Clegg attacks "business sale" culture
DEPUTY Prime Minister Nick Clegg will today attack a “corporate culture” he claims is preventing more companies pursuing the “John Lewis” model.
The Sheffield Hallam MP will argue that to much focus is placed on entrepreneurs selling their businesses in a speech to the British Chambers of Commerce annual conference.
The Government is currently reviewing ways of encouraging more employee ownership of businesses and he will today announce that the Treasury is to consider if the tax system needs to be changed.
Mr Clegg will say the UK has a “near monoculture private sector” dominated by PLCs.
“We have a corporate culture that actively encourages owners to sell up, to have one eye on the door. One of my constituents told me that his business – where every employee owns shares – was recently refused a loan.
“This is a successful, multi-award winning company looking to invest in a dozen new products this year as well as open new offices in India and Brazil. Why was the loan application rejected? Because, as an employee owned firm, it didn’t fit the mould. They were told the company didn’t qualify for a loan because it didn’t have an exit strategy. Specifically, because the business has golden shares and so is intended to stay in employee ownership and can never be sold.”
Mr Clegg will suggest that employee ownership is a way to reduce the number of family-owned SMEs that fail when their owners look to move on or that are asset-stripped by bigger firms.
