Building a shared economy


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Giving employees a stake in their business provides workers with economic gains and creates companies that are responsive to their frontline staff. We propose that tax incentives on employee ownership schemes should be reformed so that they are targeted at schemes that give employees a collective, democratic voice and employees should be given a statutory right to request employee ownership during business succession.

In the European ‘stakeholder’ approach to business, employees are given a formal role in making decisions about how a company is run. We propose all publicly listed companies should have a ‘duty to involve’ their employees at a workplace level, and have representatives of employees and other stakeholders on the board.

We proposed there should legislation which ensures that all British businesses with more than 50 employees are obliged to set up a profit sharing scheme with their staff, with a minimum profits share pot set aside based on a calculation of its annual profits and its financial position.

In utility markets characterised by monopolistic structures, the government should pursue opportunities to enable the conversion of utility monopolies to mutual organisations. It should also ensure that when building future infrastructure full consideration is given to the development of mutual models.

BT Openreach: BT Openreach is responsible for managing access to the national phone and broadband network. BT Openreach enjoys an unfair market position, we propose a separation of the infrastructure management and as supplier of telecoms should be enforced. An alternative vision for the management of the BT infrastructure can be found within the mutual Glas Cyrmu.

We propose that the UK should join with our 11 European neighbours to introduce a financial transactions tax, which would cover all trades in equities, bonds and derivatives.

We propose the Government should replace business rates and stamp duty with a land value tax, applicable to all land apart from property with an occupied primary residence on it.

We propose that new legislation be introduced to create a new “duty to serve” which would force UK banks to demonstrate that they are serving individuals and SMEs from all backgrounds.

The Government should impose a levy on payday lenders, which would be used to build the capacity of credit unions and other providers as a means of providing affordable alternatives. Part of this money should be used to offer deposits into a credit union account for every child, opened in their first year at primary school.

A new culture of co-operative entrepreneurship should be created in the UK through a range of measures including a new statutory ‘duty to foster diversity of corporate forms’.

We propose that a new office for Mutuals should be set up with a designated Minister. This senior Minister should be given cabinet authorisation and a team to lead this work across Government.

Legislative and regulatory responsibilities for co-operative and mutual businesses should be moved from the Treasury to the Department for Business Innovation and Skills and registration of mutual business should be moved to Companies House.

A new business impact test should be introduced to systemically ensure all legal forms are considered in legislation and regulation affecting business. This will reduce the number of unintended consequences in regulation that are so burdensome for co-operative and mutual businesses.

We propose that the law applying to mutuals should be reformed so that they have the opportunity to choose a legally binding corporate form that enshrines the principle of ‘disinterested distribution’ common in other EU states. This would ensure that there can never be a benefit from ‘cashing out’ because the assets must be transferred to another mutual.

We propose that changes to the scheme should be made to ensure that asset locked mutuals have access to funding. Currently, small asset-locked mutuals are unable to benefit from the EIS due to the limited role that external capital plays in member-owned organisations. Where mutuals decide to opt for an asset lock, their retained profits should qualify them for tax relief under EIS.

Community benefit societies are non-profit distributing businesses that exist for a specific social purpose. While a number of these are also registered as charities, this can be a difficult bureaucratic hurdle to navigate for some smaller organisations. As businesses solely concerned with social outcomes, the government should exempt community benefit societies from paying corporation tax and business and non-domestic rates.

We propose that Banking law should be reformed to ensure that it is possible to become a bank with a genuinely mutual and co-operative structure.

Local Enterprise Partnerships should be obliged to place the development of co-operative and social enterprise at the core of their approach. There should be at least one co-operative or social enterprise expert appointed to each board and each Local Enterprise Partnership should report specifically on their success in helping to stimulate the growth of co-operative and social enterprises.

We propose a new funding model for co-operatives should be developed, based on a similar model to the permanent interest bearing shares (PIBs) pioneered by the Building Societies.

We believe that there should be a new duty placed on the FCA and HMT which will grow a diverse financial sector.

Much of the legislation governing financial mutuals is antiquated and in urgent need of reform. It is often restrictive and incompatible with company law and ill-suited to modern forms of business.

An estimated 1 million peoples remain un-banked or under-banked. To understand patterns in financial exclusion and be better able to pin point at fault lenders HMT must demand much more financial data from the banks. This data should come with new duties on the FCA to make analysis and publish its findings.

We propose that every adult, household and business should have access to a basic package of fair and affordable finance tools, including a basic transactional bank account, savings schemes, access to credit, physical access to branch banking facilities, insurance and independent money management advice.

We believe that widening access to the UK payments systems (the method by which financial transactions are processed) is vital to ensuring more competition in the financial services sector therefore, reform of this system is required.

The banking levy disproportionally hits the ability of Building Societies to lend and punishes them for the misdeeds of the PLC banking sector. As such we propose that Building Societies should be excluded from this levy.

We believe that a new investment bank should be created along mutual lines, jointly owned by bondholders and the UK Government. The Bank should support the expansion of the co-operative, mutual and social enterprise sector through the provision of risk capital.

Innovative local authorities like Haringey and Glasgow have begun working in partnership with credit unions to open credit union accounts for children as part of a focus on financial education and promoting saving. We believe that national Government should follow their lead in order to offer a £10 deposit into a credit union account for every child, opened in their first year at primary school.

Payroll deduction by employers – allowing employees to make loan repayments or regular savings via their PAYE – is a proven mechanism for embedding credit unions. We propose all public sector employers should establish payroll deduction facilities for credit unions.