Tuesday, 23 July 2019


There is a pattern of Liberal influence in government. In 1977, during the Lib-Lab pact, a working party was appointed by the then Secretary of State for Industry to develop the idea of a Co-operative Development Agency. One of the working party's recommendations was that the Government should bear the cost of setting up the agency and running it for a period of three years. After that, it was expected that the CDA would become self-financing. The original remit of the CDA was a wide one—to promote the adoption and the better understanding of co-operative principles and to represent the interests of the co-operative movement. The Board of the CDA decided to concentrate on the worker co-operative sector and it has been successful in promoting the co-operative concept and encouraging the setting up of worker co-operatives. When the CDA was first founded, there were only 300 worker co-operatives; in 1990, when the Conservative government wound it up, there were more than 2,000. After the Thatcher/Howe monetarist adventure which cut a swathe through small and medium enterprises, it was found that proportionately more cooperatives had survived than their traditional counterparts. The CDA was a rare example of Labour/Liberal convergence, of one of Labour's roots (the cooperative movement) and a long-standing Liberal commitment to co-ownership coming together.

Under the coalition, when the Conservatives had already started to bully or con Liberal Democrat ministers into compromising party policy, the Finance Act 2014 offered tax breaks to employee ownership trusts. However, as a legal advisor pointed out, "Whilst the two new tax exemptions are welcome and go some way to putting employee trust ownership on a par with the tax advantages for direct employee share ownership, tax, of itself, should not drive business structuring. Employee ownership is a tried and tested business model in the UK. Businesses such as the John Lewis Partnership are proof of this. This is what should attract attention to this ownership model. Of course, the new tax exemptions certainly serve to raise the profile of this under-used business model." A month after EO Day, the Employee Ownership Association is pressing for more government action to promote a business model which gives greater financial stability and job satisfaction, resulting in low staff turnover.

There is more here.

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