The missed opportunity- the Autumn Statement fails to deliver the new economy
How deflating! The year started off with a bang with Nick Clegg’s commitment to “drive employee ownership into the bloodstream of the UK economy”. The Nuttall report was launched by no less than three government Ministers and a source close to No 10 promised me that “the landscape for employee ownership will change”. Has it? There will be an institute established, and a “task force” to raise the awareness amongst lawyers and accountants. Hardly “landscape changing” stuff… When will we see the real policies that will make a difference?
We got October’s red herring with George Osborne’s proposal for a new form of contract which would allow companies to recruit workers on a weakened employment contract in exchange for shares. Many of us in the employee owned and co-operative sector judged this to be a bizarre move and I wrote about this here . It seems I wasn’t alone. BIS published the result of their consultation on the proposal which found that only 3% viewed this positively. Yet, the government has stated an intention to press ahead.
So, hopes were pinned on the Autumn Statement. I suggested this might be the opportunity for the Chancellor to reclaim the government’s position as champions of employee ownership in an article for the New Statesman. The new employee shareholder scheme merited one sentence. This was followed up by a further statement from the Treasury to say that the April Budget will consider measures to support employee ownership based on the Nuttall review.
There were some positive measures in the budget for SME businesses – but nothing that will specifically support the growth of the employee owned sector.
Let’s not get too despondent. There are good things happening. The Employee Ownership Association has seen membership grow by 10% this year. Co-operative Development Scotland offers an excellent advisory service for business owners interested in exploring employee owned models. Since the beginning of the year, their programme to engage law firms, accountancy firms and banks has been spreading the message of employee buy outs as a succession option. Wales Co-ops has seen an increasing interest in employee ownership particularly in rural areas.
This is a growing sector. Had the promises of support been delivered today, we could have seen an acceleration in that growth which would have brought benefits to the economy, local communities and employees. As it is, employee ownership will continue to gather momentum despite the lack of political follow through.
Posted in: Employee owned business