Government welcomes increase in value of employee-owned firms as Deputy PM Nick Clegg delivers key London speech
Calls for a three-fold increase in the value of employee-owned firms have been welcomed by the Government as plans were announced to make it easier for staff to take over the running of companies.
£50 million is expected to be injected into the sector following a pledge made by Deputy Prime Minister Nick Clegg.
He says he wants to see people with jobs form part of employee-owned companies "hardwired" into the British economy, along with a boost for new firms set up under employee-owned models.
Mr Clegg welcomed a report which makes the business case for more recruiters opting for employee ownership by the Employee Ownership Association.
At a conference in London, he said: "Up and down the country, across public and private sectors, people-centred workplaces are contributing more and more to the economy." And through tough economic times in terms of recruitment, he said these firms can outperform others.
The Deputy Prime Minister added that it was his goal to help lay the foundations for a stronger economy and fairer society through employment models such as the employee ownership scheme.
He said: "We know our economy needs to be rewired to properly assess and share risk, to properly motivate and reward workers and to think for the long term.
Mr Clegg said he was pleased that in today's economy employee participation is already significant.
He said: "Companies where employees own a significant stake in the company they work for have a combined annual turnover of £30 billion, over 3% of GDP. The Employee Ownership Association has ambitions for this figure to grow to 10% of GDP by 2020 and I welcome this.
"Many companies spend thousands of pounds to come up with quirky ideas to motivate their staff, yet fundamentally it is the structure of their company which fails to align incentives."
According to Mr Clegg, the Government will be publishing a consultation to assess the impact of tax changes benefiting all employees, rather than those just at the top.
At the same conference, Iain Hasdell, Employee Ownership Association chief executive, said: "Employee ownership in the UK is growing and the businesses concerned thriving, because they enhance the working conditions and entitlements of employee owners.
"Clearly what our members wish to see is the translation of these helpful words of support into bold practical action from Government, particularly on taxation, that will help to deliver on our mission to increase the contribution of employee ownership to 10% of UK GDP by 2020."
Copyright Press Association 2013