Press release

Response to Deputy Prime Minister announcement

In response to Nick Clegg's launch, today, of a campaign for a well-rewarded work force Ed Mayo, Secretary General of Co-operatives UK, said:

"We welcome proposals by the Deputy Prime Minister, Nick Clegg, to encourage business to reward workers through shares.

"Giving ownership to the people who work in a business is good for them but it is also good for the economy. The UK has a high proportion of workers (23%) that are not engaged in their workplace, well behind countries like Canada (17%), USA (16%) and Germany (15%). This comes at a cost, in terms of reduced productivity. Our research suggests that the annual economic cost of low co-operation for the UK economy stands at around £36bn.

"A number of other countries have shown that, over time, you can develop a strong and competitive economy on co-operative lines. In Finland, the co-operative sector accounts for 21% of GDP, in Switzerland 16% and in Sweden 13%. In New Zealand the largest business, Fonterra, is a co-operative."

It would be welcome, however, if the Liberal Democrats were to explore options of how to widen access to employee ownership to those on lower incomes, in order to promote a more participatory economy. There is already a total of around £1.2bn of annual tax incentives for employee share ownership. The downside of this subsidy has been that they have tended to benefit people on higher incomes far more than others, forming part of the rocketing pay packets of chief executives. We call for any new tax incentives to be conditional on them being open to all staff in a business, not just the few."

Co-operatives UK