using employee benefit trusts for employee ownership
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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
Lack of awareness
Solutions?
Raise awareness
Solutions?
Increase resources and reduce complexity
• Use of an employee benefit trust (“EBT”)
John Lewis Partnership
plc & subsidiaries
John Lewis PartnershipEmployee
Benefit Trusts
Solutions?
Donald Insall &
Associates Limited
Employees
Wilkin & Sons
Employee Benefit Trust
Individuals as trustees
Founder’s family etc.
Employment
Beneficiaries
Shareholders
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