Oral Answers to Questions

Jesse Norman Excerpts

Tuesday 6th November 2012 Commons Chamber

[Pauline Latham (Mid Derbyshire) (Con)]

4. What assessment he has made of the fiscal implications of the Government’s proposed employee-owner scheme.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

6. What recent representations he has received from businesses on the fiscal implications of employee ownership.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government expect that the scheme will cost up to £100 million in 2017-18. The initial estimate will be refined following the Department for Business, Innovation and Skills consultation on the implementation of the new employee-owner status, which involves engagement with business and others and will close on 8 November. The annual breakdown of the estimated Exchequer cost of the policy will then be published at the autumn statement once it has been certified by the Office for Budget Responsibility.

[Mr Gauke]

I am pleased to tell the House that the likes of the Federation of Small Businesses, the British Chambers of Commerce and the Institute of Directors have warmly welcomed the proposal, which will help entrepreneurs and start-up businesses.

[Jesse Norman]

Studies have shown that employee-owned companies grow as fast as limited companies, are more resilient and better at creating and keeping jobs, and have higher levels of staff well-being and fairer pay, which means that they are proven to create social value. As well as removing current tax incentives, will the Government consider a new capital gains tax relief for businesses sold into employee ownership?

[Mr Gauke]

My hon. Friend will be aware of the Nuttall review, which reported last week. The Treasury is also considering its role in helping employee ownership to support growth as well as options to remove barriers, including tax barriers. That work is being considered in the run-up to the autumn statement.