Previous SectionIndexHome Page

12.19 pm

John Barrett (Edinburgh, West): I start where the hon. Member for Sheffield, Heeley (Ms Munn) left off by congratulating the hon. Member for Edinburgh, North and Leith (Mr. Lazarowicz) on giving us the opportunity to debate the subject. The Bill is a move in the right direction and, as my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) said when he set out in detail our approach, we welcome it.

Involvement in a company is a key that can open the door to a new way of working—a door that should be open to as many people as possible. For many people, the weekly pay packet or monthly salary is what work is all about. They have no involvement, no commitment and no responsibility for the future growth of the company, never feeling part of its decision making, which affects a large part of everyday life.

One of the facts of business life is that productivity must constantly be improved in order to survive. More efficient methods must be implemented or competitors will win the day. Often, innovation, team working and efficiency were driven by a very small team from the top down—by those who thought they knew best. That is no longer good enough. Companies must maintain the involvement of all employees.

Employees who have a shareholding in their company are more likely to want to develop an understanding of how the company works and to be involved in its progress and success. They are less likely to leave it to someone else to act when problems are identified that affect the company's strength. Hon. Members have mentioned unjustified absenteeism. When employees are involved strongly with their company, that is less likely to be a problem.

For 20 years, before being elected to this place, I was fortunate to have a stake in my place of work. I have worked with many who have owned all or part of a

18 Jan 2002 : Column 561

company, held shares in companies, or wanted to have a stake in a company but have had no stake in it. There is a clear correlation between increased involvement in a company and the drive needed to make the company succeed.

Anything that moves legislation in that direction must be welcomed. It will affect the lives of many people in a number of ways. The hon. Member for Plymouth, Sutton (Linda Gilroy) mentioned an Italian study that showed that increased company involvement resulted in improved health, education, lower crime rates and social participation. I look forward to studies of whether such involvement has the same results here.

When morale is declining in any company, the disfranchised feel that there is little they can do. Many lose interest and spend more time looking for another job than considering the well-being of their company. Work problems lead to health problems and health problems have an educational impact.

In recent years, the detachment of many employees from their companies has increased with the use of short-term employment contracts. In the past, often the assumption was that the job would last unless something unexpected happened. Nowadays, often the assumption is that the contract will end unless something unexpected happens. The result is reduced company loyalty, a work force on the move, and less commitment to a company. There is a short-term outlook in many companies and among employees, which is a major problem for British industry. If, as I believe it will, the Bill facilitates more involvement by more employees in more companies, people will be inclined to look long term. As many hon. Members have said, it is a win-win situation.

Share ownership is not suitable for all, as was mentioned earlier in comparing it with house ownership. Many who have bought homes have done very well. Indeed, in Edinburgh today, many people could not afford to move into their own homes at current prices, but buying a home brings costs and responsibilities for which people may not be prepared. The value of any investment can go down as well as up. There will always be people who want no more from their employer than a weekly pay packet. However, those who do want to play a part should be encouraged and enabled to do so. The Bill enables something that is not possible at present. There was possibly one negative contribution, but I was glad to hear positive speeches and interventions from hon. Members on both sides of the House. I hope that the Bill will go to Committee and be a great success.

Mr. Love: Does the hon. Gentleman accept that a significant number of employees who may be sceptical at the start of such a share ownership scheme become mobilised by the increase in their influence and the return that they receive from share ownership?

John Barrett: I could not agree more. Many employees think that share ownership is for other people, not for the likes of them. People will have to embark on a learning curve: once they discover the benefits that they, their company and their family can gain, the system will gain momentum. I wish the Bill success and look forward to Committee.

18 Jan 2002 : Column 562

12.25 pm

Mr. Iain Luke (Dundee, East): I am glad to be able to make a contribution to this worthy debate on the private Member's Bill promoted by my hon. Friend the Member for Edinburgh, North and Leith (Mr. Lazarowicz). I congratulate him on his success in the ballot.

