Osborne's "employee-owner" plan is Beecroft through the back-door

Remember "fire-at-will"? It's back! In co-op form!

George Osborne's plans for an "employee-owner" scheme, announced today, may sound familiar to people who care about employee protections. That's because we've heard much of it before, when it was announced by Tory donor and venture capitalist Adrian Beecroft.

The plan is described by the Treasury as a "new type of contract":

Employees will be given between £2,000 and £50,000 of shares that are exempt from capital gains tax. In exchange, they will give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required provide 16 weeks’ notice of a firm date of return from maternity leave, instead of the usual 8.

Crucially, while the status is optional "for existing employees", any company can chose to offer only that type of contract for new hires.

In other words, for the princely sum of £2,000 of equity, companies can completely and permanently buy out their employee's protections again unfair dismissal and redundancy, and their rights to flexible working and time off for training, as well as severely curtailing their maternity leave flexibility.

The last time we heard changes to employment law of this magnitude was the publication of the Beecroft report, the raft of employment law reforms suggested in May this year. The report, when published (ahead of schedule, due to leaks), was ridiculed for the complete lack of evidence to support its assertions. Clive Hollick, the co-founder of IPPR, wrote that Beecroft had told him his recommendations were "hearsay", based only on what he had been told, while Helen Lewis spotted that "the words “I” or “my” appear 20 times in 16 pages, while the words “research” or “studies” don’t feature at all."

Shortly after, many of the proposals suggested by Beecroft were implemented by Vince Cable – but not, notably, the fire-at-will provisions, which were blocked by the Liberal Democrats, with Cable saying he was opposed to the "ideological zealots who want to encourage British firms to fire at will".

Five months on, and the proposal is back on the cards. But this time, the government wants the public to think that employers aren't getting something for nothing. Whereas a switch to everyone's employment rights looks rather nasty, a negotiated switch between employers and employees is much fairer. And being paid £2,000 for your rights looks like a downright good deal.

Except it's not. Even if the £2,000 was in cash, upfront, and negotiable, it would still be a comparatively small amount (it is, for instance, less than four week's wage at the median full-time salary, although it stretches further due to its tax-free nature). And the provisions contain a number of measures which make it even more preferable for employers, and less for employees.

The minimum value of the shares required to be given is £2,000, but there is a nasty hidden in that. The Treasury writes:

The Government consultation on the owner-employee contract will include the details of restrictions on forfeiture provisions to ensure that if an owner-employee leaves or is dismissed, the company is not able simply to take the shares back but is able to buy them back at a reasonable price.

The £2,000 in shares the employee holds may be bought back "at a reasonable price" if the company decides to dismiss them. For non-listed companies (precisely the "fast growing small and medium sized companies" at which the initiative is aimed), this price will be extremely hard to determine. And if an employee thinks they've been short-changed, their only option is to take their employer to court; always tricky for someone without a job, and trickier still if the Government's plan to introduce fees for employment tribunals goes ahead.

The new rules are an attempt to introduce Beecroft back in through the back door. For £2k, you will be expected to sell your rights. No wonder Beecroft wrote:

This is a creative and exciting version of proposals that I made in my report.

There is, though, one last twist to the story. Dan Davies, of Crooked Timber, has been tweeting about the other implication of offering up to £50,000 shares tax free: if you're thinking of starting up a private firm, it could let you get away with not paying much tax at all.

The founders of a company rarely need much employee protection; and since they are also the ones who choose how much the shares are "worth", it might be extremely easy to end up owning large proportions of a new company with permanent tax-free status. A similar dodge was used by Mitt Romney; his retirement savings, which could only accept $450,000 in nominal shares during his years at Bain Capital, are now worth over $21m. When you say how much a company is worth, limits don't count for much.

Osborne's crafted a plan which, at a stroke, gives employers the ability to dodge tax on their companies, while dodging the responsibilities they have for towards their employees. It's almost impressive. 

The Old Street roundabout, an area full of tech startups hoping to benefit from Osborne's scheme. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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I can’t follow Marie Kondo's advice – even an empty Wotsits packet “sparks joy” in me

I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

I have been brooding lately on the Japanese tidying freak Marie Kondo. (I forgot her name so I typed “Japanese tidying freak” into Google, and it was a great help.) The “Japanese” bit is excusable in this context, and explains a bit, as I gather Japan is more on the case with the whole “being tidy” thing than Britain, but still.

Apart from telling us that we need to take an enormous amount of care, to the point where we perform origami when we fold our underpants, which is pretty much where she lost me, she advises us to throw away anything that does not, when you hold it, “spark joy”. Perhaps I have too much joy in my life. I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

After a while I gave up on this because I was getting a bit too happy with all the memories, so then I thought to myself, about her: “This is someone who isn’t getting laid enough,” and then I decided that was a crude and ungallant thought, and besides, who am I to wag the finger? At least if she invites someone to her bedroom no one is going to run screaming from it, as they would if I invited anyone to my boudoir. (Etym: from the French “bouder”, to sulk. How very apt in my case.) Marie Kondo – should bizarre circumstance ever conspire to bring her to the threshold – would run screaming from the Hovel before she’d even alighted the stairs from the front door.

I contemplate my bedroom. As I write, the cleaning lady is in it. To say that I have to spend half an hour cleaning out empty Wotsits packets, and indeed wotnot, before I let her in there should give you some idea of how shameful it has got. And even then I have to pay her to do so.

A girlfriend who used to be referred to often in these pages, though I think the term should be a rather less flippant one than “girlfriend”, managed to get round my natural messiness problem by inventing a game called “keep or chuck”.

She even made up a theme song for it, to the tune from the old Spiderman TV show. She would show me some object, which was not really rubbish, but usually a book (it may not surprise you to learn that it is the piles of books that cause most of the clutter here), and say, “Keep or chuck?” in the manner of a high-speed game show host. At one point I vacillated and so she then pointed at herself and said, “Keep or chuck?” I got the message.

These days the chances of a woman getting into the bedroom are remote. For one thing, you can’t just walk down the street and whistle for one much as one would hail a cab, although my daughter is often baffled by my ability to attract females, and suspects I have some kind of “mind ray”. Well, if I ever did it’s on the blink now, and not only that – right now, I’m not even particularly bothered that it’s on the blink. Because, for another thing, I would frankly not care to inflict myself upon anyone else at the moment.

It was all a bit of a giggle eight years ago, when I was wheeled out of the family home and left to my own devices. Of course, when I say “a bit of a giggle”, I mean “terrifying and miserable”, but I had rather fewer miles on the clock than I do now, and a man can, I think, get away with a little bit more scampish behaviour, and entertain a few more illusions about the future and his own plausibility as a character, when he is squarely in his mid-forties than when he is approaching, at speed, his middle fifties.

Death has rather a lot to do with it, I suppose. I had not actually seen, or touched, a dead body until I saw, and touched, my own father’s a few weeks ago. That’s what turns an abstract into a concrete reality. You finally put that to one side and gird up your loins – and then bloody David Bowie snuffs it, and you find yourself watching the videos for “Blackstar” and “Lazarus” over and over again, and reach the inescapable conclusion that death is not only incredibly unpleasant, it is also remorseless and very much nearer than you think.

And would you, dear reader, want to be involved with anyone who kept thinking along those lines? I mean, even if he learned how to fold his undercrackers into an upright cylinder, like a napkin at a fancy restaurant, before putting them in his drawer? When he doesn’t even have a drawer?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war