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UK government encourages investment in successful employee ownership companies

Business Minister Jo Swinson has launched a new FTSE compliant UK Employee Ownership (EO) Index designed to promote investment in successful employee ownership companies, the UK Department for Business, Innovation & Skills (BIS) reported on Tuesday.

Employee ownership means that workers have a voice as well as a stake in the success of their business and is said to be widely recognised as a sustainable business model which helps drive staff commitment, productivity, resilience and innovation.

The EO Index is being calculated by FTSE International according to FTSE methodologies and provides investors with information about the 69 UK public companies listed on the London Stock Exchange that have at least 3% of their issued share capital held by, or for, the benefit of employees other than main board directors. This Index shows that in previous periods businesses that have adopted employee ownership have regularly outperformed the comparable FTSE 100 and All-Share indices.

BIS added that the EO One Year On Report, which monitors ongoing progress by government and the EO sector towards making employee ownership a mainstream part of the UK economy, was announced by Graeme Nuttall, author of the Nuttall Review into Employee Ownership. The report found that significant progress has been made by government and the EO sector against each of the 28 Nuttall Review recommendations made in October 2012.

These recommendations included: raising awareness of employee ownership through the first national Employee Ownership Day on 4 July 2013; the allocation of GBP50m annually from 2014-15 to introduce tax reliefs for businesses adopting the employee ownership model; the publication of joint government and industry-led guidance to help businesses adopt the employee ownership model.

The Business Minister said the government is committed to examining other issues faced by the sector and called on businesses to tell government what measures could be taken to lessen the complexities of employee ownership.

Nuttall commented: “One year on from the government’s response to the Nuttall Review, it is right to say that much has been achieved. I thank all those who have helped make the Nuttall Review recommendations move from the page to reality. However the bar has now been raised and there is more to do if we are all to succeed in making this the decade of employee ownership.”

CEO of the Employee Ownership Association, Iain Hasdell, stated:

“The EOA is the voice of employee owned organisations across the UK and we are very pleased with the momentum achieved since the independent Review we called for in 2012. Awareness is expanding on a daily basis. The priority now is to make even more progress towards the EOA target of growing UK employee ownership to 10% of UK GDP by 2020; a target which has been widely endorsed by our partners.”


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