Welsh parliament considers Marcora Law

Wales could see new legislation supporting workers looking to buy out their employers when businesses are failing

Last week the Welsh Senedd voted to back an employee ownership bill that would help workers buy out their employers’ businesses in times of crisis. 

Huw Irranca-Davies, Labour and Co-operative MS for Ogmore and chair of the Co-operative Senedd Group, introduced a motion on 20 October to consider a Welsh ‘Marcora Law’, which would provide the legal framework, financial support and advice for workers to buy out all or part of a business facing closure or downsizing.

The proposed legislation is inspired by the Italian Marcora Law, introduced in 1985, which allows workers to invest their unemployment benefit and severance pay in recovering the business they had worked for, and provides support and advice throughout the process.

The motion received support from the majority of the Senedd and ministers agreed to meet with Mr Irranca-Davies to discuss the proposed legislation. But Welsh minister for the economy Vaughan Gething abstained, saying: “If we were to introduce legislation in this area, more detailed discussions would be required to understand the benefit of doing so.” 

Mr Gething said he had “an open mind” about the proposed legislation, but cited challenges around the balance of Westminster’s reserved powers and the Senedd’s devolved powers – Westminster has reserved powers over employment and trade law. 

Mr Irranca-Davies acknowledged some of these challenges in the debate, but said that the Welsh government has “levers that could prise open a Welsh Marcora law within our devolved competencies,” including powers over economic development, the Welsh Economic Contract, social partnership and procurement, as well as influence over companies in receipt of significant Welsh government funding.

The Welsh government currently provides support for businesses around employee ownership through its Social Business Wales programme, delivered by the Wales Co-operative Centre (WCC), which has advised over 50 Welsh companies on ownership transition. 

The WCC described the debate in the Senedd, and wider discussions about co-operatives and employee-owned businesses, as “very encouraging”. Rhodri Packman from the WCC told Co-operative News: “While we do not have a formal Marcora arrangement, the new Welsh government’s programme for government has committed to doubling the number of employee-owned businesses over the next Senedd term. We welcome this commitment, as the advantages of greater employee ownership of firms are proven, for the businesses, the workers themselves, and the communities they are rooted in.”

A similar proposal for a Marcora-style law was put forward in UK parliament last month, when Christina Rees, MP for Neath, led a debate on the potential for a British Marcora Law.

Speaking at a Co-operative Party online event on 25 October, Ms Rees said that while the proposal had not garnered much of a response from the Conservative government, it had resulted in a meeting with shadow secretary of state for business, energy and industrial strategy Ed Miliband’s team to explore the possibility of putting the Marcora Law into Labour Party policy.