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There is no embarrassment about the clause or the amendments. This Government consult and listen to the consultation. A number of points have been made about the clause. The amendments clears up some technical points that have been made as a result of the consultation on a proposal that is, as might be expected of this Government, ground-breaking and has not been considered by the House before.
Amendment 117 will require that the shares are fully paid up before being issued. That is important, because if the shares issued were not fully paid up, the employee owner would be liable for any balance relating to the value of the shares. If that were so, and if the company requested the outstanding amount, or if the company became insolvent, the employee owner would have to pay the outstanding amounts. That would not be fair. The amendment will ensure that the employee owner is not liable to pay any money for the shares issued. It is not the Government’s aim to require the employee owner to pay for the shares.
Amendment 120 will prevent the company from asking the employee owner to provide any other form of consideration, apart from agreeing to become an employee owner, for the shares issued to them under the scheme. The Government do not believe that the employee should pay for those shares in any other way, apart from simply agreeing to the arrangement, and the amendment makes that clear.
Amendment 118 will enable the employer company to grant shares in a parent company to employee owners. In some cases, the employer company may have little value and the Government do not want to prevent employer companies from granting shares in their parent companies—such shares might have more value—and the amendment enables that.
Amendment 124 will define consequently what is meant by “parent undertaking”, giving clarity to those many people considering using that status.
Amendment 123 will extend the type of companies that are able to use the employee owner status to include overseas and European companies. The Government intend to ensure that that status is available to all companies with share capital. The amendment will ensure that we are not inadvertently discriminating against European or overseas companies—I am sure that you will support this, Mr Davies—and will bring us in line with our obligations under European law.
I commend the amendments to the Committee.