Employee ownership finally gets the backing of the Government

After the "shares for rights" false start, will the Government get it right this time?

The current profile and success of employee ownership is unprecedented. Employee ownership is now being embraced as the most prominent alternative to the over-dominant PLC model.

Employee owned businesses are largely or fully owned by their workforces either through direct employee share holdings or shares held in Trust on behalf of and for the benefit of employees. Their workforces are very actively engaged in the management and development of their businesses. And economic competitiveness and high performance are a central part of the DNA of employee owned companies. The compelling success stories of employee owned businesses such as Clansman, Unipart and Arup demonstrate the very special nature of employee ownership.

More and more politicians, businesses and service commissioners are realising the contribution that employee ownership is making and can make to the growth agenda and to the delivery of world class public services. It is a realisation that employee owned organisations tend to achieve higher productivity, greater levels of innovation, better resilience to economic turbulence and have more fulfilled workers who are less stressed than colleagues in conventionally owned organisations. It is also a recognition that employee ownership works financially as over the last decade and more, investments in shares in employee owned businesses have considerably outperformed those in conventionally owned businesses.

This current interest in employee ownership has been reflected over recent weeks in two important initiatives.

Firstly the Treasury has completed its review into the taxation of employee ownership in the UK. Its conclusions, announced as part of the Chancellor’s Autumn Statement, are significant. The Autumn Statement argues that employee ownership is an important part of the UK growth agenda and explicitly confirms it as a business model that the Government supports. This is a powerful and unique endorsement of a part of the economy that contributes more than £30bn to UK GDP each year.

The Statement also undertakes to bring to the table the resources and expertise of the Treasury to work with other parts of Government to increase the number of employee owned businesses, to implement a package of simplifications to existing employee share schemes and to keep under review the possibility of introducing at the time of the next Budget further tax incentives to promote employee ownership.

Secondly, Government has accepted in full all of the recommendations for how to grow employee ownership in the UK that are contained in the recently completed Nuttall Review into the barriers to such growth.

The inaugural meeting of the group that is now accountable for the implementation of these recommendations, chaired by the relevant Minister Jo Swinson MP, has just taken place. This development brings a realistic prospect that a new future for employee ownership that many of us have been driving for will arrive. A future in which there is far greater awareness of employee ownership options, there is a simplification of those options and there is better access to finance and advice for businesses that want to implement and or fund employee ownership.

These two reviews, the Treasury and Nuttall Reviews, are ones that the Employee Ownership Association successfully pushed very hard for.

Their outcomes and the attendant commitments mark another important step along the way towards employee ownership becoming a central part of industrial policy, part of the mainstream.

Employee ownership is currently growing at an annual rate of around 10 per cent. Interest in it within business communities and amongst public service commissioners is increasing daily. The number of funders and advisors competent to engage in employee ownership is on the rise. These are exciting times.  The challenge ahead is to build on this momentum in pursuit of the big picture – 10 per cent of UK GDP delivered by employee ownership by 2020. With the right will and skill this is perfectly possible.

The Co-operative society circa 1929. Photograph: Getty Images

Iain Hasdell is the chief executive of the Employee Ownership Association the voice of employee owned businesses in the UK and a member of the Mutuals Task Force.

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What are the consequences of Brexit for the refugee crisis?

Politicians neglected the refugee crisis whilst campaigning – but they shouldn't now concede to the darker undertones of the debate.

In the chaotic aftermath of Brexit, the refugee crisis seems like a distant memory. Yet not even a year has passed since the body of a young Syrian boy washed up on a Turkish beach, shocking the world.

When campaigning for the EU referendum began, politicians neglected the crisis. Not because the situation had ameliorated, but because the issue had become strategically toxic. Nigel Farage's infamous poster aside, the Leave side preferred scare stories about economic migrants rather than refugees; the Remain side because the refugee crisis, more than anything else since its inception, highlighted the fragility of the ideals that underpin the European Union.

Many of the main issues aired in the course of the referendum debate were related to the refugee crisis, regardless of how little it impacted on them in reality; immigration, strain on public services, national identity. The refugee crisis became a proxy issue; implied, but not addressed, for fear of detrimental impact in the polls.

