Workers of the world unite, says George Osborne

CHANCELLOR George Osborne's plan for workers to receive shares in their firms if they give up employment rights last night drew a mixed response.

Chancellor George Osbourne
Chancellor George Osbourne

CHANCELLOR George Osborne's plan for workers to receive shares in their firms if they give up employment rights last night drew a mixed response.

The new “employee-owners” would receive between £2,000 and £50,000 of shares exempt from capital gains tax under the scheme set out in Mr Osborne’s speech to the Tory conference.

In return workers will give up rights on unfair dismissal, redundancy and the right to request flexible working and time off for training.

Mr Osborne confirmed plans to press ahead with £10bn in welfare cuts by 2016/17, while rejecting the “mansion tax” on expensive properties favoured by his Liberal Democrat coalition partners.

Under-25s look set to be stripped of housing benefit while unemployed parents may face cuts in support they get for additional children.

Lib Dem Deputy Prime Minister Nick Clegg said nothing had been agreed in detail on welfare cuts. North East Labour and Lib Dem politicians also expressed concern.

Mr Osborne said his shares-for-rights voluntary scheme would appeal to new businesses starting up and small and medium-sized firms requiring flexible labour and highly motivated staff.

Aides said the voluntary scheme would be open to any limited company. They expect hundreds of thousands of employees to sign up within the next few years, at a cost to the Treasury of around £100m in lost tax by 2017/18.

Ross Smith, head of policy at the North East Chamber of Commerce, said the scheme was an interesting idea but could be complicated to administer and a distraction to the need to boost growth.

North East Lib Dem peer John Shipley said: “Welfare cuts have gone just about as far as they can and we need to think very carefully about adding yet more.”

Tory MP James Wharton, who represents Stockton South, said there was scope for “significant” welfare cuts if implemented correctly – ensuring those needed help were protected.

But Nick Forbes, Labour leader of Newcastle City Council, said the welfare cuts would be “profoundly” damaging.

“The Chancellor’s remedy for the failure of austerity seems to be more austerity,” he said.

Mr Osborne said the rich would have to contribute to cutting the national deficit through the “ruthless pursuit of tax evasion” but claimed it was an economic “delusion” to think that was the sole solution.

“It is wrong that it’s possible for someone to be better off on benefits than they would be in work.”

The Tories would stand up for hard workers and ensure Britain could compete in the world, he said.

Plans to change the tax system to support development of Britain’s shale gas reserves – which some believe could help power Britain – were unveiled by the Chancellor.

Mr Osborne dismissed Labour leader Ed Miliband’s attempts to steal the Tory “One Nation” slogan. The Conservatives remained the true party of “one nation working together to get on”, said the Chancellor, who wielded the left-wing mantra “workers of the world unite” to launch his employee share scheme.


THE Government has won support at the conference for considering changes to the pay of public sector workers.

The Treasury is looking at whether to axe national pay bargaining for the public sector in favour of more local flexibility, which critics say will lead to lower pay for northern workers.

But the Government yesterday won backing at a fringe meeting.

Adam Marshall, director of policy and external affairs at the British Chambers of Commerce said: “What you see are private sector companies wanting to recruit the best and the brightest out of university or out of school.

“And they are crowded out immediately because a public sector managerial job will always pay more than that starting rung in the private sector locally.”

He warned against an overnight change to all public sector workers, but stressed the need for a “grown-up” conversation.


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