Treasury Minister Supports Boost for 21st Century Employee Ownership

Tomorrow (Tuesday 14 January 2014) Chief Secretary to the Treasury Danny Alexander MP delivers a major speech on employee ownership at an event co-hosted by the Employee Ownership Association and Cass Business School.

The speech marks a stepping stone towards achieving significant changes in the way businesses in the UK operate.

The Minister will say:  “Working for an employee owned organisation has a particular appeal for many people and produces a number of personal, social and economic benefits, including higher levels of engagement and productivity. The government is fully committed to the sector and has recently made £75 million available to it in the form of tax incentives.”

Iain Hasdell, CEO of the Employee Ownership Association, will say: “The Employee Ownership Association has been calling for additional measures in support of employee owners for some time now. The recent confirmation of new tax incentives for employee ownership, and the announcement of £75m each year from April, mark another key step towards our widely endorsed target of 10% of GDP being delivered by employee owned businesses by 2020. These measures will help to create more of the higher productivity and long term investments that employee ownership delivers in every sector of the economy.”

Professor Lampel of Cass Business School, co-author of the 2010 EOA sponsored study examining the advantages of the employee ownership structure and how employee owned businesses (EOBs) fared under adverse economic conditions, will tomorrow publish further research “Does Employee Ownership Confer Long-term Resilience?” extending the comparative analysis over the periods 2009-10 and 2010-11 to examine whether EOBs continue to demonstrate resilience when the disruption is prolonged.

The analysis shows that while non-EOBs tend to out-perform EOBs during periods of economic growth, this performance falters during periods of crisis.  In the current policy environment, non-EOBs enjoy greater support, which gives them a natural advantage to benefit from growth opportunities during favourable economic conditions. With recent policy manoeuvres in favour of EOBs the upsurge in EOB performance looks promising.