I am well placed to pay tribute to my hon. Friend's commitment, having known him for 20 years. We first met at Edinburgh university, where I was studying for a post-graduate qualification in business administration, majoring in industrial relations. My first chance to enter an electoral contest was in the regional division of the then Lothian region, in Newtown-Stockbridge. I believe that it was my strong showing in that election that turned the corner for Labour in what had been an extremely Conservative part of Edinburgh, resulting in my hon. Friend's being returned as Labour MP at the last election and so getting the chance to introduce this Bill. We both served as leader of our respective city administrations, and we share an office in Millbank. In the light of all that, I am in a good position to comment on his collaborative and co-operative efforts.

Throughout that time, my hon. Friend has shown a strong commitment to the co-operative movement, which has strong roots in Scotland. I remember as a boy in 1950s Dundee queuing up at the local co-op to put in my book so that I got my messages delivered by the co-op, which was often the only retail outlet in the area. Sadly, such practices, as well as the dividend the co-op used to pay, have in many cases been lost, but we must give credit to the co-operative movement for coming up with new and innovative ideas, pressing them on Governments through elected Co-operative Members of Parliament, and furthering the ideals and spirit of the movement.

If successful, the Bill will further the progressive action taken or encouraged by Governments for the past 20 years and in recent Budgets. The positive comments of hon. Members on both sides of the House, including the hon. Members for Aylesbury (Mr. Lidington), for Kingston and Surbiton (Mr. Davey) and for South Norfolk (Mr. Bacon), testify to our commitment to stop indulging in "yah-boo" politics. Such positive views will help to lay to rest the conflicts that long beset the world of industrial relations.

We have lived through tumultuous times. I well recall the debates on "In Place of Strife". The Donovan report and the report of the royal commission on industrial democracy set some of the context of today's debate. We all remember the industrial relations courts at the start of the 1970s, as well as the three-day working weeks, social contracts 1 and 2, and the miners' disputes. The heavy-handed legislative approach of the 1980s and 1990s divided Britain right down the middle.

By way of contrast, I remember part of my first experience of teaching in further education. I had to explain concepts of business structure to new apprentices drawn from a wide range of trades; we discussed how they could set up business in an "enterprise" fashion, or using an alternative model. Teaching them for their city and guilds general studies exam involved a video that reviewed the development and workings of the Mondragon co-operative—an industrial complex in north-east Spain.

We are a long way from creating that sort of enterprise in terms of size, integration and contribution to the economy. However, the Bill's objectives are welcome,

18 Jan 2002 : Column 563

marking a rejection of the battle and conflict of old-style industrial relations and taking us a small step away from the old idea of "them and us". Through its three main objectives, it would extend the idea of co-operative productive activity.

First, the Bill extends the tax relief benefits already on offer to more companies and employees. That is obviously welcome because it gives more companies and more people the chance to be involved. There has been much discussion of the John Lewis Partnership and how, up to now, that has not been able to benefit from such a scheme. I hope that, in Committee, that advantage will be extended to that company, which has done so well in its endeavours for its work force.

The Bill makes it easier for companies to become full employee-owned co-operatives, but we have a long way to go. We should be doing all that we can to encourage such activity. But most importantly, the Bill encourages, enables and involves employee shareholders, on a collective basis, to play a greater role in the management of their shares held in trust and in the direction of the company that employs them; and thereby, however indirectly, to become more involved in the management and direction of the company which provides them with their livelihood and which often supports the livelihood of many in the neighbourhood in which the company is located. That will ensure that the business survives and makes a profit, which is important.

From the research done by my hon. Friend the Member for Edinburgh, North and Leith, it is evident that experience shows that where such schemes are in place, productivity, profits and worker satisfaction are greatly improved. In the cut-throat, competitive economic world of today, those are essential elements in the survival of many companies throughout Britain.

