Workers will get right to buy out bosses under Labour rule

Ed Miliband is set to commit a Labour government to ushering in a new era of employee ownership

Miliband will argue that many entrepreneurs who decide to move on or retire would like to sell their business to their staff (Getty Images)

Employees would get the automatic right to club together to buy their company if it is put up for sale or floated on the stock market under moves being backed by Labour.

On Friday Ed Miliband will commit a Labour government to ushering in a new era of employee ownership as he seeks to regain the initiative following attacks on party policies from a succession of business chiefs.

Mr Miliband will argue that many entrepreneurs who decide to move on or retire would like to sell their business to their staff and that the policy would boost companies by tapping into the skills and enthusiasm of existing employees.

Under the Labour plan, employees would gain the statutory right to mount a bid for a firm which is being sold, wound up or floated on the stock market. Staff would be given advance warning and would be guaranteed the time to raise the money to match competing offers.

The scheme is part of a package of proposals which Labour insists will give employees and consumers extra influence over the operation of companies and services.

In an article for Co-op News today, Mr Miliband claims a Labour victory would mark “the beginning of a new culture of co-operative entrepreneurship in the UK, with a growing co-operative, mutual and employee-owned sector”. He writes: “This will help to raise productivity and ensure that more working people are able to reap the rewards of economic success.”

His intervention comes at the end of a difficult week for Labour which has endured damaging headlines over the antipathy of big business to the party.

The party’s troubles came under fresh scrutiny when Lord Noon, who has given hundreds of thousands of pounds to Labour, attacked Mr Balls for forgetting a business supporter’s name and Mr Miliband for forgetting to mention the deficit during his party conference speech last year.

“I cringed when Ed Balls forgot the name of a business backer and Ed forgot whole paragraphs from his conference speech. It is very embarrassing,” he told The Guardian.