1. Using employee benefit trusts for employee ownership
Graeme Nuttall
Partner, Field Fisher Waterhouse LLP
UK Government Independent adviser on employee ownership
Co-operative Education Trust Scotland
31 May 2012

2. Employee ownership Unprecedented Government support
Role of independent adviser
Informal consultation
Obstacles
Solutions?

3. 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

4. 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

5. Informal consultation
Organised by Department for Business, Innovation & Skills (”BIS”)
Key questions:
What are the barriers?
What are the solutions?

7. 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

8. Lack of awareness

9. Solutions?
Raise awareness

10. Solutions? Increase resources and reduce complexity
Use of an employee benefit trust (“EBT”)
John Lewis Partnership
Employee Benefit Trusts
John Lewis Partnershipplc & subsidiaries

11. Solutions? Individuals as trustees Employees Founder’s family etc.
Beneficiaries
Wilkin & Sons Employee Benefit Trust
Shareholders
Donald Insall & Associates Limited
Employment