Loanna Morrison is Director of the Conservative Co-operative Movement and contested Bermondsey and Old Southwark at the 2010 general election.
While in opposition, David Cameron proposed a policy that would encourage public sector workers to create employee owned companies or co-operatives, along John Lewis lines, to take over their own services in the public sector. He shared his aspiration that over a million employees could take advantage of this new right and said that it would be the biggest transfer of responsibilities since the Right to Buy.
Francis Maude has already set up pathfinder groups and provided a budget of £10m; now the access created by Localism legislation will see employee ownership in this sector becoming a reality over the next few years. As the Localism Act has received Royal Assent and since it appears that DPM Nick Clegg has been entrusted with taking policy forward, it maybe opportune to reflect on David Cameron’s landmark legislation and the other interpretation being suggested by Mr Clegg.
The Conservative Co-operative movement welcomes the initiative to give tax incentives to companies that are employee owned or which seek to be. This is an area that has been extensively researched and promoted by Jesse Norman MP who chairs the APPG on employee ownership. I myself have sat in on a discussion with John Lewis and it is important to point out that their ‘partnership’ is not as simple a structure as Mr Clegg would like to imagine. Shares held by employees, are only of benefit as long as they remain employees and only if the business makes a profit. However the advantage of his announcement is that it will lead to increased awareness of this model for financial institutions, which are approached to fund this type of business. At the moment they seem to lack knowledge of how employee ownership works or the advantages.