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September 25, 2018


Luis Enrique

what's your thinking on whether wages would adjust to (partially?) offset the effect on workers' total compensation?

Dave Timoney

One aspect of McDonnell's speech that hasn't garnered much coverage is the idea that "a proportion of revenues generated by the ‘inclusive ownership funds’ will be transferred back to our public services as a social dividend".

This provides a way of increasing taxation without necessarily changing the headline level of Corporation Tax, and in a manner that is likely to command popular support. Significantly, this hints at a path towards a possible UBI rather than just a conventional sovereign wealth fund.

In other words, McDonnell appears to be interested in something wider than just workers' equity within a subset of industry.


Philip Aldrick in The Times today claims this is a sneak tax, as pointed out by 'From Arse to Elbow' above. "Under Labour’s proposals, every company in Britain with more than 250 staff, including listed multinationals, would be compelled to hand over a tenth of the business to its employees, staggered over ten years. Staff would collect the first £500 of their dividend entitlement, with the state taking the rest." https://www.thetimes.co.uk/edition/business/mcdonnell-s-employee-ownership-is-a-stealth-tax-on-big-business-k0xz9mqzt


The workers won't own f*ck all, because they can't sell it. Just like when 'everyone' owned the nationalised industries, no one got their bit to sell. Ergo the workers will have no more say in how the company they work for is run that the workers had in the nationalised industries. Its all just a way for the likes to McDonnell to get more power in his hands. The workers won't each get a vote for 'their' shares at the AGM, it'll be done as block vote stitched up in a back room somewhere by some Momentum thug, in the same manner those 'votes' were taken for strikes in the 70s - vote against and get beaten up.

This is all great stuff anyway, I hope it happens, then the workers will find out what socialism is all about, good and hard. Lots of 'democratic rights' in theory, f*ck all freedom in practice.


Great post Chris!

Just one point though: The share issue will be more like a bonus issue than a rights issue since no cash will change hands. Moreover, the pre-emption rights that normally accompany a share issue will have to be negated in respect of the share issue. I presume legislation will achieve this.

Christopher H.

I think this is a good plan although I like the SWF-UBD plan better.

Exciting that Labour is being ambitious.

Supposedly the Meidner plan in Sweden was fought viciously by business interests b/c they understood it was a democratic challenge to their power.


Needless to say the details have not been published - no doubt they haven't been thought about very much at all - but the devil will certainly be in those details.

I understand that this will apply only to UK listed firms. Is that right?
The Guardian's resident genius Aditya Chakrabortty claimed it would not apply to Apple or Google, though he "wasn't sure" about Amazon...LOL...
So no such scheme for them or Ford, Nissan, Microsoft, Oracle, Merck, GE...though of course most will have their own (sensible) schemes anyway.
Can this be avoided by the simple expedient of shifting domicile and/or listing?
Should the London Stock Exchange begin winding itself down now?

Luis Enrique

is it right that workers won't be able to sell their shares? In which case:

"Roger Farmer has proposed that the Bank of England acts to stabilize animal spirits by using a form of QE to directly raise share prices in a slump. Right now, this is ruled out on the grounds that it would increase inequality. If, however, shares are more widely held, this objection disappears."

The objection does not disappear. Why do workers care if the prices of shares they cannot sell goes up?


It's quite a bad policy. Giving workers ownership of the company like this does NOT empower them, nor does it give them a voice, it doesn't even give them a higher share of profits. The shares are held by a trust, which will distribute dividends and vote proposals. Given that setting up an individual trust for every business of more than 250 employees in the UK would be an enormous waste of resources, it would have to be a centrally run one, so who decides how workers vote their stakes?

As for the dividend - depending on who they work for, workers could see effective taxes on dividends of over 99% (example of shell cited here: https://www.bbc.co.uk/news/business-45626043). No other shareholder receives this treatment - why exactly is a government that is pro-worker willing to treat workers far worse than rentiers?

Tony of CA

Capitalism has already failed, the financial elites just don't want to admit it.

Brutto Buono

What's going on here? Workers turning into owners? Great...are they prepared to share the downside as well as the upside: and I mean REAL downside, not that you have fixed income, regardless...

Oh, I misread: it's just another way to tax business while profiling Labour as the well-meaning speaker for ignorant workers...

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