‘Rights for shares’ flop demonstrates wider crisis of creativity within the government

By Alex Bryan

This week it has come to light that George Osborne’s ‘rights for shares’ scheme has, two months before it is even due to begin, become an embarrassing failure for the government. It has been reported that only 6 companies have enquired about the plan, much lower than expected from a scheme which was deemed important and popular enough to star in the Chancellor’s speech to the Conservative Party conference.

When the policy was announced many, including myself, were sceptical, firstly of the chances of such a move boosting a dormant economy and secondly of the desirability of aiding businesses through the disempowerment and exploitation of their workers. The muted response to the policy shows that these reservations are widespread, and signals another failed attempt in the government’s search for growth.

With hindsight, it seems ludicrous that such a policy could have been given such a high billing, not only because of its limitations as a policy but also due to its rather traditional character. The general theory that restricting the rights of workers will enhance productivity and profits is steeped in history and, for a government (and specifically the leadership of the Conservative Party) which presents an image of modernisation and fresh thinking, rather staid.

The now entrenched divide between Conservative frontbenchers and backbenchers seems to be largely based on David Cameron’s process of ‘detoxification’, which involved the rejection of a number of key traditional conservative mantras. The Cameroons are often derided by those who do not regard them as ‘true’ conservatives, often to the point where backbench rebellions threaten government credibility.

It seems strange then that such an image would be maintained despite the central placement of such policies. However, this is not an issue of a backbench-frontbench divide. Rather, it is demonstrative of a wider crisis of creativity within the government at present. With the exception of a few ministers most departments have tended to continue presenting rehashed versions of old ideas, which have been embraced by Number 10.

The ‘rights for shares’ scheme was not only poorly thought through, it was disappointingly predictable. The specific implementation of the idea might be new, but the idea itself is far from it. This is not to say that all government policies must be entirely original, or that there is not something within political history that governments could learn, but that faced with the particular crises that are at hand, and with a government which trumpets the importance of innovation and entrepreneurialism from the rooftops, one might expect more interesting thought.

Even most of the policies floated in opposition to the government by their own MP’s are lacking in intellectual vim. The ‘Alternative Queen’s Speech’ floated by a group of Conservative backbenchers was more a 1913 vintage than a 2013, other than a sole sensible and interesting suggestion (to establish a maximum number of members of the House of Lords).

Sometimes though, backbenchers come up with better ideas. This week Nadhim Zahawi MP echoed Boris Johnson’s previous call for an amnesty of all existing illegal immigrants within the UK, saying that the move would be economically advantageous as well as electorally astute for the Conservatives. Writing for a conservative think tank aiming to increase the popularity of the Conservative Party among ethnic minority voters, Zahawi’s suggestion is clearly far from selfless, but it is still brave and worthy of serious consideration.

Unfortunately, the government distanced itself from the suggestions as quickly as it could. The fact that the government could promote Osborne’s ‘rights for shares’ policy so whole-heartedly and yet dismiss Zahawi’s idea without public discussion demonstrates the wider pattern of unimaginative policy. Before David Cameron came into office, he was aware that this could be a problem, and he tried to solve it by bringing in unorthodox policy guru Steve Hilton. Since Hilton’s departure, the problem has only become more pronounced.

The economic crisis, in both length and character, differs from any we have previously faced. Globalisation, climate change, international terrorism and energy crises have created a peculiar political environment, which will not revert to a fabled status quo. In times of trouble, it is imperative that leaders are creative and imaginative, thinking about problems without genuine openness and ingenuity. Unfortunately, at the moment, it remains to be seen whether our leaders are thinking at all.

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‘Rights for Shares’ is wrong for Britain

By Alex Bryan

In the Autumn Statement this week, Chancellor George Osborne outlined a series of proposed fiscal measures with the dual intention of trying to rebuild Britain’s economy and trying to hide his failure to do so to date. The overall tone of the speech was of sobriety – the extension of the ‘period of austerity’ for one more year and the acknowledgement of the missed debt target limited the Chancellor’s scope for political point scoring.

Some measures, such as the decision to halt the planned 3p increase in fuel duty in January and the 1% drop in corporation tax, were met with loud cheers from business groups. There was nothing in the speech to convert those who eschew the perceived necessity of austerity (that time has passed), and as such the newspaper response to the speech was divided entirely upon left-right lines.

The generally muted response has not been able to completely protect some of the more controversial measures from dissection however. One proposed measure from the batch is so controversial, so revolutionary, that it could sow the seeds for a complete re-organisation of labour relations in this country.

The plan outlined by Osborne is to give workers the option to give up some of their employment rights in exchange for a minimum of £2,000 worth of shares in the company. The gains made on these shares (up to £50,000) would not be subject to capital gains tax. The rights which could be sold would be unfair dismissal rights, statutory severance pay, work flexibility and some maternity rights. In short, some of the most important ways in which workers are protected.

The idea has predictably been met with opposition from the trade union movement, and, perhaps more surprisingly, also from businesses. Of the 209 companies contacted during the consultation stage of the policy, fewer than 5 gave their full support to the scheme. Businesses said that there would only be significant benefits for unscrupulous employers, and that for good employers the costs of the scheme would at least balance the benefits.

There are two levels on which the proposal is dangerous. The first is the effect it will have on workers. Whether people choose to give up their rights or not, it is not healthy for there to be a significant section of employees who are able to be dismissed, and generally mistreated, more easily than others. It is also difficult to see how regulation could ensure that the employer was not pressuring employees to sell their rights either when the price of shares is high, or when employers simply want their workers to be deprived of these rights. Currently labour laws state that it is illegal for employers to ask a woman if she is intending to have a child in the foreseeable future; that law would have to be extended to make sure that employers could not discriminate against applicants unwilling to sell their rights.

The more abstract problem with the policy is perhaps the most important one though. The very concept that rights can be sold is a vicious bastardisation of the entire concept of a ‘right’. A ‘right’ is meant to be eternal, immovable, something which a person has because their humanity demands it. Whilst maternity rights and right of unfair dismissal may not be universally applied and recognised, this does not stop them from being utterly central. It does not stop violation of them from being a violation of the worker.

The suggestion that by having the option to choose to give up your rights you are somehow empowered is monstrous. Voices on the right of the Conservative Party have been calling for a ‘liberalisation of labour laws’ since the election, and, if this proposal becomes law, they will have got their wish. Too often do those who seek to cultivate private sector growth see the sacrifice of the employee as a panacea.

Thankfully, it seems to be the case that the proposal will not become law; it has too little support from business for the Conservatives to launch it against what would inevitably be a whirlwind of opposition. The fact that such a thing could even be proposed should be enough to worry us though, and with 8 years left of projected austerity, it would be hopelessly optimistic to think that this is the last proposal we will see of this kind.