Deputy prime minister says allowing employees to have a stake in their firms will usher in a new era of ‘responsible capitalism’
Nick Clegg has unveiled plans to create a “John Lewis economy” by radically increasing employee share ownership.
Liberal Democrat ministers are to explore ways of getting employee ownership “into the bloodstream” of the British economy – including the introduction of a right for workers to request shares in their companies.
The deputy prime minister said employee-owned firms tended to perform better, which will help boost growth.
The move would also challenge the corporate culture and help usher in a new era of “responsible capitalism”, he said.
At an event hosted by the City of London Corporation and the Centre Forum thinktank, he said the concept of employee ownership had been a “touchstone” of liberal thinking since the 19th century.
“We don’t believe our problem is too much capitalism – we think it’s that too few people have capital,” he said.
“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 under-used 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.
“Lower absenteeism. Less staff turnover. Lower production costs. In general, higher productivity and higher wages.
“They weathered the economic downturn better than other companies.”
The Lib Dem business minister, Ed Davey, is to take charge of the drive within the government to work out the barriers to employee ownership so that they can be removed.
He will look specifically at the possibility of introducing a universal right for employees to request shares in the companies they work for.
Danny Alexander, the Lib Dem chief secretary to the Treasury, will study tax arrangements for employee-owned firms.
Clegg will host a summit on the issue later in the year.
The shadow business secretary, Chuka Umunna, said Clegg was following Labour’s lead on responsible capitalism.
“Ed Miliband has led calls for a more responsible capitalism and, despite having first scorned Labour’s initiative, David Cameron now claims he has become a convert to the cause,” he said.
“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.”