Nick Clegg in employee ownership push

 

The Government announced moves today to promote employee ownership and make it easier for people to run their own business.

Deputy Prime Minister Nick Clegg said he wanted employee ownership to be normal, rather than a "eureka" moment.

He told a summit in London that he supported a culture shift to help people become their own boss.

Ministers have published a report on breaking down barriers to employee ownership in private firms.

Mr Clegg announced that an Institute for Employee Ownership was to be established.

He said: "We need to find the right levers to drive a kind of culture shift where going down the employee ownership route isn't a eureka moment, but is much more normal, commonplace.

"Not everyone wants to set up their own company, but we all know we could; we all know someone else who has.

"That's my aim for employee ownership too - another way to be your own boss.

"If we move towards some mechanism by which employees can trigger a request for employee ownership, as today's report says, a number of questions still need answering: What's the correct minimum number of employees needed to make a request? What are fair grounds for turning one down? Should they be allowed at any time, or just at a specific point in the business life cycle, like succession? And, crucially, is the best way to achieve this a new statutory right, or some other mechanism?

"So, in order to get the answer to these and other questions, we're launching a call for evidence.

"We'll gather the views of the sector as well as business and employees more broadly and we'll report back in the autumn."

He added that the banking scandal was a "timely reminder" that the UK economy desperately needed an injection of responsibility, and power in more hands.

Employee-owned firms have lower levels of absenteeism, higher productivity and smaller gaps between the pay of bosses and other workers, Mr Clegg said.

He also published new figures by Co-operatives UK, showing that the employee-owned sector was growing at twice the rate of the economy at large.

Employee ownership expert Graeme Nuttall, who wrote the report, said legal and tax complexities should be tackled.

"This task of knocking down the barriers falls to all in the employee ownership sector, as much as it does to government, and also to new audiences, who need to consider what employee ownership means and joins the growing number that believe employee ownership is a great idea," Mr Nuttall said.

He made a series of recommendations aimed at promoting employee ownership, including increased resources and research.

There was a "substantial" amount of evidence showing the benefits of employee ownership, such as business performance and staff well-being, the report said.

Obstacles included a lack of awareness and resources, and legal, tax and other regulatory issues seen as burdens, it was noted.

TUC general secretary Brendan Barber said: "The most successful companies are those which have good relationships with their staff and where employees genuinely feel involved with the running of the business.

"In these situations where workers feel valued and that their views matter, employee ownership can reap benefits both for the workforce and for businesses.

"The TUC welcomes the opportunity to contribute to the debate on how workers might start owning shares in the places where they work for the benefit of everyone."

PA

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