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Mr. Bermingham: Has my hon. Friend considered the situation that could well arise in which a registered office is in a building occupied by firms of solicitors? He will no doubt have seen a sign listing company after company whose registered offices are in such a building. According to the promoters, under clause 3 they do not have to be separately rated. Does each of those companies, because the director and secretary are registered there, become a qualifying voter? If so, one block could have 50, 60, 70, 80 or 150 qualifying voters, all of whom would have a vote but none of whom would have any employees working in the block.
Mr. McDonnell: I understand my hon. Friend's point. I am not sure whether such contortion can be prevented. I would welcome the promoter's response to that point. Such multiple qualification could lead to abuse. It would be worth having a statement from the promoters about how that problem would be tackled. It may be tackled in the reform package that they have suggested, which falls outside the Bill. We may need to examine that problem in more detail.
Amendment No. 64 would identify the employee as the first reference and key to defining physical presence in the hereditament to gain qualification as a qualifying body. I accept that there are possibilities for abuse, as my hon.
Friend suggested, either with or without employees, but we need to state the principle of the employee being the key element.Amendment No. 26 would define "relevant employee" as
- a person whose principal or only place of work on the qualifying date is ordinarily the hereditament in respect of which the entitlement to appoint a voter arises and who works for that qualifying body.
There have been discussions about how difficult it would be to establish a company's employment resources. I appreciate the difficulties in establishing who the relevant employees are and whether a location is their principal or only place of work. I acknowledged that on Second Reading, but I think that we were too charitable because it is clear that companies can readily identify from their records who their employees are. Extensive employment records are required for statutory purposes, such as national insurance, taxation, tax avoidance, and health and safety. Employees can be traced, located, verified and associated with a particular company.
There is no difficulty identifying employees and relating them to firms. The difficulty is relating employees to fixed locations: that may be open to abuse. If so, we should perhaps introduce a location register similar to the electoral roll. It could be funded by companies seeking qualification. If they apply to be a qualifying body on the basis of having employees at a particular location, they could fund the registration of those employees with the City corporation. If the City corporation can produce an electoral roll for residents, I see no difficulty in ensuring an electoral roll for employees.
It is argued that, on the City corporation's estimate, about 250,000 employees commute to the City each day for work. That number of people would not be difficult to register. It may seem large, but it is the electoral roll of my borough and of most boroughs in London, so it is manageable. The onus should be on the companies seeking to be qualifying bodies on the basis of their employees. They should assist in the financing of an electoral roll based on employment.
Such a register would be verifiable, because anyone could compare the electoral roll of employees with national insurance, taxation or health and safety records. I do not accept the argument that it is an insuperable problem to define "relevant employee" and to ensure that that person has a principal or only place of work at that firm and that they are located within that hereditament.
Amendment No. 4 was not selected, so I shall pass it by. It would have excluded people associated with the sex industry. I am not sure why it was not selected, but I shall leave that to hon. Members' imagination. My hon. Friend the Member for Leyton and Wanstead wanted to show that the term "relevant employee" may have to be further
defined. We may want to exclude certain employment, and I understand that. We exclude people from the electoral roll because of their criminal activity.
Mr. Deputy Speaker (Sir Alan Haselhurst): Order. The hon. Gentleman is doing what he knows perfectly well he must not do. He said he would pass the amendment by, and he must pass it by completely.
Mr. McDonnell: I have passed the amendment by, and shall now deal with amendment No. 34, which states that a qualifying body may only appoint--I detest the word "appoint" and prefer the word "elect", which is why I have tried to amend other parts of the Bill--
Mr. Pound: There is no future for my hon. Friend in the Labour party then.
Mr. McDonnell: I hope that you did not hear that, Sir Alan. It was almost a compliment.
Amendment No. 34 would require that a qualifying body could appoint a voter only if it had conducted a ballot of its employees to determine the person appointed as a voter. As it stands, the Bill provides that a person appointed as a voter would probably be appointed by a decision of the board or by a director or chief executive, but we do not know, because it is not defined.
Mr. Bermingham: Does my hon. Friend realise that that creates one of the most alarming anomalies in the Bill? Say that the board of X Ltd. decided to appoint my hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) as a voter in the City of London and then by some mischance he gets himself elected to the corporation's board and the directors decide that they do not like him and take him off the voting list. He would lose his right to sit on the City corporation. Someone who is unelected and unaccountable would have disfranchised a human being and removed a councillor. I cannot see that being in accordance with the European convention on human rights.
Mr. McDonnell: I advise my hon. Friend not to stray into the issue of compliance with the European convention on human rights, because that may cause difficulties. The issue is about right of recall. Amendment No. 34 suggests that a ballot should be conducted to ensure that a person appointed as a voter is appointed on the basis of the wishes of employees in the relevant firm. As my hon. Friend says, under the Bill as it stands that person will be appointed on the whim of the firm, and his or her appointment can therefore be withdrawn on the same whim. Not only would that undermine the potential vote; it could undermine the individual's position and status if he or she were elected to the corporation of the City of London. It cannot be right for a company to have that power of veto and that right of recall.