In my intervention I referred to the footloose attitude of multinationals. In the recent announcement by Levi Strauss in Scotland of the loss of more than 450 jobs in Dundee and 150 jobs elsewhere, productivity was one of the major reasons for the shell-shock proposals that have put so many jobs at risk after 30 years of successful production and profit making in Dundee. No one wants to wake up to discover that a company in one's locale is, in a matter of days and without real notice, in crisis. The first notice that I had in this case was a letter delivered here to the House of Commons on Thursday. That is something that hon. Members and their constituents do not wish to see and hope to avoid.

Not that Levi Strauss is a bad employer; on the contrary, it was a model employer, heavily involved, through the community development responsibility fund, in many worthwhile projects in Dundee and elsewhere. However the company's structure and the way in which it takes decisions, without any real input from its employees, creates the feeling of helplessness that I hope the Bill will help to counter; along with the helplessness felt by elected Members at our inability to influence corporate decisions in such company structures where employees are disfranchised because of the multinational nature of the operation. The disillusion in management and the productive process is something that we should be trying to avoid. We should be trying to encourage more participation by employees in good decision making for the benefit of the company. That is the crux of the Bill.

18 Jan 2002 : Column 564

I send my best wishes to the Secretary of State for Northern Ireland, my right hon. Friend the Member for Hamilton, North and Bellshill (Dr. Reid), who, with my hon. Friend the Member for Dundee, West (Mr. Ross) will be meeting the management of Levi Strauss this afternoon in Scotland because the plants are located in their constituencies. They will put the case for a lifeline based on the real improvement in productivity that the company has seen over a long period and the commitment of its work force. Hopefully, as I tried to stress earlier, in future we could look at ways in which to promote employee share schemes in multinational enterprises, thereby curbing their often footloose tendencies. However, that is for another day and another debate.

To conclude my brief contribution, I pay tribute to the commitment of my hon. Friend the Member for Edinburgh, North and Leith, a member of the Labour and Co-operative party, to the principles and ideas of the co-operative movement. The Bill may be small but, if successful, it will have an impact well in excess of its brevity. Its softly-softly approach, without the push for legislative requirements, is in the spirit of the co-operative movement. It certainly helps to close the gaps in employee share ownership between us, our European neighbours and the United States. Most significantly, it continues to build on the all-important bridges that establish links between employees and employers, between the managed and the management, and between capital and labour which, historically, has often been beset by struggle and conflict in this country. If the Bill achieves that goal, it will be to the benefit of all concerned.

I wish my hon. Friend all the best in his endeavours to get the Bill into Committee and on to the statute book. Like other Members, I think that there will be a lot of discussion and argument about its final details. I would be happy to help my hon. Friend in any way that I can, although I am not a great expert on tax or fiscal measures.

Reference has been made to the political slogan of the Conservative Government of the 1980s and 1990s to do with trying to create a small shareholder democracy, under which council houses were sold off up and down the country. Much of the privatisation programme was sold to the public under that banner. The Bill tries to create a shareholder work force—a point strongly made by the hon. Member for Aylesbury (Mr. Lidington)—with a genuine share in business decisions and business. That is a commendable and hopefully achievable aim.

The Government are keen to promote the creation of a true stakeholder economy. We could look at models for such activity, as has been said, including models for allowing football fans to have much more involvement in the shares of club companies. One of my own city teams has been racked by a share problem; the old directors were sacked by new directors, and the fans had no real say in what happened. We could also allow tenants with a long-term involvement in housing a greater say in the direction and control of the organisations that provide their accommodation; there has not been a great deal of work on housing trusts.

I hope that the Government support the measure, and shall be glad if the Paymaster General says that she and the Government do so in her summing-up. Finally, I thank you, Mr. Deputy Speaker, for allowing me to make a brief contribution to the debate.

18 Jan 2002 : Column 565

12.38 pm

Next Section

IndexHome Page