Gerald Nash (Louth, Labour)

I move amendment No. 3:

In page 8, between lines 13 and 14, to insert the following:

“Report on employee share ownership trusts 4. The Minister shall, within 12 months of the passing of this Act, lay a report before Dáil Éireann on any proposals to amend Chapter 2 of Part 17 and Schedule 12 of the Principal Act, relating to employee share ownership trusts, so as to facilitate the establishment of a greater number of such trusts and their smooth and efficient functioning.”.

My colleague, Deputy Lawlor, will be contributing to this debate as well. He has done significant work in this whole area of employee share ownership trusts, ESOTs. In my view, this is an underdeveloped area of the Irish economy. We have looked very closely at this area and I know the officials in the Department have as well, based on the discussions we had on Committee Stage with the Minister’s predecessor. Officials have looked at this in the Department. I know the Department of enterprise is looking at this whole space of employee share ownership trusts as well. Deputy Lawlor will speak much more eloquently than I on this particular issue, given the experience he has on the matter.

We know that our indigenous enterprise sector could do better. There are challenges when indigenous enterprises and high-potential start-ups seek to scale up. In the engagements I have had over many years with business owners in my constituency, and from the period I spent in the Department of enterprise, I am familiar with the challenge to raise revenue and expand. The options are limited for people when they want to sell their business on. There is often an ambition to keep the business and ownership in Ireland, but those prospects can be very limited and limiting.

In my experience, entrepreneurs who run and develop these companies, especially in the tech sector and so on, are often quite socially conscious and understand that their staff are a key component of the development and evolution of their business. Therefore, when they scale up, they want to see their staff succeed as well. One of the barriers to ensuring that staff can have a function in owning part of the company is the taxation treatment of members of employee share ownership trusts. Significant work has been undertaken in the UK in this regard and improvements have been seen in the landscape there in recent years. This is an area ripe for further focus from the Department of Finance and the Department of enterprise. It is an area that the Labour Party is interested in. We see this, in many ways, as the next frontier in the development of, dare I say it, stakeholder capitalism and evolving that idea of workplace democracy to meet the needs of the 21st century. This meets the needs of companies and staff and it helps to retain good, skilled staff in very competitive environments. This is an area we wish to see further explored by the Department and the Minister during his term.

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