We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
RSS FeedGovernance

Clegg wants more worker-owned co-operatives to sustain economy


Deputy Prime Minister would like to see 'more of a John Lewis economy'

Article comments

Britain will encourage greater worker ownership in companies to counter the "crony capitalism" that contributed to the current financial crisis and tipped the country into recession, Deputy Prime Minister Nick Clegg said today.

An "unrestrained economic elite" driven by short-termism and recklessness had brought the economy to the edge and had to be restrained by a more responsible capitalism, Clegg said.

The Liberal Democrats leader said that greater participation by employees would help rebalance a business environment "monopolised by a minority".

"We now have an economy driven by immensely powerful vested interests. The remedy, put most simply, is a redistribution of power," he said.

Firms with high levels of worker ownership had weathered the economic downturn better, had higher productivity and suffered from lower absenteeism, Clegg said.

He praised the model of the employee-owned retailer John Lewis, Britain's biggest department store, saying he would like more companies to adopt its mutual structure as a way of creating a more sustainable economy.

Britain faces years of austerity to eradicate a record budget deficit following the financial crisis and risks a return to recession as its economy stagnates.

"We don't believe our problem is too much capitalism. We think it's that too few people have capital. We need more individuals to have a real stake in their firms. More of a John Lewis economy, if you like," he said.

Lawmakers across Britain's political spectrum have been calling for curbs on the perceived excesses of capitalism, aiming in particular at executive salaries.

The political drive, accompanied by greater regulation of the banking sector, has been mirrored by public protest in the form of a global wave of "Occupy" anti-capitalist camps including one still pitched in London's financial district.

Later this month, Business Secretary Vince Cable will outline measures to force companies to detail with greater clarity how much they pay top executives, and require shareholders to vote on executives' levels of compensation.

The government would examine whether tax breaks should be offered to encourage more employee ownership, Clegg added.

It would also consider whether employees should be given a right to request shares in the companies they work for, particularly where the firms were not already publicly traded.

Britain has around 5,500 cooperatives, but most are relatively small compared to the two largest, John Lewis and the Cooperative Group, whose business ranges from food retailing to banking and funeral services.

Share:

Comments

Clegg wants more worker-owned co-operatives to sustain economy
Governance

What makes a good board report?

What makes a good board report?

Examining how CFOs can improve the way they report back to the boardmore ..


Vodafone buys out partner's stake in Indian unit

Mobile giant acquires the remaining 11% it did not already ownmore ..

Financial advisers not being clear enough on charges, says watchdog

FCA’s review found 73% of firms failed to provide adequate informationmore ..

EU data retention rules violate privacy rights, EU court rules

Rules requiring telcos to retain communications metadata are disproportionate, the court saidmore ..

Examining the issue of corporate litigation funding

Litigation funding is a very useful tool for CFOs but not a panacea for all legal mattersmore ..

Corporate governance: A catalyst for innovation

Corporate governance is a powerful tool in a C-suite executive’s arsenalmore ..

Send to a friend

Email this article to a friend or colleague:


PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.



In Depth
How M&A teams can create value by challenging the CEO

How M&A teams can create value by challenging the CEO

A typical “hold” period of nine to 18 months can generate increased sale value more ..

In Depth
What every company needs to do about big data?

What every company needs to do about big data?

In the first of a three part series, Pat Brans explores just how big 'big data' will get? more ..

Advertisement

* *