Companies that offer shares to their workers will receive tax breaks under proposals to be announced by Nick Clegg.

The Deputy Prime Minister has put forward plans to create a John Lewis style of economy, where businesses are owned by staff. He believes that this model increases morale and produces better performing firms.

According to the Daily Telegraph, the Liberal Democrat will say in a speech at Mansion House later today: “Firms that have engaged employees, who own a chunk of their company, are just as dynamic, just as savvy, as their competitors. In fact, they often perform better. The 1980s was the decade of share ownership. I want this to be the decade of employee share ownership.”

Proposals under consideration include giving workers a right to ask for shares at their place of employment.

Clegg has reportedly approached Chief Secretary to the Treasury, Danny Alexander, to look into the tax-arrangements for organisations that are employee-owned in order to offer an incentive. He also intends to investigate the regulation of these companies.