CEO Blog: Activating Labour’s Pledge to Support Employee Ownership

We have a new era of government and, for the first time in ten years, there’s a clear manifesto pledge to increase employee ownership. Our CEO, James de le Vingne, explores Labour’s promised support, our calls for immediate action, and our aims for the future. 

Image: A visit to eoa member Gripple in Sheffield with Shadow Secretary of State for Business and Trade Jonathan Reynolds - L to R Michael Hodgson Chair of GLIDE, Gripple MD Ed Stubbs, Rt Hon Jonathan Reynolds MP, and eoa Chief Executive James de le Vingne.

Employee ownership has garnered support from all main parties over the years. But the last significant support came when the coalition government worked with the sector to develop the EOT, brought in as part of the Finance Act 2014. 

In the decade since, the sector has grown ten-fold. However, that growth was slow to start and has been hard won. Awareness raising has been driven by the eoa, our members and allies, and has only really started to gain momentum in the past five years. 

However, we’re hopeful that our continued engagement with the Labour Party -and their manifesto pledge to double the size of the cooperatives and mutuals sector -means we can truly explore and embed what’s needed to make this a sustainable strategy, rather than a one-off target. 

So, while we’ll work to seek firmer commitments around EO, which to the uninitiated sits under the mutuals definition, we’ll work with other trade associations as a collective to support Labour’s manifesto pledge.  

We’ll be urging for a minister for Cooperatives and Mutuals to offer clear leadership. Our conversations with Labour give us great hope to continue the progress we made with the exiting government to make sure the voices of small and medium business, employee-owned business, sole traders, and family businesses are heard, rather than be drowned out by the largest UK businesses. 

This will be critical in influencing how the pledge to grow our sector fits into their commitment to publishing a long-term industrial strategy and tax roadmap, something we have supported and pushed for.  

Only then will the associated targets and measures filter down into local growth plans to make this a reality. Work with our partners in Scotland and Wales is evolving progress in this area alongside our work on the Ownership Hub, in partnership with Co-operatives UK, to work with combined authority areas of South Yorkshire, Greater London and West Midlands to grow inclusive and democratic business. 

Labour’s Policy Platform for Inclusive Growth

This is why we support Labour’s pledge to deepen devolution, giving localities and regions greater powers over their own economic development, granting areas a chance to focus on sustainable business growth and sustain priority sectors, innovation, and prosperity across their communities. 

West Midlands is leading a new approach to this, focusing on creating sustainability in its creative sectors, by growing more cooperative models at start-up and building succession support to root creative businesses - such as Hockley Mint, crafting and manufacturing in Birmingham's Jewellery Quarter which transitioned to EO last year -for the longer term. 

In general, business support for succession in the UK is weak. We therefore urge the new government take a national lead on making this a robust part of the business support infrastructure, to hold back the predicted loss of thousands of livelihoods from a ‘silver Tsunami’ of 120,000 business owners looking to sell, divest, or liquidate their shares over the next decade. 

With Labour’s plan for job creation so far heavily focusing on specific activity and reforms in sectors such as clean-energy and construction, it ignores some of the highest employing sectors of the UK economy, leaving the question of how Government intends to reach its 80% employment target. 

With pledged improvements through a national jobs and career services, and reforming Work Capability Assessments to getting people who could work “to fulfil their obligations”, this offers one part of the jigsaw. 

However, the best motivator for people to get into work is offering good employment that is fairly rewarded and where employees feel engaged with their work and workplace. It’s great to see the beginnings of an approach to this laid out in the Party’s “Plan to Make Work Pay: Delivering a New Deal for Working People”. 

There’s much to learn from an EO sector that is 8-12% more productive driven by empowered employees, supported by more investment in training and employee wellbeing, while collectively putting an average of £2,900 more in their pockets. 

We’re thrilled to see that the new government is taking upgrading the skills and training regime seriously – looking at evolving the Apprenticeship Levy - with a focus on emphasising flexibility and value for money. This reflects calls from the eoa and our partners including at the Future Economy Alliance and Family Business UK.  

As Government consults on eligible courses and qualifications, we will work to ensure that the experience of our members in accessing skills and training for employee owners to unlock the full benefits of the model is reflected. 

A Thriving EO Sector

In addition to the above, for the EO sector grow and thrive we need government to: 

• Futureproof the EOT by adopting recommendations made by the eoa and its members in the 2023 consultation, as well as protecting other share schemes and sustaining the supporting reliefs. 
• Adopt and flex allowances and reliefs for thriving employee owned businesses to deliver growth plans. 

You can read our full manifesto web pages here. 

There’s so much we can learn from maturing EO businesses to understand what would be lost if their futures were not secured for the longer term – including 1:1 Diet by Cambridge Weight Plan rooted and manufacturing in Corby, wholesalers Parfetts growing and evolving with depots and outlets across the north, and the amazing Alfa Travel that used its EO ethos to not just survive pandemic lockdowns but bounce back strongly. 

You’ll hear more from us on this on July 17 as we look to highlight the impact of the EOT on the tenth anniversary of it gaining royal accent as part of 2014 Finance Act. 

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