A ten minute rule bill to support worker buyouts has passed its first reading in the House of Commons.
Christina Rees, Co-operative and Labour MP for Neath, introduced the bill yesterday which proposes to provide support for groups of employees at risk of redundancy, to help them buy their employing company as a co-operative.
In her speech, Ms Neath cited evidence of the benefits of employee ownership, stating that: “In times of crisis, co-operatives resist destabilisation because they fight for the long-term economic and social sustainability of their workers and sacrifice remuneration to reinvest and to maintain employment levels.”
She also pointed to public opinion polling carried out by the Co-op Party June 2020, which found that only 10% of the public believe that the economy had prioritised wealth sharing before Covid-19, but that 69% believed there will be an opportunity after the pandemic to widen ownership and give communities more say in how businesses and the economy is run.
“Nearly two years after the onset of the pandemic, the virus is mutating and not fading away,” said Ms Rees. “One way to widen ownership is to provide employees with the advice, support and funds to buy out their risk employer company.”
The proposed legislation is based on Italy’s Marcora Law, established during the economic crisis of the 1980s to give workers the right to save their jobs by enabling them to take their redundancy entitlements plus three years projected social security payments as a lump sum, to invest in a new worker owned company. It also provides government loans and advice to workers through the process. Through this system, Italy has saved 25,000 jobs by investing over EUR€300 million in 560 companies.
Ms Neath closed her speech with an appeal to chancellor Rishi Sunak, saying: “In response to the pandemic, the chancellor created the furlough scheme, which saved many many jobs. Perhaps he would consider creating a UK Marcora law to save many more jobs during the ongoing pandemic and into the future.”
The bill was passed unopposed, with a second reading scheduled for 18 March 2022. Though ten minute rules bills usually don’t make it into law, the wider conversation around Marcora Law in the UK has been gathering speed for some months now.
Ms Rees led a Westminster Hall debate on the matter last September, as well as raising it last December in another debate secured by Steve Baker, Conservative MP for Wycombe, which discussed the contribution of the UK’s co-operative sector and how it can be supported.
And in October last year, the Welsh parliament voted to back a similar employee ownership bill put forward by Labour and Co-operative MS for Ogmore and chair of the Co-operative Senedd Group Huw Irranca-Davies.