Clegg backs employee-owned firms

Ministers have backed calls for the value of firms owned by staff to triple and unveiled proposals to make it easier for employees to take the helm at the companies where they work.

Deputy Prime Minister Nick Clegg supports the idea of employee-owned firms and wants to see them become a more significant part of the nation’s economy. And from 2014 the Government will spend £50 million on initiatives to help new employee-owned companies. He said that these types of firms, which are being run by their workforce, are playing a more significant role and can do better than other types of companies. He said he wanted to help boost the British economy and he believed employee ownership could help achieve this. He said risk needed to be shared and properly assessed and staff needed to be given proper rewards and motivation.

Mr Clegg said he was happy that there was already a significant level of employee participation in the economy now with employee-owned firms having a combined turnover of £30 billion – more than 3% of GDP. And he welcomed a report by the Employee Ownership Association which wants this figure to more than triple to 10% of GDP in the next seven years.

He added that a lot of firms spent significant amounts of money trying to think of innovative ways to raise staff morale and keep the workforce motivated but that perhaps it would be more effective for them to look at their structure and whether that could be changed to incentivise their employees.

IBB’s Employment Team provides advice on the employment aspects of all major business decisions. To contact a member of the team for advice, call us on 01895 207892 or email employment@ibblaw.co.uk