I am grateful to my hon. Friend. We have never specified the type of company that is most likely to take up this new status, but obviously younger companies at the beginning of their lives will be able to use this status at a time when they might not be able to pay their staff more than competitor companies, or those already established in the marketplace. They will therefore have an extra edge to offer to those individuals whom they wish to recruit. We have had much interest already from such companies, who see the new status as an exciting way to motivate their new work forces.
Protections for people do not end there. The Bill confirms that someone can be an employee shareholder only if they are given at least £2,000 worth of shares, and if they are not, the person will not be an employee shareholder and will have all the normal employment rights that are associated with employees.
Clause 27 also stipulates that a person can only be an employee shareholder if they receive fully paid up shares. This means that the employee shareholder will not be liable for any debts should the company fold. Of course there will be circumstances where an employee shareholder leaves the business. It should be apparent from all that I have said that it is not the Government’s intention that employee shareholders are left with shares that they can sell back to the company only at prices that are unfair or where the buy-back arrangement would leave the employee shareholder at a financial disadvantage if there is no other way of disposing of the shares for value.
On Report in this House, we introduced an amendment to make a power to allow the Government to set a minimum value for the buy-back of shares if the company and employee shareholder enter into a buy-back agreement. That reserve power will be used, if it is needed, to safeguard employee shareholders in the unlikely event
that employers behave unscrupulously. By including these protections we are ensuring that individuals understand the implications of employee status and are genuinely free to decide whether to accept it. No one can be pressurised, bullied or coerced into accepting this new status.
With this announcement of further explicit protection for jobseeker’s allowance claimants, I urge hon. Members to disagree with the other place and reinsert clause 27 into the Bill. The new employment status gives young companies in particular a new option that they can use to attract high-calibre individuals to help grow their business. It is important that we give companies that choice, but it is also important that we give people this opportunity to share in the growth potential of the company they work for. The clause should be part of the Bill.