Growth and Infrastructure Bill

Memorandum submitted by the Employee Ownership Association (GIB 52)

I write to members of the Growth and Infrastructure Bill Committee on behalf of Members of the Employee Ownership Association - employee owners and their businesses which contribute some £30bn to the UK economy each year - to express concerns about the contents of Clause 23 of the Growth and Infrastructure Bill. In particular the use of the term "employee owner", which is already widely understood to mean something else.

We ask that you move and/or support an amendment to the Bill to change the term "employee owner" to "share concession employee" or similar.

Our member businesses and the employee owners within them are alarmed at proposals that seeks to adopt a term already commonly used and widely understood across the UK (including by Government) to mean something else, and to redefine it as a model in which worker rights on such matters as redundancy and unfair dismissal are removed, in return for tax breaks on shares they might own in a business in which they work.

Our members are alarmed partly because these proposals are so disconnected from the Nuttall Review (which the Government has accepted) about how to grow the number of employee owners in the UK and risk appearing to have ignored that advice which was recently accepted by Government, and partly because the proposals are being legislated for in Parliament ahead of the outcomes of this consultation process about the proposals. Our views on these proposals were set out in a recent open letter to the Minister responsible, Jo Swinson MP (available on the EOA website).

"Employee owners" in the current meaning of the term are convinced that there is no need to dilute the rights of workers in order to grow employee ownership and no data to suggest that doing so would significantly boost the number of employee owners. Indeed all of the evidence is that employee ownership in the UK is growing and the businesses concerned thriving, because they enhance not dilute the working conditions and entitlements of employee owners. Furthermore, the return on investment in terms of numbers of employee owners created would be dramatically higher if the estimated £100m of cost associated with these proposals was more wisely invested in initiatives to increase employee ownership in the UK, including investing some of it to implement the recommendations contained in the Nuttall Review.

November 2012

Prepared 1st December 2012