HC Deb 28 April 1981 vol 3 cc642-3
Mr. Cadbury

asked the Secretary of State for Employment whether he has any further plans to encourage firms to introduce profit sharing and employee share schemes in the interests of improving industrial relations.

Mr. Waddington

I have repeatedly stressed to employers the importance for industrial relations of developing effective arrangements for greater employee involvement and drawn to their attention the important role which employee share schemes can play in such arrangements in appropriate circumstances. Tax concessions to encourage such schemes were introduced in the Finance Act 1980 and my right hon. and learned Friend the Chancellor of the Exchequer has no plans at present for further changes.

Mr. Cadbury

I agree with my hon. and learned Friend that employee share schemes play an important role in improving industrial relations and getting responsible wage bargaining. Does he agree that now is the time for the Government to give further inducements to companies to introduce such schemes, because these will play an important role in preventing a wages explosion as the economy moves out of recession?

Mr. Waddington

I appreciate the force of what my hon. Friend has said. He, in his turn, will appreciate that what he has said is more a matter for my right hon. and learned Friend the Chancellor of the Exchequer. I agree that it is most important that we should appreciate the gain that can come throughout industrial relations from better communications and financial participation.

Mr. Alton

I support the hon. Member for Birmingham, Northfield (Mr. Cadbury). Does the Minister agree that it would be useful to publicise the scheme more, because although more than 300 firms have already qualified for the scheme, many more do not know about it? Is the hon. and learned Gentleman aware that a publicity scheme by the Department would induce more firms to take up the benefits that can accrue?

Mr. Waddington

The hon. Gentleman has played his part in publicising the scheme. I am sure that note will be taken of his remarks. I shall bear in mind what he has said. My right hon. Friend has often spoken in the country about the importance of employee financial participation. I assure the hon. Gentleman that we attach the greatest importance to it. However, in the last resort, the initiative must come from industry.

Mrs. Dunwoody

Will the Minister explain to the workers in such a scheme that if they invest their savings—as workers did in a scheme in my constituency—and something goes wrong, they will lose not only their jobs but their savings?

Mr. Waddington

I should have thought that that was obvious. What we are now discussing is a scheme which is an expansion of one introduced by the Labour Government whom the hon. Lady supported. It is common ground between both sides of the House that advantages are to be gained from financial participation.

Sir David Price

Would not my hon. and learned Friend agree that, desirable though profit-sharing schemes are, if a company has a poor profit record or poor industrial relations, to introduce profit-sharing schemes compulsorily—as I understand the Liberal Party proposes—would not improve industrial relations but would aggravate them?

Mr. Waddington

My hon. Friend is suggesting that there is no case for the Government to pass legislation. Such a scheme must depend on the circumstances in each company. All the Government can do is to publicise the available opportunities so that companies, having studied the advantages and what is on offer, can make the correct decision.