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.