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Using employee benefit trusts for employee ownership. Graeme Nuttall Partner, Field Fisher Waterhouse LLP UK Government Independent adviser on employee ownership Email: graeme.nuttall@ffw.com Co-operative Education Trust Scotland. 31 May 2012. Unprecedented Government support
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Using employee benefit trusts for employee ownership Graeme Nuttall Partner, Field Fisher Waterhouse LLP UK Government Independent adviser on employee ownership Email: graeme.nuttall@ffw.com Co-operative Education Trust Scotland 31 May 2012
Unprecedented Government support Role of independent adviser Informal consultation Obstacles Solutions? Employee ownership
Unprecedented Government support • Nick Clegg, Deputy Prime Minster’s announcement on 16 January 2012 at Mansion House: “...of a new Government drive to introduce the concept of employee ownership into the mainstream British economy” • Norman Lamb is leading the cross-Whitehall work to investigate how Government can support this growing business model • The Mutuals Taskforce under Julian Le Grand and the Cabinet Office led by Francis Maude are promoting employee led mutuals • The reform of Royal Mail and its transformation into an organisation in which staff have a meaningful stake • HM Treasury internal review of employee ownership
Role of independent adviser • A new role • The remit is to: "work with Government to identify the barriers to employee ownership and help find the solutions to knock them down” • The independent adviser is asked to make his recommendations to Government in a report presented to Norman Lamb • The answers and solutions will be brought together at a summit chaired by the DPM on 4 July 2012 • Part-time and unpaid • Does not provide advice on specific cases or take any executive decisions - he may continue to advise clients
Informal consultation • Organised by Department for Business, Innovation & Skills (”BIS”) email: employeeownership@bis.gsi.gov.uk • Key questions: • What are the barriers? • What are the solutions?
Obstacles? Consistent themes, include • Lack of awareness of the concept of employee ownership • Information is often completely misunderstood • There can be resistance due to fixed ideas about ownership models • There is a lack of awareness of the solutions that already exist • There may be a fundamental problem with access to finance to implement employee buy outs • There are complexities in the legal structures needed to implement and maintain employee ownership. • There probably are material obstacles in how the tax system applies
Solutions? Raise awareness
Solutions? Increase resources and reduce complexity • Use of an employee benefit trust (“EBT”) John Lewis Partnership Employee Benefit Trusts John Lewis Partnershipplc & subsidiaries
Solutions? Individuals as trustees Employees Founder’s family etc. Beneficiaries Wilkin & Sons Employee Benefit Trust Shareholders Donald Insall & Associates Limited Employment