Britain’s Labour Party shadow Chancellor of the Exchequer, John McDonnell speaks during a fringe meeting during his party’s annual conference, in Liverpool, Britain, September 23, 2018. REUTERS/Phil Noble
September 24, 2018
LIVERPOOL, England (Reuters) – Large companies would be forced to transfer as much as 10 percent of their shares into a fund to be owned and managed collectively by their workers, under plans to be set out by Britain’s opposition Labour Party on Monday.
Labour, which under socialist leader Jeremy Corbyn has shifted from a centrist pro-business platform to a more interventionist left-wing pitch, is using its annual conference to detail its plans to help a greater number of people to share in economic prosperity that it says is “hoarded by the few”.
Over the weekend the party announced plans to nationalize key industries and give workers a third of seats on company boards.
Labour finance spokesman John McDonnell will say that every company with more than 250 employees would have to create an “Inclusive Ownership Fund”, transferring at least 1 percent of their shares into the fund every year, up to a maximum of 10 percent.
“The evidence shows that employee ownership increases a company’s productivity and encourages long-term thinking,” McDonnell will say on Monday in a speech to the Labour Party’s conference in Liverpool, according to extracts released in advance.
“The shares will be held and managed collectively by the workers. The shareholding will give workers the same rights as other shareholders to have a say over the direction of their company, and dividend payments will be made directly to the workers from the fund.”
McDonnell cited the example of Germany, where workers sit on company boards, but the British Chambers of Commerce, a business lobby group, criticized Labour’s plan, saying it would deter people from investing in Britain.
“Let no one be fooled. Labour’s proposals are both a tax grab and an unprecedented overreach into the way many of our businesses are run,” Adam Marshall said.
“At a time of peak Brexit uncertainty, when Labour should be setting out how it will support business confidence and investment, it is announcing policies that would deliver the exact opposite.”
Under the plans, individuals’ dividend payments would be capped at 500 pounds a year.
The rest would be transferred back into public services in the form of a “social dividend” into a national fund that the plans envisage being worth 2.1 billion pounds by the end of the first term of a Labour government.
(Reporting by Kylie MacLellan; Editing by David Goodman and Gareth Jones)
