South Shields (Mr. Miliband) referred to the company in his constituency. In a previous incarnation, I used to write about management buy-outs and management consultants helping companies that were on the brink to climb out of that position. Nearly always, the solution involved drawing in the entire work force and making them work with one purpose towards success.
Mr. Love: Does the hon. Gentleman agree that we will really have seen the revolution that people have been talking about today when companies that are not on the brink of bankruptcy or in financial difficulties involve their employees, without the spur that bankruptcy provides?
Mr. Bacon: I could not agree
more with the hon. Gentleman. I find it difficult to understand why
managers would ever think of introducing an executive share option
scheme that would be available only to them and those close to them, and
not to everyone else. The Government should seriously consider ways of
making it more beneficial for companies to have schemes that involve
everyone, rather than involving only some employees. I would be strongly
in favour of that. The principle of employee share ownership deserves
the widest support on both sides of the House, and the Bill definitely
deserves a Second Reading.
|© Richard Bacon 2010|