PART-TIME WORKERS: MISCELLANEOUS PROVISIONS (Hansard, 4 April 1995)

§ Sir George Young
I beg to move amendment No. 16, in page 143, line 30, leave out from 'words' to end of line 32 and insert a full-time employee" there shall be substituted "an employee".'.

§ Madam Deputy Speaker
With this, it will be convenient to discuss also Government amendments Nos. 17 to 21.

§ Sir George Young
In Committee, when we debated new clause 5, on part-time workers in employee financial participation schemes, I said that we proposed to table amendments to the clause on Report. These are the amendments that I promised. As I said in Committee, they are designed to ensure that the provisions in the clause about the inclusion of part-time workers in financial participation schemes will apply only to part-time employees and not to part-time directors.
I explained in Committee why we had decided to amend the clause in this way. The clause is designed to open up financial participation schemes fully to part-time 1574 workers following the House of Lords' decision in the case of Regina v. Secretary of State for Employment ex parte Equal Opportunities Commission and another.
When we were planning the legislation, we believed that, to treat part-time workers fairly and in accordance with the House of Lords' decision, it was necessary to treat all workers alike, whether they were employees or directors.
After further consideration, however, and in the light of representations from institutional shareholders, we were satisfied that we could properly take part-time directors out of the new clause altogether, without conflicting with the House of Lords' decision. We thought it right to do that, because there is a distinction between part-time directors and part-time employees. The personal interests of a company's non-executive directors, in particular, should not be too closely tied to the company and its share price if they are to bring a measure of independent judgment to the company's affairs.
The amendments mean there would be no change at all in the present treatment of part-time directors in relation to any of the tax-relieved schemes. In particular, they will remain unable to participate in approved executive option schemes and qualifying employee share ownership trusts.

§ Mr. Andrew Smith
The Financial Secretary has accepted our arguments in Committee, although at the time he was unable to accept the form of our amendment to achieve the objective that the Government are now achieving through amendment No. 16.
We welcome the amendment. It was always wrong to imagine that it would have been acceptable to extend the opportunities of the tax breaks on executive share options to part-time directors. I shall agree that the Government have conceded to the advice that they have received from institutional investors if the Financial Secretary will concede that they have also given ground to the upsurge in public concern on the matter and to the vigorous campaign waged by my right hon. and hon. Friends in the Labour party.
The amendment represents one small step towards reforming the potential abuse of the schemes that we have debated elsewhere in the Bill; therefore, we welcome it. It is wrong, however, that the Government should ever have entertained for an instant the idea of extending tax breaks on executive share options to part-time directors. We are glad that the Government have conceded to the pressure that the Labour party has mounted on the issue and we support the amendment.