Labour propose confiscating 10% uk equities - pension planning response?

Sapphire

In all of this, labour doesn't seem to have taken into account the fact that an increasing number of people are freelance and work for companies from home. What 'benefits' would labour confer on such people, as opposed to those working full time for employers?

Also, what does labour mean by 'workers'? Isn't anyone who works for a company, including the management and even the owners, a 'worker'?

I agree with all the above who say that the suggested policy would be detrimental to all, and that it would constitute theft. It would decimate companies that are already struggling and ensure a rapid exit of many remaining companies from this country.

An extremist labour government made up of momentum and its acolytes would impoverish all, including those who've worked hard all their lives, and not on high salaries. Hearing the suggestions made by these extremists makes me feel as though I'm in some sort of 'back to the past' time warp.

And they wouldn't stop with confiscating assets like this; it would just be the beginning. They'd undoubtedly make raids on private property and other private 'assets' people have often taken years of hard work to build up.

Ganga

marlot wrote: »

Don't forget that around 50% of the population pay no income tax. Policies which 'bash the rich' could become very popular.


And given the greed at the heart of many big company boardrooms, they're an easy target.


Of course, the rich will avoid the new taxes. The poor don't pay, and it'll be the people in the middle who have to pay.

Both my wife and myself are both retired and neither of us pay tax but will not vote Labour.

Paul_Herring

Both my wife and myself are both retired and neither of us pay tax

VAT?

Excise duty on alcohol, tobacco or fuel?

Insurance premium tax?

Moby

michaels wrote: »

So this is currently a hypothetical but if labour do confiscate 10% of all uk equities presumably any uk equity funds will suffer the same loss and this will get priced in depending on how soon an election is likely and opinion polls.

Would it make sense to shift funds out of uk equities before the market starts pricing this in seriously?

Labour’s proposals are based on the principle that when a company does well and generates a profit and pays a dividend, it should share a tiny proportion with the workers responsible for its success. No normal person would object to this. Given the UK’s well documented problems with pay stagnation, low productivity and huge pay gaps between those at the top and everybody else, these are proposals that put a bit more money in workers’ pockets, and link a small proportion of their pay to company performance. It's hardly revolutionary! The typical CEO is paid 160 times the average UK worker.


It’s worth considering how little is actually being asked of businesses through these proposals. Under Labour’s plans, they would transfer a tiny amount of equity (1% per year) to an ‘inclusive ownership fund’ run on behalf of workers, until the fund owns 10% of total equity. In other words, workers will have some ownership of the company (and therefore some say in the governance) but not a controlling stake. They would take a small share of dividends, but other shareholders would still get at least 90%.


At a fringe organised by Warwick University at the Labour conference, one CBI representative admitted that over 80% of companies already make some form of share award to some of their workers. .....so it already happens folks and we haven't succumbed yet to the trotskyist hordes! Labour is merely suggesting that business do a bit more than it is already doing, bringing the laggards up to the standard of best practice and ensuring that all workers at all companies benefit to a more meaningful extent.

OldMusicGuy

Moby wrote: »

Labour is merely suggesting that business do a bit more than it is already doing, bringing the laggards up to the standard of best practice and ensuring that all workers at all companies benefit to a more meaningful extent.

Just read the earlier posts and the Shell example. Labour's plan appears to no more than a tax with a small portion being given to "workers". The equity is confiscated and owned by the government, not the workers. Workers do not own shares, they are given a small amount from the fund by the government (£500), the government keeps the rest to spend on whatever it wants.

If Labour genuinely wanted to benefit workers, they would force companies to introduce more inclusive share ownership schemes. Tying this to executive share schemes might be a good way of ensuring that there is some balance between the masses of shares given to execs and the ability of workers to genuinely participate in the success of the company. However, Labour is taking large amounts of cash from companies and pension funds to blow on public sector spending while trying to dress it up as "employee share ownership". IMO they are just as bad as greedy execs, they are taking most of the money for themselves, not the workers.

Triumph13

Moby wrote: »

Labour’s proposals are based on the principle that when a company does well and generates a profit and pays a dividend, it should share a tiny proportion with the workers responsible for its success. No normal person would object to this. Given the UK’s well documented problems with pay stagnation, low productivity and huge pay gaps between those at the top and everybody else, these are proposals that put a bit more money in workers’ pockets, and link a small proportion of their pay to company performance. It's hardly revolutionary! The typical CEO is paid 160 times the average UK worker.


It’s worth considering how little is actually being asked of businesses through these proposals. Under Labour’s plans, they would transfer a tiny amount of equity (1% per year) to an ‘inclusive ownership fund’ run on behalf of workers, until the fund owns 10% of total equity. In other words, workers will have some ownership of the company (and therefore some say in the governance) but not a controlling stake. They would take a small share of dividends, but other shareholders would still get at least 90%.