However, in his repugnant posters (it should be stressed, nothing to do with Leave campaign itself), Nigel Farage made explicit what he thought posed the greatest threat to the UK. Rightly, the posters have been condemned by both sides of the referendum debate, but the underlying suspicion of refugees it reflects has concerned many organisations.Their concern has only been exacerbated by the result of the referendum. The spike in hate crime compounds their fears.

Paul Dillane, head of UKLGIG, a charity that supports LGBTI asylum seekers to the UK, expressed unease at the reaction of his clients: “The asylum seekers I work with do not understand the decision that has been made – they feel vulnerable, they feel unwelcome. Yes the law hasn’t changed, and if they’re at risk of persecution, they will be protected. But they don’t feel like that now.”

Despite the troubling situation, the result of the referendum changes little when it comes to refugee law. “Refugee policy is shaped in London, not in Brussels”, said Stephen Hale, Chief Executive of Refugees Action. “The decision about how well we support refugees in terms of integration is a matter for the UK, not Brussels. The number of Syrian refugees we choose to resettle is a matter for the UK, not Brussels.”

Although the law may not have changed, from a diplomatic or political perspective, the same cannot be said. This does have the power to negatively impact legislation. Post-Brexit reaction in France surrounding the Touquet Treaty typifies this.

The Touquet Treaty, reached between the UK and France in 2003, permits each country to carry out passport checks on the other countries’ soil. It is what, according to French politicians in Calais, has accelerated the growth of the "Jungle", which currently accommodates close to 5,000 refugees.

Because the agreement was signed outside the auspices of the European Union, Brexit does not affect its legal legitimacy. However, for France, EU membership was crucial to the nature of the agreement. Speaking earlier this year, Harlem Desir, French Secretary of State for European Affairs, said the Touquet Treaty is “a bilaterial agreement. So, there will be no blackmail, nor threat, but it’s true that we cooperate more easily in both being members of the EU.”

Natacha Bouchart, mayor of Calais and a long-time critic of the treaty, has been vocal in her demands for legislative change since the result. Speaking to French broadcaster BGM TV, she said: “The British must take on the consequences of their choice. We are in a strong position to push, to press this request for a review and we are asking the President to bring his weight to the issue.” Some have adopted the slogan of the Leave campaign, telling them to now “take back control of your borders.”

Modification of the Touquet Treaty was branded part of ‘Project Fear’ by the Leave campaign. Because of this, change – if indeed it does happen – needs to be handled carefully by both the British and French governments.

The reaction of Natacha Bouchart is already a worrying sign for refugees. Firstly, it perpetuates the toxic narrative that casts refugees as an inconvenience. And secondly, any souring of relations between the UK and France over Brexit and the Touquet Treaty only increases the likelihood of refugees being used as political bargaining chips in the broader EU crisis over Schengen.

A divided government and disintegrating opposition do little to aid the situation. Furthermore, come October, how likely is a Brexit Tory cabinet – governing off the back of a manifesto predicated on reducing immigration – to extend the support networks offered to refugees? Even before the referendum, Theresa May, a supporter of the Remain campaign, said that Britain should withdraw from the European Convention on Human Rights, replacing it with the more questionable Bill of Rights.

Uncertainty of any kind is the most immediate danger to refugees. “Everyone is talking about it,” said Clare Mosesly, founder of Care4Calais. “But opinions on the impact are divided, which is creating yet more uncertainty.” Refugees, unsure whether Brexit will lead to increased fortification of the border, are prone to take ever more dangerous risks to reach the UK. Even economic uncertainty, seemingly distinct from issues such as the refugee crisis or immigration, has a negative impact. “The thing that worries me about a fragile economy”, said Paul Dillane, “is that when a country’s economy suffers, minorities suffer as well. Tolerance and inclusivity are undermined.”

The government must stress that the welcoming principles and legislation Britain had prior to Brexit remain in place. Andrej Mahecic, from the UNHCR, said “we will continue to rely on the UK’s strong support for humanitarian responses to refugee crises. Our work with the government on the UK’s asylum system and refugee resettlement schemes continues.”

The will from NGOs is there. The political will is less assured. In the aftermath of Brexit, the government must not concede to the darker side of the referendum debate.