Nick Clegg set for 'John Lewis' economy

Deputy PM to flesh out plans for extended staff shareholding along lines followed by retail chain
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The Independent Online

Nick Clegg will this week step up his vision to create a "John Lewis" economy by fleshing out a scheme that could let staff buy shares in the company they work for.

The Deputy Prime Minister's "right to request" plan is a central plank in creating more employee or trust-owned businesses such as the revered department store group or the engineer Arup, where staff take a share of profits every year.

At an event at the London Stock Exchange on Tuesday, Mr Clegg is also expected to announce the creation of an Institute of Employee Ownership to advise firms on how to spread more equity among the workforce. It is due to be run by Graeme Nuttall, the lawyer who carried out a government review into barriers to wider staff ownership.

The plans are separate to those of George Osborne, who stoked anger at the Conservative Party conference last month by floating a plan for staff to gain shares in their company if they waived some of their hard-won employee rights.

Another review, by the Treasury, is exploring whether tax breaks could encourage entrepreneurs to sell their company to staff instead of another firm when they want an exit. Its results are due in the Chancellor's autumn statement on 5 December, and could be accompanied by changes to the capital gains tax regime.

Mr Clegg is keen to boost employee-owned businesses, which research shows are more productive and suffer less absenteeism, to foster more long-term thinking in the wake of the financial crisis. Currently, those firms make up a £30bn slice of the economy, or 2 per cent of gross domestic product.

Meanwhile Lord Heseltine's review of industrial policy is released on Wednesday at an event in Birmingham. The former deputy prime minister is expected to recommend bolstering local enterprise partnerships, the agencies that the Government has established to boost regional economies. In the 1980s, Mr Heseltine developed the policies that led to the construction of Canary Wharf and the regeneration of Liverpool.

Mr Clegg has been on a charm offensive with business recently. He told an audience of bankers, insurers and lawyers at TheCityUK's annual dinner at Mansion House last week: "Historically, the Liberal Democrats are a party of industrialists and small business; staunch advocates of free trade between open economies; long believers in the power of enterprise to help individuals fulfil their own potential, while serving society at large."