Lib Dems step up plans for more employee ownership

A press release from BIS brings the news:

Responding to recommendations made by Graeme Nuttall in his independent review of the sector, the Government has approved plans for a range of activity that will help to grow the number of businesses that become or convert to the employee ownership model.

The plans include assessing whether to establish an independent Institute for Employee Ownership, an ‘off the shelf’ model for setting up an employee owned business, work to examine the guidance on tax issues relating to employee ownership, a guide for staff and employers to request and agree an employee ownership takeover and work with the John Lewis Partnership to examine the barriers to funding for private sector employee owned companies.

Deputy Prime Minister, Nick Clegg said:

“Businesses that are owned by their employees produce more, grow faster, keep their workforce happier, and pay staff more fairly. Graeme’s report makes clear that sharing ownership means sharing success.

“Our economy suffered a massive heart attack – now we have to build our strength back up. To pump oxygen back into the system and get Britain working again, it’s got to be out with the old and in with a new more diverse economy that is fairer for all.

“The plans we’re setting out today are the first important steps in boosting this burgeoning sector.”

Jo Swinson said:

“There has never been a more important time to create the right environment for different ways of running a business. Employee-owned companies have proved to be flexible and resilient during tough times, and have a clear role to play in securing long-term economic growth. So I’m very pleased to be taking the first steps to implementing Graeme Nuttall’s recommendations.

“Graeme set us a challenging agenda and our response is equally ambitious. We will address one of the biggest barriers to take-up of employee ownership schemes: awareness that it exists. We will improve access to the information and help people understand what they need to start up and run an employee-owned business. And we will clarify what practical steps businesses need to take in order to become employee owned, as well as encouraging more business owners to consider it. We will develop helpful toolkits for employees to use when requesting employee ownership, and to help employers when agreeing to it. Our action plan will boost employee ownership in the UK and help give new impetus to a business model we want to see thriving across the country.”

* Mark Pack has written 101 Ways To Win An Election and produces a monthly newsletter about the Liberal Democrats.

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5 Comments

  • Will employees be required to give up rights in return for a stake in ownership?

  • Peter Bancroft 1st Nov '12 - 9:08am

    It’s great that this model is getting talked about at the Cabinet table, but the sheer number of initiatives here makes me worry that it’s primarily about the press release and about spending a few tens of millions of state money rather than actually achieving anything.

    The one interesting proposal was around an “off the shelf” model which assumes the current legislation makes the JL type model very difficult. I’m not actually convinced that’s true, but it’s probably worthwhile checking.

    On the other extreme, having Whitehall civil servants look into how businesses can source funding has to be one of the least possible value-add activities they could do.

  • Stuart Mitchell 1st Nov '12 - 7:39pm

    Try telling the John Lewis cleaners what a wonderful business model this is :-

    http://www.independent.co.uk/news/business/news/knowingly-underpaid-john-lewis-hit-by-cleaners-protest-7888976.html

    Badly paid and treated, and completely excluded from the windfalls enjoyed by others who work in John Lewis stores.

    There’s nothing romantic about the John Lewis brand of capitalism – it’s just the same old story of rampant inequality.

  • Stephen Donnelly 1st Nov '12 - 9:08pm

    I don’t have a problem with the announcement, but I doubt that it will amount to much in practice. It irks me that so many of the party’s initiatives seem to at least be partly based on the assumption that private industry is somehow undesirable, and that other forms of ownership may be better.

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