At a fringe organised by Warwick University at the Labour conference, one CBI representative admitted that over 80% of companies already make some form of share award to some of their workers. .....so it already happens folks and we haven't succumbed yet to the trotskyist hordes! Labour is merely suggesting that business do a bit more than it is already doing, bringing the laggards up to the standard of best practice and ensuring that all workers at all companies benefit to a more meaningful extent.

If that was genuinely what they were suggesting, I could see more of a point in it. Employee share ownership and / or bonus schemes distributing a proportion of overall profits to employees are tried and tested methods of improving employee engagement which is usually a win-win for everyone.
What labour are proposing is for the government to expropriate 10% of every company with a £500 per employee per year sweetener. If the dividends are already higher than £500 per employee then all the incentive provided by a traditional profit share scheme go away.
Much more importantly, what also goes away is every multinational currently headquartered in the UK, any incentive for any company to expand above 249 workers and a large proportion of the global capital that comes to London (and thereby provides a very significant proportion of the UK tax take) because of our reputation for stability, rule of law and not randomly seizing people's assets

zagfles

Moby wrote: »

Labour’s proposals are based on the principle that when a company does well and generates a profit and pays a dividend, it should share a tiny proportion with the workers responsible for its success.

No they aren't. They're a very thinly disguised tax rise.

No normal person would object to this. Given the UK’s well documented problems with pay stagnation, low productivity and huge pay gaps between those at the top and everybody else, these are proposals that put a bit more money in workers’ pockets, and link a small proportion of their pay to company performance. It's hardly revolutionary! The typical CEO is paid 160 times the average UK worker.


It’s worth considering how little is actually being asked of businesses through these proposals. Under Labour’s plans, they would transfer a tiny amount of equity (1% per year) to an ‘inclusive ownership fund’ run on behalf of workers, until the fund owns 10% of total equity. In other words, workers will have some ownership of the company (and therefore some say in the governance) but not a controlling stake. They would take a small share of dividends, but other shareholders would still get at least 90%.

You missed the bit about the £500 cap, with the rest going to the state.

At a fringe organised by Warwick University at the Labour conference, one CBI representative admitted that over 80% of companies already make some form of share award to some of their workers. .....so it already happens folks

Err, of course it does. We got a profit share of around £3k each last year. That was not far off 10% of company profits. Under this hairbrained scheme, we'd probably just get the basic £500 with the rest handed over to the state, as I doubt the company will maintain the profit share on top of handing over 10% of profits mainly to the state.

So instead of getting £3k, we'd get £500. Brilliant. It's a tax on workers, not the company.

Moby

OldMusicGuy wrote: »

Just read the earlier posts and the Shell example. Labour's plan appears to no more than a tax with a small portion being given to "workers". The equity is confiscated and owned by the government, not the workers. Workers do not own shares, they are given a small amount from the fund by the government (£500), the government keeps the rest to spend on whatever it wants.

If Labour genuinely wanted to benefit workers, they would force companies to introduce more inclusive share ownership schemes. Tying this to executive share schemes might be a good way of ensuring that there is some balance between the masses of shares given to execs and the ability of workers to genuinely participate in the success of the company. However, Labour is taking large amounts of cash from companies and pension funds to blow on public sector spending while trying to dress it up as "employee share ownership". IMO they are just as bad as greedy execs, they are taking most of the money for themselves, not the workers.

They are not taking it for themselves. They would be a democratically elected Government. Worker voice in corporate governance structures is a pillar of business practice in almost every other country in Europe, so bringing the UK up to the level of Germany or Sweden is hardly controversial. Mandating a share of dividends to workers effectively redistributes from one set of shareholders (existing investors) to another (workers).

Moby

Triumph13 wrote: »

Much more importantly, what also goes away is every multinational currently headquartered in the UK, any incentive for any company to expand above 249 workers and a large proportion of the global capital that comes to London (and thereby provides a very significant proportion of the UK tax take) because of our reputation for stability, rule of law and not randomly seizing people's assets

To accept this is to believe that our biggest companies are run by such greedy and venal individuals, that they will do whatever is necessary – including restructuring their entire business model or re-locating major operations – just to keep every penny of their profits for executives and wealthy investors, rather than sharing a tiny proportion with their workers. This is quite an ironic position to be held by groups who frequently accuse the left of being ‘anti-business.’

Moby

zagfles wrote: »

No they aren't. They're a very thinly disguised tax rise. You missed the bit about the £500 cap, with the rest going to the state. Err, of course it does. We got a profit share of around £3k each last year. That was not far off 10% of company profits. Under this hairbrained scheme, we'd probably just get the basic £500 with the rest handed over to the state, as I doubt the company will maintain the profit share on top of handing over 10% of profits mainly to the state.

So instead of getting £3k, we'd get £500. Brilliant. It's a tax on workers, not the company.

It's both and rightly so! The state of services in this country are a national disgrace. Labour's plans to address these issues may not be popular on a money saving forum but they are getting more and more traction in the country at large!