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  • FIRST POST
    • Mick70
    • By Mick70 17th Nov 19, 12:23 PM
    • 156Posts
    • 16Thanks
    Mick70
    Labours pension threat - daily express
    • #1
    • 17th Nov 19, 12:23 PM
    Labours pension threat - daily express 17th Nov 19 at 12:23 PM
    https://www.express.co.uk/news/politics/1205419/state-pension-news-jeremy-corbyn-labour-manifesto-general-election-news
Page 3
    • bostonerimus
    • By bostonerimus 18th Nov 19, 2:29 PM
    • 3,479 Posts
    • 2,784 Thanks
    bostonerimus
    People get worried by the policies of political parties, but you'll have to live with whatever landscape emerges. Maybe people should worry more about things they have a bit more control over and that's fees, how much they spend, their saving rate, simple portfolio construction, and how they manage their portfolio. They have a far more to do with financial freedom than anything government does. Financial freedom only really occurs when you stop worrying about money and that's in your control.
    Misanthrope in search of similar for mutual loathing
    • Mordko
    • By Mordko 18th Nov 19, 3:10 PM
    • 677 Posts
    • 511 Thanks
    Mordko
    I take it you mean the plan to create employee ownership funds in large companies? Shares will be acquired at 1% per year until the fund reaches 10% and there's no reason to think those shares won't be aquired from willing sellers at market value.

    It's not a policy I agree with particularly but describing it in the way you have is billy basic scare mongering at best, and could also be described as outright lying. If you want to convince people not to vote for Jeremy you'll have to be a bit more honest.
    .
    Originally posted by ruperts
    Firstly, “large company” based on Labour definition = over 250 people.
    Secondly, what is your source? Everything I’ve seen talks of legislation to force companies to give 10% of shares to employees, aka confiscation from shareholders. In the words of FT:

    “A Labour government would confiscate about £300bn of shares in 7,000 large companies and hand them to workers in one of the biggest state raids on the private sector to take place in a western democracy, according to analysis by the Financial Times and Clifford Chance.”

    https://www.ft.com/content/dc17d7ee-ccab-11e9-b018-ca4456540ea6

    Guardian:

    “Under the scheme, every company with 250 or more employees will be expected to create an “inclusive ownership fund” (IOF) under a future Labour government, John McDonnell will say.,”

    There is nothing about “acquiring from willing sellers at market value”. You seem to be mistaken.

    “ If you want to convince people not to vote for Jeremy you'll have to be a bit more honest.”

    I don’t. Anyone still willing to vote for Jeremy is an immoral fool. Part of me wishes that these people get Jeremy but I am sorry for the decent people. Merely expressing my opinion. Certainly not trying to change anyone’s mind.

    Also, your “outright lying” and “scare mongering” accusations = a lot of tosh.
    Last edited by Mordko; 18-11-2019 at 3:22 PM.
    • coyrls
    • By coyrls 18th Nov 19, 3:35 PM
    • 1,292 Posts
    • 1,431 Thanks
    coyrls
    In the very Guardian article you quote https://www.theguardian.com/business/2018/sep/24/how-would-labour-plan-to-give-workers-10-stake-in-big-firms-work
    Every company with more than 250 employees in Britain would be required to transfer shares into an “inclusive ownership fund” that would be controlled by its workers. Firms would transfer at least 1% of ownership into the fund each year, up to a maximum 10%.
    • Thrugelmir
    • By Thrugelmir 18th Nov 19, 3:47 PM
    • 65,849 Posts
    • 57,992 Thanks
    Thrugelmir
    Shares will be acquired at 1% per year until the fund reaches 10% and there's no reason to think those shares won't be aquired from willing sellers at market value.
    Originally posted by ruperts
    Acquired by whom? If it's the Company then the cost is a direct hit to the Profiit and Loss account. Which then impacts the value of the shares held by other parties. Likewise will reduce distributable reserves. Losers are going to be the thousands of average people who are dependent on these companies for their pension savings. (Then there's private companies nonlisted companies to be considered.........)

    At least John McDonnell has admitted Right to Buy is an unworkable concerpt therefore won't be included in the Labour manifesto. Concern is what other mad cap schemes have been dreamt up by this clueless bunch of clowns. That have yet to shown daylight.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Mordko
    • By Mordko 18th Nov 19, 3:58 PM
    • 677 Posts
    • 511 Thanks
    Mordko
    Not exactly sure what your point is. My point is that government enforced “transfer” of property from one set of owners to another, without any compensation or anything at all in return = confiscation. This particular confiscation of company equity is on a massive scale.
    • ruperts
    • By ruperts 18th Nov 19, 5:11 PM
    • 2,675 Posts
    • 5,225 Thanks
    ruperts
    Firstly, “large company” based on Labour definition = over 250 people.
    Secondly, what is your source? Everything I’ve seen talks of legislation to force companies to give 10% of shares to employees, aka confiscation from shareholders. In the words of FT:

    “A Labour government would confiscate about £300bn of shares in 7,000 large companies and hand them to workers in one of the biggest state raids on the private sector to take place in a western democracy, according to analysis by the Financial Times and Clifford Chance.”

    https://www.ft.com/content/dc17d7ee-ccab-11e9-b018-ca4456540ea6

    Guardian:

    “Under the scheme, every company with 250 or more employees will be expected to create an “inclusive ownership fund” (IOF) under a future Labour government, John McDonnell will say.,”

    There is nothing about “acquiring from willing sellers at market value”. You seem to be mistaken.

