The latest fad sweeping through Britain’s business pages is the employee ownership trust, or EOT. A handful of owners have sold their companies to their staff, and the press hails it as a revolution. But let us not mistake novelty for profundity.
This is not a new dawn; it is a pale echo of the guilds and mutual societies that once formed the backbone of our industrial economy. The Victorians understood that property and labour must be bound by more than a wage slip. They built building societies, cooperatives, and friendly societies.
Today, the EOT is a clever tax dodge dressed as altruism. The owner gets capital gains relief, the staff get a stake, and the government gets less revenue. Meanwhile, the real problems of British business—chronic underinvestment, managerial mediocrity, and a cult of short-termism—remain untouched.
Employee ownership may improve morale, but it does not automatically improve productivity. Ask the John Lewis Partnership, which has seen profits dwindle despite its vaunted model. The true test is whether these firms can compete against Asian rivals whose workers have no shares but far stronger work ethics.
So by all means, sell to your staff. But do not pretend you have solved the riddle of British capitalism. You have merely rearranged the deckchairs on a slowly sinking ship.
