How the Tories have cursed Employee Share SchemesOctober 15 2015
The CWUYouth and my own personal Twitter feeds have been humming this morning with outrage about Chancellor George Osborne’s enthusiasm for employee’s giving up employment rights in return for shares in the companies in which they work.
I do think this is a major turning point, but perhaps not in the way that Mr Osborne’s fans and critics feel.
For the Chancellor to effectively attach strings to employee share schemes marks the abandonment by the Conservatives of a fundamental principle that has driven them from the 1980s onwards – a vision of Britain where everyone is a share-owner. That was part of the lure of large scale privatisations in the 1980s. Conservatives and also some on our side of the political divide have seen this as a good thing in and of itself. Now it seems you can only have employee shares if you foresake employment rights! This is a significant change.
But, as with so many of the announcements we are hearing these days, it simply doesn’t make sense as an idea.
Not all firms have shares. Many are private, non-share or very limited share companies. And some of the leading firms, the John Lewis Group being the obvious example, are founded on more co-operative “mutual” lines, and their staff are not employees, but “partners”. Then there is the question of what you do about thousands and thousands of “SMEs” (Small and Medium Enterprises) which is the dominant type of employer in the UK economy these days who may not have nor want a share-owning workforce. And that’s not to even start to think about public corporations who of course do not have shares.
We should also remember that workers already own large chunks of UK industry through the pension funds that own many businesses – funds built on workers’ pension contributions. Why would we want to buy something we own already?
Employment rights are also a very different thing from employee shares. Perhaps the most important way in which they are different is that they are founded not just in national but international law. The sort of employee rights George Osborne says workers should give up echo or mirror provisions of the European Convention on Human Rights and treaties of the International Labour Organisation – treaties to which the UK government is a signatory.
In contrast, employee shares are rather less well established in international law. It is also hugely insulting to trade union members to suggest, as the Chancellor has done, that you can only be a truly, loyal, diligent employee, a) if you own shares in the enterprise in which you work and b) if you give up employment rights.
The CWU’s members work in over 60 companies and all of them recognise that the success of the company they work for is necessary to provide job security and improving terms and conditions of employment. That’s why there is such frustration when we perceive there is bad management.
And it is also somehow implicit that companies where, in this nirvana, employees have given up employment rights for shares that those employment rights will not be needed. It’s as if Mr Osborne thinks that these companies will automatically be happy, well managed companies where there is no need for the sort of protection current employment rights give. That is dangerously and disingenuously naive – bad management and commercial misfortune can occur anywhere in the economy which is precisely why the comprehensive platform of employment rights are needed as a key part of a dynamic economy.
So all in all I would say it wasn’t a good day for George and Dave. Their flagship policy has more holes than Swiss cheese and they failed to keep Boris off the front pages. A as for “workers of the world unite” as a repost to “one nation Labour”, that looks like desperation to me, not innovation. Marx wouldn’t be turning in his grave, he would be creased up with laughter.