How Osborne's shares for rights scheme has flopped

Only six companies have enquired about the Chancellor's plan to allow workers to give up employment rights in return for shares.

The centrepiece of George Osborne's speech to last year's Conservative conference was his plan for employees to give up their rights in return for acquiring shares in their companies. While losing rights and protections, including unfair dismissal, statutory redundancy pay and the right to request flexible working, they would gain shares worth between £2,000 and £50,000.

The Chancellor said:

This idea is particularly suited to new businesses starting up; and small and medium sized firms. It's a voluntary three way deal. You the company: give your employees shares in the business. You the employee: replace your old rights of unfair dismissal and redundancy with new rights of ownership. And what will the Government do? We'll charge no capital gains tax at all on the profit you make on your shares. Zero percent capital gains tax for these new employee-owners. Let shares and become owners of the company you work for. Owners, workers, and the taxman, all in it together. Workers of the world unite.

The policy was attacked from all sides in parliament, with former Tory Scottish secretary Lord Forsyth describing it as "ill-thought through, confused and muddled", Lord O'Donnell, the former head of the civil service, declaring, "In the old days the price of slavery was 20 or 30 pieces of silver – is it now £2,000?" and crossbencher Lord Billamora memorably warning, "This is not just a dogs's breakfast, this is a mad dog's breakfast". Andrew Adonis noted that "The idea that depriving employees of these basic rights is somehow going to boost growth is not supported by a single employer I have met, let alone [an] employee".

It turns out that the government is having trouble finding any too. With just two months to go until the scheme launches, today's FT reports that only six companies have enquired about it.  The Treasury had expected thousands of employers to sign up, pencilling in lost capital gains tax receipts of £135m in the three years to 2017/18.

Responding for Labour, Chuka Umunna said: "It was a ridiculous policy that had the support of very few people indeed. It was condemned by business and by people on all sides and it should be dumped. I am not at all surprised that it has attracted little interest from businesses who on the whole do not want to rob their employees of their fundamental rights at work."

The government rather optimistically remarked that its "approximate estimate" is that "around 6,000 companies" could choose to use the scheme, adding that "it could be more, it could be less."

In the absence of a 1,000 per cent surge in interest in the next two months, it looks like it will be less.

A member of the PCS union wears a George Osborne face mask at a demonstration on Whitehall on June 27, 2013 in London. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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