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I am trying to ensure that there is an election by employees, because that would prevent an individual company from seeking to influence the corporation in respect of a point of policy that might have a direct bearing on its own operation. As far as I can see, the Bill
as it stands allows companies to exert immense influence on the appointment of voters, and therefore on representatives of the corporation.In earlier debates, concern was expressed about how, if we agree on a ballot of employees to nominate a voter, we can practically ensure that the ballot is fair, open and transparent and enables employees' will to be exercised fairly and democratically, without undue influence. It is always difficult to prevent the exercising of undue influence, but I do not believe that difficulties will be involved in registering the number of employees in a company in order to conduct a ballot to enable a vote to take place, either in the workplace or by post to employees' home addresses, so that those employees can decide who should exercise their votes and, in some instances, who should become members of the corporation.
The proposal relates to an earlier point, because it would be facilitated by a register of employees. It is not difficult to do that in the case of a population of 250,000, and it is surely not a problem to place such a duty on a company with a limited number of employees in order to ensure probity in the conduct of a ballot. It would remove the right to appoint from the chief executive or the board of directors, and would place that important right in the hands of those who work for the qualifying body.
Amendment No. 37 is consequential. The Bill suggests that if a hereditament spans more than one ward, it should be deemed to be in whichever ward contains the greatest part or structure. The amendment simply proposes that if a hereditament spans more than one ward, the decision on which ward it should belong to should be based not on the scale of the property holding, but on where the largest number of employees are. That would prevent a skewing of the balance.
Amendment No. 16 is also consequential. It suggests that the limitation in clause 3(6) is not necessary if the qualification is based on the number of employees, and would eliminate the limit on the number of votes that a company can exercise on the basis of the number of its employees. Amendment No. 17, in my name and that of my hon. Friend the Member for Leyton and Wanstead, would delete schedule 1, which, in its present form, bases the allocation of votes on property and is therefore superfluous. The amendment is slightly more radical than amendment No. 38, which would retain the schedule but would amend it to ensure that voters were appointed on the basis of the number of employees.
Amendment No. 40 would place a duty on the qualifying body to ballot its employees to elect the voter or voters. Amendment No. 51 would throw out the word "appoint". It is, I think, a reflection on the Bill that throughout it are references to appointing rather than electing. That is a stain on any Bill that purports to bring about democratic reform. The amendment would install the concept of election--the concept of democracy--where it should be. Perhaps in this debate it constitutes heady radicalism, almost reaching the heights of democratic socialism: it not only includes the word "elect", but would bestow the vote on the workers themselves.
Amendment No. 52, another consequential amendment, would remove the word "appointed" and insert the word "elected". Amendment No. 25 would abolish schedule 1. Amendment No. 53 would also remove "appoint" and
insert "elect". Amendment No. 54, a more moderate amendment to the schedule, would introduce a system whereby, rather than the current allocation of votes in relation to the value of property owned--£200 up to £20,000 of rateable value, over £20,000 but not over £1 million, and over £1 million--there would be an allocation based on the number of employees. I suggest that the association with rateable value should be replaced by a system of one vote for every 1,000 employees, and that they should be "relevant employees" physically based in the hereditament in which a company seeks to qualify for the vote.It has been argued that the residential vote might be swamped. Given an electorate of about 250,000 commuters coming into the City, that will not happen: the 2,500 votes will be allocated to companies on the basis of the number of their employees, and, with 5,000 residential votes, there will be no such swamping. I do not think that linking the number of votes to the number of employees on the basis of one per 1,000 is in any way intimidating in terms of the residential vote; I also think that my amendment would secure a balanced approach to the number of votes employees should have, on which businesses can then draw.
Amendment No. 56 is a similar consequential amendment that removes the reference to votes based on rateable value and installs the reference to the vote based on the number of employees.
At its mildest, my argument throughout the debate on this sub-group of amendments is that, if votes are to be distributed, the employees themselves must have their say, and that their right to have a say has been denied them until now; there has been no say for employees within companies.
If we are--I mean it sincerely--to build a stakeholder society, we will need to ensure that all the stakeholders are thoroughly involved. The Bill does not do that. The amendments go some way to ensuring that stakeholders are identified and provided with rights. I accept that with those rights come responsibilities; there is a responsibility of service. If one votes for a body, one is also entitled at some stage to stand for that body and to provide it with a service.
We discussed the stakeholder theme before the last general election and it was seized on by the Government. We developed it under new Labour and as part of the third way following Will Hutton's book "The State We're In." That seminal work opened and developed a debate about what a just society is. A just society is one in which we all have a stake. It is one in which we can make a contribution financially, in employment terms or, as some of us do, by participating voluntarily through voluntary organisations. In any democratic reform, those stakes, those contributions, should be recognised.
The amendments go some way to acknowledging the stakeholder society within the City corporation area. Almost unlike any other area, the City corporation is ripe for a stakeholder approach. It has a combination of residents and, thanks to City corporation funding, a strong and developed voluntary and community sector. Religious organisations and churches, which have been with us since mediaeval times, have also developed there, and there is the business sector. However, what has been
missing among all those groups of stakeholders has been the voice of the workers themselves--the people who spend most of their working day in the environment of the City.
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