A quiet revolution is spreading across Britain’s high streets and factory floors. As American baby boomer business owners retire and sell to their employees, the UK is quietly leading a more radical model of worker ownership. This week, the Employee Ownership Association revealed that Britain now boasts over 1,300 employee-owned firms, up from just 500 a decade ago. The sector employs more than 250,000 people and contributes £30bn to the economy.
But the real story is about power. In the US, when a founder retires, they often sell to insiders via an Employee Stock Ownership Plan (ESOP). It’s a financial transaction. In the UK, the shift is more ideological. Here, worker ownership is often about democracy: one worker, one vote. The John Lewis Partnership, the UK’s largest employee-owned company, is the poster child. But smaller firms are joining the fray.
Take Richer Sounds, the hi-fi retailer. Founder Julian Richer transferred 60% of shares to a trust in 2019, making staff co-owners. Or Arup, the engineering giant, which has been owned by a trust since 2001. These firms are not just passing the buck; they are passing the control.
Why now? The answer is a mix of necessity and belief. Small business owners are ageing: half of UK small business owners are over 50. Without a succession plan, many face closure or a fire sale. Employee ownership offers a tax-efficient exit, with capital gains tax relief on sales to trusts. But it also taps into a wider discontent. Wages have stagnated for a decade. The cost of living crisis has sharpened calls for a fairer share. Worker ownership promises a slice of the pie.
The union movement has taken note. The TUC now champions co-ops and employee trusts. “It’s about dignity at work,” said Frances O’Grady, the former general secretary. “When workers own the firm, they share in the profits and the decisions.” Indeed, studies show employee-owned firms are more productive, have lower staff turnover, and are less likely to make layoffs during recessions.
But it’s not all roses. Critics point to the risk of “pseudo-ownership” where workers have shares but no real say. Some trusts are run by professional managers who control the board. Others struggle to raise capital because banks are wary of lending to collectives. And there is a stubborn inequality: the biggest employee-owned firms, like John Lewis, still have wide pay gaps between top bosses and shop-floor staff.
Still, the trend is accelerating. In the US, ESOPs cover about 14 million workers. But the UK model is spreading faster per capita. The government has pledged to double the size of the employee-owned sector by 2030. A new “worker ownership” task force is looking at legal reforms to make it easier to set up trusts.
Meanwhile, the pandemic exposed the fragility of traditional businesses. Many high-street shops and manufacturers that were family-run collapsed when the founder retired. Employee ownership offers a buffer. It also ties the business to the community, since workers are less likely to move jobs or sell out to a corporate raider.
For Sarah, a cleaner at a co‑owned cleaning company in Manchester, the difference is tangible. “We used to get minimum wage and no security. Now we decide our hours and share the profits. The boss retired, but we kept our jobs.” Her story is not unique.
The real challenge is scale. Can this model move beyond the niche and permeate the mainstream economy? The US proves that it can. But the UK’s version, with its emphasis on democratic governance, is more ambitious. It demands trust and organisation. Yet in a world of short‑term contracts and gig work, the idea of owning your workplace is seductive.
The revolution is quiet, but it is real. And unlike the American dream of individual wealth, the British worker ownership model is about collective wealth. It may not make headlines, but it is changing lives one worker‑owned firm at a time.
