Rights for Shares: No Mandate, Unwanted, Rejected

Michael Fallon

George Osborne has maintained his stance to weaken worker protections in exchange for shares. In doing so he exposes himself as utterly undemocratic, and highlights the need for the unions to regain some strength. 

The latest chapter of the undemocratic tale that threatens to shred hard-earned worker protections is about to reach a conclusion. The Lords have just voted for a second time to reject plans to swap protections for shares, a policy rejected by business as unworkable and unwanted.

The process began when David Cameron asked Adrian Beecroft, a venture capitalist; a funder to the Tory party and investor in pay-day lender Wonga, to write a report on ways to grow the economy. The report focused largely on how difficult it is to dismiss someone, and that the process 'makes it too easy for employees to claim they have been unfairly treated'.


This point is a nonsense as in comparison with many other European states, the UK has a low rate of employment litigation as stated in a reportcalled 'A review of employment dispute resolution in Great Britain'. Tribunal claims increased largely once the recession kicked in and this was not the fault of those left in poverty through losing their jobs.

Consultation
The idea to remove rights for shares appears to have spun off from the Beecroft report, which in turn led to a consultation – a now useful tool abused by politicians to pretend they are listening when in reality they have already made up their mind.

In this case, the consultation which included individuals from small and large companies rejected the policy almost wholesale. Accountants Grant Thornton who is heavily involved in public sector work respondedto the consultation with this:

‘Our view is the people most likely to benefit from these arrangements are very senior employees who do not rely on their statutory rights for their job security/protection.’

On the question of whether their organisation ‘would take up new status?’ the response was even more damning.

‘Our organisation has a commitment to social justice and gender equality…we would not use Employee Owner contracts of the kind described in the consultation as they involve a loss of fundamental employment rights…’

East Leeds Citizen’s Advice Bureau also made it clear that large swathes of the employment sector would not participate:

‘It seems highly unlikely that ethical employers will use a scheme which undermines fundamental employment rights.’

We would hope and expect ethical employers to not participate but so flawed and nasty is this policy, big business is also rejecting it. Justin King the boss of Sainsbury’s tolda grocery industry conference "The population at large don't trust business. What do you think the population at large will think of businesses that want to trade employment rights for money?...This is not something for our business."

Rejection…so what!
The changes were not mentioned in either coalition party manifesto, they have no democratic mandate and in addition the consultation results have been utterly ignored.  So what!

The official response to the consultation said "A very small number of responses welcomed the scheme and suggested they would be interested in taking it up," Michael Fallon the Conservative MP for Sevenoaks who led the explanationand amendments on the Growth and Infrastructure bill in the Commons said "This government consult and listen to the consultation…There will be guidance on the operation of the scheme. It is a new one and that is why, perhaps, it has not yet been universally acknowledged or as widely supported as it might have been. ".

The arrogance of a government that chooses to ignore everyone and then suggest they listen is unfortunately par for the course. They are deeply undemocratic and through their behaviour weaken democracy.

Lords kick it out
The government has now seen the Lords kick out the policy for the second time with the Liberal Democrat peers unified with Labour in rejectionof the bill unlike their Commons counterparts. The fact that it has got to this stage is of deep concern and it must be asked at what point will it take for the unions to come out on strike in protection of these fundamental protections? This attempt to remove rights in a dramatic fashion and yet protests have been limited to 15-minute protests.

The next stage will see further concessions put to the Lords, but the bill should not have arrived at this point in the first place. Our democracy is under attack, our rights threatened and unless the workers reclaim the power required to stand up against these most arrogant of people, then we can wave goodbye to the protections fought for with blood and tears.

The Mucky Business of Wonga

It takes a certain kind of person to run a company that takes advantage of people in desperate times, to squeeze money out of them when they have nowhere else to go. The kind of person who would do such a thing should be admonished by society for preying on the needy. However, this government sees him as a person to go to for advice and to send senior advisers to lobby on the company's behalf.

Adrian Beecroft invests in Wonga, a loan shark company that charges 4214% Annual Percentage Rate on loans. A loan of £100 over 40 days will cost you £47.12 extra to pay back. Wonga recognises itself as expensive and says so on its website: ‘It's a bit like using a taxi to get around - it's not economical if you use one too frequently, but paying a premium for speed, convenience and flexibility in the short term makes perfect sense from time to time.’

Neither Labour nor the Conservatives have been willing to bring an end to loan shark lending over the years, and so companies like Wonga are allowed to flourish, trebling their profits from £12.m in 2010, to $45.8m in 2011, with an increased revenue of £185m. Governments of course are reluctant to stop loan sharks because if companies like Wonga weren’t allowed to make the 6 million loans they have made since 2007, then there would likely be an increase in social unrest.

However, rather than tackle inequality with progressive measures that redistribute wealth or lower outgoings, such as a cap on rent, both parties have allowed rampant capitalism to spread inequality and leave loan sharks to take further bites off the misery of others and add to their financial burden.

So how are major investors in Wonga treated?

Well Adrian Beecroft was asked by David Cameron to produce a report, which promoted the ease with which employers could sack their staff. The report came about following its leak by the Telegraph, and could not have been more hateful if it tried. His main argument focused on how difficult it is to dismiss someone, and that the process 'makes it too easy for employees to claim they have been unfairly treated'.

However, in comparison with many other European states, the UK has a low rate of employment litigation as stated in a reportcalled 'A review of employment dispute resolution in Great Britain'. Tribunal claims increased largely once the recession kicked in and this was not the fault of those left in poverty through losing their jobs.

As always in this deeply corrupt system, the reason why this government like Beecroft so much is because he gives them money, and lots of it. Since 2006, according to the electoral commission, Mr Beecroft and his wife has given the Conservative party £693,076, a handy sum, which included £50,000 to maintain the first past the post system. No wonder then Vince Cable should say he was opposed to the "ideological zealots who want to encourage British firms to fire at will". He was of course right, the attacks on workers conditions had no research to back up his argument that such measures would improve the economy.

Mr Beecroft admitted in his report that 'the downside of the proposal is that some people would be dismissed simply because their employer did not like them.' His lack of empathy for employees is clear and becomes more apparent when in his next line he wrote: 'While this is sad I believe it is a price worth paying...'

If anything making people more fragile in their employment will make people spend less, hold on to what they have in case their employer decided to get rid of them. This all fits in with the mentality of the neo-con's frequenting parliament and pushing for policy change dreamed up by their neo con counterparts in think tanks like the Adam Smith Institute. The book 'Unchained Britannia' which came out recently and was written by 5 neo con MPs, called British workers 'among the worst idlers in the world', adding incorrectly that 'we work among the lowest hours, we retire early and our productivity is poor.' Ideally they would like to see all our rights removed so we can become slaves to the financial elite that these people aspire to be. 

Morality is not something this government cares about, they are in power to simply snatch and grab the public services they can get their hands on, and hand them over to the corporations they are employed by or they own. No wonder then that Jonathan Luff, a senior adviser to No10 should join Wonga’s government affairs team and lobby on behalf of their dubious business.

The appointment will mean there will be no restrictions on loan shark companies in this government’s time, and given the amount of money Beecroft has given to the deeply corrupt Tories, it was hardly likely to happen anyway.

The question is will Labour do anything about it themselves when and if they get into government, and if not, why not?