Government response to the Nuttall Review
The report sets out in detail the government's response to each of the 28 recommendations made in the Nuttall Review of Employee Ownership published on 4 July 2012. (Our article on the Nuttall Review is available here.)
The Treasury is also conducting a review on employee ownership, including on barriers, such as tax barriers, to its wider take-up which sits alongside the response on the Nuttall Review. It is expected that the Treasury's review will be completed ahead of this year's Autumn Statement.
The government's response follows the three major themes established in the Nuttall Review: (1) raising awareness of employee ownership; (2) increasing the resources available to support employee ownership; and (3) reducing the complexity of employee ownership.
The government has accepted (or supported) each of the Nuttall Review recommendations (although three of the recommendations are only partially accepted) and approves plans for a range of measures to promote employee ownership in the private sector.
"Right to Request" recommendation
In particular, the government summarises the responses to its call for evidence on the "Right to Request" employee ownership recommendation. It states that more respondents were against the idea of introducing a statutory "Right to Request" than those who supported it, because of the regulatory burdens for businesses and employers involved. According to the government, any future "Right to Request" should be designed and implemented in a way that minimises burdens to business. The government intends to introduce a voluntary toolkit (developed with ACAS) for requesting and agreeing employee ownership in a company. It will make a final evaluation on whether a statutory "Right to Request" is justified three years after the introduction of the voluntary toolkit.
The government response also includes the following measures:
- the development of a Minister-led Implementation Group (including representatives from government, business and professional services and the employee ownership sector) to identify key tasks in the implementation of the Nuttall Review recommendations;
- collaboration with the employee-owned and wider mutuals sector to establish whether a new Institute for employee ownership is a viable business proposition; and
- working with various organisations on matters such as promoting employee ownership and developing "off the shelf" templates for employee ownership.
The full response can be found here. Further details will be provided around the time of the Autumn Statement and there will also be a "one-year on" report on progress.
BIS consultation on employee ownership and share buy backs
The government has also published a consultation on the implementation of one particular Nuttall Review recommendation relating to share buy backs. The Government is seeking responses on a number of company law provisions which the Nuttall Review concluded were unnecessarily onerous.
The consultation proposes several amendments, including: (1) allowing for an off-market share buy back to be authorised by means of an ordinary resolution; (2) increasing flexibility with regard to the financing options available on a buy back; and (3) extending provisions for treasury shares to private companies.
The full consultation can be found here. Responses to the consultation should be submitted by 16 November 2012.