Labour's Radical Equity Plan May Not Be as Generous as It Seems
A Labour proposal to force
companies to hand 10 percent of their equity to workers if elected may not be as generous as it seems,
with businesses likely to cut wages and jobs to counter any hit to profits, according to U.K. lawyers.
“If the employer is forced to put these arrangements in place it is a good bet that they will
need to re-balance the scales elsewhere to maintain their profitability,” said Crowley Woodford, a London
employment lawyer at Ashurst. “The likely net effect is that it will suppress basic salary and in a worst
case lead to job losses.”
John McDonnell on Sept. 24.Photographer: Simon
Dawson/Bloomberg Shadow Chancellor John McDonnell announced the plan at the Labour Party conference
Monday. Under the proposal, public and private U.K.-based companies with more than 250 employees would be
forced to give 10 percent of their equity to staff if Labour wins the next election. The shares would be
held in Inclusive Ownership Funds that would pay annual dividends to a maximum of 500 pounds ($653) per
employee, with anything above that taken by the government for a “social fund” to help pay for public
While the proposals appear radical and go beyond any employee involvement in
businesses in continental Europe, the most radical thing about them is actually the “super-tax” that
Labour would get from the dividend excess, according to Michael Burd, an employment lawyer at Lewis
“While this is being billed as ‘handing 10 percent of equity to employees,’ it isn’t
really,” said Burd. “Above the 500 pound per employee cap, it will effectively amount to a super-tax on
10 percent of the company’s dividends.”
Alle Rechte vorbehalten. Nutzung ausschließlich für den privaten Eigenbedarf.
Eine Weiterverwendung und Reproduktion über den persönlichen Gebrauch hinaus ist nicht gestattet.
Kursdaten: Powered by Interactive Data Managed Solutions (IDMS). IDMS und die Datenlieferanten übernehmen keine Gewähr für die Richtigkeit, Vollständigkeit und Aktualität der Inhalte des Informationssystems. Die Kursdaten werden je nach Vereinbarung mit den Börsen/Handelsplätzen in Realtime, 15 Min. verzögert oder End-of-Day dargestellt. Weitere Hinweise entnehmen Sie bitte unseren AGB (§4 Abs.7).