HC Deb 06 April 2000 vol 347 cc1138-40
3. Mr. Jeff Ennis (Barnsley, East and Mexborough)

What steps he is taking to promote the new all-employee share plan. [116602]

The Financial Secretary to the Treasury (Mr. Stephen Timms)

A number of steps have been taken. A thousand company representatives have attended presentations around the country on the new all-employee scheme, and further training events are being planned for employers. The Trades Union Congress is working with us to inform employees, and Members of Parliament are being sent material to help them to explain the advantages of the plan in the course of their constituency work.

Mr. Ennis

The scheme is fully supported by all trade unions. They have campaigned for it for years. Does my hon. Friend agree that it will greatly reduce the old "us and them" attitude that used to prevail among company bosses and their employees?

Mr. Timms

My hon. Friend is absolutely right. Encouraging employee share ownership enables us both to boost productivity and to promote fairness. We know from research that employee share ownership boosts productivity, but, as my hon. Friend pointed out, it also helps to ensure that the benefits of company success are spread fairly. The TUC has made an important contribution to the consultation, and I shall meet TUC policy officers this afternoon to discuss it.

The scheme is a clear example of our ability to build a modern economy and a decent economy at the same time.

Mr. Oliver Letwin (West Dorset)

When the Financial Secretary and his colleagues designed the brilliant new national insurance contribution for high-tech companies and their share prices, did they mean to tax success? Did they know that they were creating an unquantifiable contingent liability, which would appear on those companies' balance sheets? Are they aware that Oracle and other high-tech companies are now joining Cisco in the emigration queues, and what are they going to do about it?

Mr. Timms

As the hon. Gentleman knows, consultation is under way on employers' national insurance on share options. I am engaged in discussion with the firms affected about how best to solve the problem, and we expect to be able to present proposals sooner rather than later.

The hon. Gentleman mentioned Cisco. I am pleased to say that Cisco was an enthusiastic participant in a seminar that we had last week on how our welfare-to-work policies and programmes could be used to benefit the information technology industry. For that industry and, indeed, the whole economy, the economic success that we are currently enjoying is extremely good news.

Mr. Denis MacShane (Rotherham)

Is my hon. Friend aware of the warm welcome given to the employee share ownership measures in the Budget by organisations such as ProShare, Capital Strategies and Job Ownership? Although the last Government talked a lot about employee share ownership, they delivered very little. Is that not the big difference? We have really broken through.

A number of organisations are helping to promote employee share ownership. Could my hon. Friend have a word with the Department of Trade and Industry? Perhaps it could get on to the bandwagon, through the Small Business Service and its other agencies, to promote employee share ownership as an important new economic development building a partnership economy, as opposed to the two-class economy that the Tories have always supported.

Mr. Timms

My hon. Friend is right. There has been wide support for the consultation on the new plan, in which many firms, organisations and trade unions are taking part. This is a partnership effort, and the wide welcome given by the Confederation of British Industry and others to the details of the plan announced in the Budget testifies to the success of our approach.

Dr. Vincent Cable (Twickenham)

I welcome the Government's new enthusiasm for the long-standing Liberal policy of worker share ownership.

Does the Financial Secretary agree that the number of such schemes is so utterly derisory—1,750 companies are using them, out of millions—because of the convoluted, time-consuming procedures engaged in by the Inland Revenue in its valuation of unquoted companies? What does he propose to do to alleviate the problem?

Mr. Timms

We aim to double the number of companies that have an all-employee share scheme through the measures that we are taking. Many companies, particularly smaller ones, have welcomed the arrangements in the new plan. In finalising the details, we have taken account of the position of unlisted companies. They will particularly welcome the changes in the latest details that we have announced.