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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Five of Scotland’s most exciting general election battles

Will unionists hook the big Salmond in Gordon? And can the Tories overrun the Scottish Borders? Everything's up for grabs. 

In 2015, the Scottish National Party won Scotland in a landslide. With the next election expected in 2020, politics for the next five years looked homogenous, managerial and predictable. 

But then came Brexit, talk of a second independence referendum, and an early election. Now everything's at play. Depending on your perspective, this is a proxy indyref2, or a chance to condemn the Brexit government, or the opporunity to turn Scotland blue. One thing is sure - local contests will not just be about collecting the bins on time, but about the great constitutional questions of the day. With a giant splash of egotism. 

Here is my pick of the constituency battles to watch:

1. Who’s the biggest unionist of them all?

Constituency: East Renfrewshire
Battle to watch: Blair McDougall (Labour) vs Paul Masterton (Tory)

If anything symbolised the #Indyreffightback, it was the toppling of Jim Murphy, the Labour MP for East Renfrewshire in 2015. Murphy had slogged away for the No campaign during the 2014 referendum, braving egg throwers and cybernat centurions to make the case for the UK in 100 towns across Scotland. Being ousted by the Scottish National Party’s Kirsten Oswald was the biggest metaphorical egg of them all. 

Still, Murphy only lost by 3,718 votes. The self-styled defenders of the union, the Scottish Tories, have spied an opportunity, and made East Renfrewshire a target seat. Paul Masterton, a local activist, hopes to follow in the footsteps of Jackson Carlaw, who snapped up the same area for the Tories in the Scottish parliamentary elections last year. 

But who’s that appearing on the horizon? Blair McDougall, the former Better Together chief, is waving Labour’s banner. And no one can accuse him of flip flopping on the independence question. 

Since quashing a second independence referendum is the priority for pro-union voters of East Renfrewshire choose, they are likely to vote tactically. So which candidate can persuade them  he’s the winner?

2. The best shade of yellow

Constituency: East Dunbartonshire
Battle: Jo Swinson (Lib Dem) vs John Nicolson (Labour)

When Jo Swinson first won her home constituency in 2005, she was just 25, and by her early thirties, she was pacing the inner sanctums of the Coalition government. But in 2015, East Dunbartonshire voters decided to give her an early retirement and opted for the former broadcaster, the SNP’s John Nicolson, instead by 2,167 votes. 

In England, the Lib Dem surge has been fuelled by an emotional Europeanism. Swinson, though, can sing “Ode to Joy” as many times as she wants – it won’t change the fact that Nicolson is also against Brexit.
So instead, the contest is likely to come down to two factors. One is the characters involved. Nicolson has used his media clout to raise his profile – but has also been accused of “bullying” STV into dropping its political editor Stephen Daisley (Nicolson denies the claims)

The other is the independence referendum. East Dunbartonshire voted 61.2 per cent to stay in the UK in 2014. If voters feel the same way, and vote tactically this time, Nicolson may wish to resurrect his TV career. 

3. Revenge of the Tories

Constituency: Berwickshire, Roxburgh and Selkirk
Battle: John Lamont (Tory) vs Calum Kerr (SNP)

And the winner is… anyone who can reel off this constituency name without twisting their tongue. Let’s call it BRK, or Project Blue. 

BRK, a rural constituency in the Scottish borders, was once a comfortable home for the Liberal Democrat Michael Moore. He was driven out in 2015 by the SNP’s Calum Kerr. Indeed, such was the political turmoil that Moore slumped to third place. Kerr’s biggest rival was the conservative John Lamont. 

Two years later, the electoral horns are sounding, and Lamont is so confident of his victory that he is standing down as an MSP. There were just 328 votes between him and Kerr last time round. So who will be the new ruler of BRK?

4. Labour’s last stand

Constituency: Edinburgh South
Battle: Ian Murray (Labour) vs everyone else

When Ian Murray first won Edinburgh South for Labour in 2010, he might have been in his early thirties, but he was surrounded by Labour heavyweights like Douglas Alexander and Jim Murphy. Five years later, after a catastrophic election night, he was the only Labour MP left in Scotland. 

Murray’s survival is down partly to his seat – a leafy, academic constituency that epitomises Edinburgh’s pro-union, pro-Remain vote – and his no-nonsense opinion on both these issues (he’s no fan of Jeremy Corbyn either). A similarly-minded Labour candidate, Daniel Johnson, won the overlapping Scottish parliamentary constituency in 2016.

Now, though, Murray is fighting a defensive battle on two fronts. The SNP came second in 2015, and will likely field a candidate again. But those with longer memories know that Edinburgh South was once a Tory realm. Stephanie Smith, who is also standing for local elections, will be trying to take a bite out of Murray’s pro-union vote. 

Still, Murray has a good chance of outlasting the siege. As one Labour activist put it: “I think I’ll be spending the next six weeks camping out in Edinburgh South.” 

5. The big fish in the pond

Constituency: Gordon
Battle: Alex Salmond (SNP) vs Colin Clark (Tory)

Freed from the chains of high office, Alex Salmond is increasingly in touch with his inner charismatic bully. When not trying to wind up Anna Soubry, he is talking up a second independence referendum at inconvenient moments and baiting the Brexiteers. This is the big fish the pro-union movement would love to catch. 

But can they do it? Salmond won the seat in 2015 from the Liberal Democrats with a majority of 8,687 votes. Taking on this whopper is Colin Clark, a humble Tory councillor, and he knows what he’s up against.  He called for every unionist to back him, adding: “I have been in training since 2015 and I am fit and ready to win this seat in June.”

To get a sense of how much the Scottish referendum has changed politics, consider the fact that Labour activists are ludicrously excited by this prospect. But however slippery he may be, the SNP goliath in person can win over even devout unionists.  I’m not betting on a hooked Salmond any time soon. 

 

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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