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Employee ownership will ‘unlock growth’

Deputy Prime Minister Nick Clegg plans to propose more employee ownership and will urge companies to offer shares to their employees, in order to improve productivity and growth.

Clegg will state that Government is looking to cut red tape and reform the tax system in order to make it easier to move to a ‘John Lewis economy’, in reference to the retail partnership in which all staff have a stake in the company’s prosperity and a say over its management.

Clegg is set to say: “We don’t believe our problem is too much capitalism – we think it’s that too few people have capital.

“I want this to be the decade of employee share ownership. We need more individuals to have a real stake in their firms. More of a John Lewis economy, if you like.

“And what many people don’t realise about employee ownership is that it is a hugely underused tool in unlocking growth. I don’t value employee ownership because I believe it is somehow ‘nicer’ – a more pleasant alternative to the rest of the corporate world. Those are lazy stereotypes.

“Firms that have engaged employees, who own a chunk of their company, are just as dynamic, just as savvy, as their competitors. In fact, they often perform better.

“The people best-placed to look after the interests of staff are staff. And that is what, so far, has been missing from this debate: ordinary people.”

Clegg has asked ministers to examine ways of promoting employee ownership. Danny Alexander, chief secretary to the Treasury, has been asked to look at the tax arrangements for employee-owned groups, while Ed Davey, a Lib Dem minister in the business department, will examine regulation.

The full package of boardroom reforms is expected to be announced by Business Secretary Vince Cable next week and is part of the Government move to promote greater fairness and accountability inBritain’s market economy.

Shadow business secretary Chuka Umunna said: “Despite having first scorned Labour’s initiative, David Cameron now claims he has become a convert to the cause. The question for both him and Nick Clegg is whether they have the courage or the conviction to make the change that is needed.

“If Nick Clegg wishes to follow Labour’s lead in promoting shareholder activism and engagement, that is welcome.”

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