The House of Lords has voted to delete clause 27 of the Growth and Infrastructure Bill, which would introduce the new employee shareholder status.
Despite the Chancellor's announcement in the Budget that there would be a tax break for employee shareholders, the House of Lords voted on the same day to delete clause 27. Lord Pannick, who introduced the amendment, commented that "concern about Clause 27 is not a partisan issue. It is a question of the damaging effect that this clause will have on employment relationships, on industrial harmony and through the power it will confer on bad employers. Since the Government have declined to listen, it is time for noble Lords to put Clause 27 out of its misery".
The concept of giving up employment rights in return for shares has been particularly controversial since it was first proposed by the Chancellor in October last year. It is perhaps unsurprising therefore that the House of Lords has rejected the proposal. The Bill will now return to the House of Commons so it remains to be seen whether the clause will be reintroduced.