British businesses are to be given more education and support on becoming employee-owned firms, the minister for employment relations Jo Swinson has announced.
The plans come in response to Graeme Nuttall's independent review of the sector in July which found that that employee ownership offered significant social and economic benefits.
The move which will make it easier for companies to offer shares to their employees aims to create what deputy prime minister Nick Cleg coined a 'John Lewis economy', after the department store which is owned by its employees and distributes profits between them.
Nick Clegg said: "Businesses that are owned by their employees produce more, grow faster, keep their workforce happier, and pay staff more fairly."
As part of plans to help boost the number of businesses that convert to the model, the Government will review current red tape laws and reform the tax system to promote employee ownership.
While Nutall's review found employee ownership can help boost business performance and improve employee wellbeing, it also detailed a wide spread misconception that the model was difficult or burdensome, preventing business take up.
Jo Swinson said: "There has never been a more important time to create the right environment for different ways of running a business. Employee-owned companies have proved to be flexible and resilient during tough times, and have a clear role to play in securing long-term economic growth."
The 'Sharing Success' review made 28 recommendations for the Government regarding employee ownership, including:
- Setting up an independent body tasked with raising awareness of employee ownership, offering information and advice to companies
- Developing an 'off the shelf' template for setting up an employee owned company available through accountants and professional advisors
- Working with HMRC to consider the taxation issues and to offer guidance
A consultation into simplifying the company law surrounding employee-owned companies and the ways in which they can authorise, finance and hold share buy backs will close on 16 November 2012.