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Stephen  Bevan

Trading Shares for….a P45?

Authors: Stephen Bevan Stephen Bevan

10 October 2012

Mr Osborne managed to avoid using the word ‘growth’ even once in his speech at the Conservative Conference this week. Yet, as the IMF pointed out in their report the day after, this is something which the UK and other developed economies are likely to be short of for a few months yet. Instead the Chancellor focused his attention on other measures which he seems convinced will unleash entrepreneurs from the bureaucratic constraints which are holding them back.

His proposal that employees should sign away some of their employment rights in return for shares was especially eye-catching but, in my view, sends very mixed messages. I always thought that employee share ownership is supposed to give people a stake in the business they work for and make them more committed to its long-term future. However if, to get access to these shares, they are expected to collude in making it easier to sack them I’m worried that this will undermine the commitment and loyalty the proposals claim to encourage.

The Coalition seems fixated on the myth that the UK labour market is over-regulated and that making it easier to sack people will encourage job creation (a topic very eloquently dealt with by my colleague Ian Brinkley a few weeks ago ). Frankly, I would prefer to see measures which grow demand in the real economy than eye-catching supply-side gimmicks which few, if any, business are seeking out.