In a move that has sent shockwaves through the boardrooms of Britain, a business has been sold to its staff, prompting a chorus of approval from the usual suspects who believe that giving workers a slice of the pie is less likely to result in industrial revolution and more likely to result in a collectively-owned biscuit tin. The Employee Ownership Trust (EOT) model, once the preserve of sandal-wearing idealists and out-of-print economics textbooks, is now being hailed as the future of British capitalism, which rather proves the point that capitalism has finally run out of ideas.
One must imagine the scene: the workers, now shareholders, gather in the canteen to discuss the quarterly earnings report while nibbling on the same soggy chips they have always nibbled on. The only difference is that now they own the chips, in a metaphorical sense. The EOT structure, you see, is a tax-efficient miracle. It allows the previous owner to sell the business to a trust while paying no capital gains tax, while the workers get to feel a vague sense of empowerment that somehow makes the leaking roof seem less infuriating.
The government is positively giddy. They have been pushing EOTs as a way to broaden ownership, which is a bit like praising the weather for being slightly less damp. The official line is that employee-owned companies are more productive, more resilient, and more likely to treat the workforce as humans rather than fleshy units of production. This, of course, is a dangerous precedent. If workers are happy, who will write the angry letters to the Telegraph?
But let us not get carried away. The EOT revolution is about as radical as a mild cheese. The workers do not actually own the shares in their own names, you see. The trust holds them on behalf of the employees, meaning that the workers have ownership without the hassle of actually having to decide anything. It is the corporate equivalent of being given the keys to the car but being told you cannot drive it. The trust is run by trustees, who are typically accountants, lawyers, or the old boss's nephew who happens to be good at golf. So the workers get the warm glow of ownership without the cold reality of control. Lovely.
Still, it beats the alternative. The old model of grinding workers into dust while the boss sails his yacht around the Cayman Islands is so twentieth century. Now, the boss can sell his business, pay no tax, and then sail his yacht while the workers pick up the pieces. It is a win-win. For the boss. But do not fear, the workers get a bit of profit share each year, which they can spend on scratch cards and hope. And they get to attend meetings where they can ask questions that will be politely ignored.
The real genius of the EOT is that it solves the problem of succession planning without solving the problem of inequality. The rich man gets his money tax-free, the workers get the illusion of control, and the government gets to pat itself on the back for encouraging a more equitable society. It is the political equivalent of a three-card trick. Watch closely, and you might miss the sleight of hand.
But do not let my cynicism fool you. I am all for anything that makes workers feel less like serfs. Perhaps one day, the EOT model will evolve into something genuinely democratic. Perhaps the workers will one day realise that ownership without control is just a nicer version of serfdom. And perhaps then, they will decide to sell the business back to the old boss, just to see the look on his face. But until that day, I raise my glass of indifferent gin to the EOT: the slowest revolution in history.
