§ 1. Mr. Jim Cunningham (Coventry, South)What assessment he has made of the effectiveness of regional conferences held to promote his new employee share ownership scheme. [121370]
§ The Chief Secretary to the Treasury (Mr. Andrew Smith)The conferences went very well, with over 1,000 companies taking part. The scheme was well received. We expect a lot of firms to take part and more than 500,000 employees to own shares in their companies for the first time.
§ Mr. CunninghamWill my right hon. Friend tell us whether there is a size limit for the small companies that can participate in the scheme? More importantly, what benefits will the labour force get out of such a scheme?
§ Mr. SmithThe scheme has been designed—through consultation with companies, the Trades Union Congress, financial advisers and academics—to be flexible in responding to the needs of small companies. As for the benefits for employees, for the first time they can set aside money from pre-tax income to buy shares. Those can be matched by the employer with up to two free shares for every one that is bought. On top of that, employees can be awarded up to £3,000 worth of free shares a year from their employer; the amount can be performance related.
440 As my hon. Friend implies, the real benefit derives from the link between the participation of workers who identify with their firm and the benefits to the productivity of individual companies and the whole economy.
§ Mr. Desmond Swayne (New Forest, West)So why does the Chief Secretary devalue the potential value of the shares by the huge burden of regulation that he is imposing on the relevant companies?
§ Mr. SmithWe are not devaluing the shares. Conservative Members would do well to put aside their churlish criticism and welcome the scheme as a huge boost for a shareholding democracy, in which they used to claim that they believed. In practice, they are obsessed with share options for the few, while we provide shareholding for the many.
§ Mr. Denis MacShane (Rotherham)In that spirit of bipartisanship, has my right hon. Friend read the extravagant praise that the shadow Chancellor showered on the British economy? He used the sort of sycophantic language that even the most on-message Labour Member would not dare employ.
Does my right hon. Friend agree that employee share ownership should command support from all parties, unions and employers? Previous Conservative Governments initiated moves in that direction and we are building on them. The House should unite and support it so that it is a big success in Britain.
§ Mr. SmithI agree wholly with my hon. Friend. Compared with the shadow Chancellor's statements about the strength of the economy, we have been modest in our claims. There should be a bipartisan spirit about the scheme. I hope that all hon. Members will welcome the huge extension of shareholding to many employees who were previously denied that opportunity.