    “ If you want to convince people not to vote for Jeremy you'll have to be a bit more honest.”

    I don’t. Anyone still willing to vote for Jeremy is an immoral fool. Part of me wishes that these people get Jeremy but I am sorry for the decent people. Merely expressing my opinion. Certainly not trying to change anyone’s mind.

    Also, your “outright lying” and “scare mongering” accusations = a lot of tosh.
    Originally posted by Mordko
    Details about how the shares would be acquired have not been released. You (and the FT) are assuming they will be "confiscated" or transferred without compensation, but that seems an extreme assumption. Even if that's what they wanted to do, I'm not sure that method would survive the legal challenges it would inevitably spawn.

    More likely in my opinion is that the shares would be bought by the fund on the open market. At 1% per year up to a maximum of 10%, there will be more than enough willing sellers to buy from, so it would hardly make any difference to anyone.

    Like I said I don't particularly like the policy, but that's mainly because of the dividend cap. If employees are going to own shares then they should get the full benefit. But I think the overall aim of the policy, to give employees more influence in the companies they work for, is a good one.
    • Mordko
    • By Mordko 18th Nov 19, 5:37 PM
    • 677 Posts
    • 511 Thanks
    Mordko
    Details about how the shares would be acquired have not been released. You (and the FT) are assuming they will be "confiscated" or transferred without compensation, but that seems an extreme assumption. Even if that's what they wanted to do, I'm not sure that method would survive the legal challenges it would inevitably spawn.

    More likely in my opinion is that the shares would be bought by the fund on the open market. At 1% per year up to a maximum of 10%, there will be more than enough willing sellers to buy from, so it would hardly make any difference to anyone.

    Like I said I don't particularly like the policy, but that's mainly because of the dividend cap. If employees are going to own shares then they should get the full benefit. But I think the overall aim of the policy, to give employees more influence in the companies they work for, is a good one.
    Originally posted by ruperts
    So, you are just making stuff up and calling others “liars”. Makes sense. In the real world McDonnell said that a piece of legislation will be passed to force the companies to transfer shares into “inclusive ownership fund”.

    How do you see “compensation”? Taxpayer footing the bill? That’s not happening because there is a limit on how much a country can borrow without defaulting. Then there is the question “why workers of 200 employee companies and retirees should subsidise workers of 300 employee companies?”

    Re discussion on worker influence . Workers have different interests from shareholders. Their primary incentive is always going to be salary and employment (except in very specialized areas like startup software companies). I’ve seen how such companies operate. Bankrupt companies keep going forever. Employee-managed Banks keep giving them cash, because they are also interested in drumming up more business and employment over profit. There isn’t a shareholder who will keep his money in Britain under this scenario. UK is heavily dependent on foreign inflows because someone has to fund the deficit. UK will default soon after the news that Corbyn was elected.

    Anyone thinking Corbyn has a chance of becoming PM should be selling UK assets around about now.

    As for legal problems with this and other Labour ideas... Sure. None of it is feasible under the current system. The system will have to be changed.

    https://www.stewartslaw.com/news/what-does-labours-inclusive-ownership-fund-mean-for-business/
    Last edited by Mordko; 18-11-2019 at 5:43 PM.
    • Thrugelmir
    • By Thrugelmir 18th Nov 19, 6:17 PM
    • 65,849 Posts
    • 57,992 Thanks
    Thrugelmir
    But I think the overall aim of the policy, to give employees more influence in the companies they work for, is a good one.
    Originally posted by ruperts
    One suspects that the influence will come from the granting of increased Union powers. Given history not a welcome thought. Corporate accountability and governance issues can be addressed through other avenues without the need to hit shareholders.
    Last edited by Thrugelmir; 18-11-2019 at 6:19 PM.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • bostonerimus
    • By bostonerimus 18th Nov 19, 6:36 PM
    • 3,479 Posts
    • 2,784 Thanks
    bostonerimus
    But I think the overall aim of the policy, to give employees more influence in the companies they work for, is a good one.
    Originally posted by ruperts
    This sounds like a Thatcher policy. Back in the 1980s she justified selling off publicly owned industry in part by promoting individual stock ownership. The fact that most of the benefits of these sell offs went to a very small number of rich people could be used to argue for the shoe being ion the other foot now to redress the inequity.

    I say lets increase the public's ownership of shares, surely that's a very "conservative" individual liberty thing to do. So McDonald is really a Thatcherite.
    Last edited by bostonerimus; 18-11-2019 at 6:39 PM.
    Misanthrope in search of similar for mutual loathing
    • ruperts
    • By ruperts 18th Nov 19, 6:36 PM
    • 2,675 Posts
    • 5,225 Thanks
    ruperts
    So, you are just making stuff up and calling others “liars”. Makes sense. In the real world McDonnell said that a piece of legislation will be passed to force the companies to transfer shares into “inclusive ownership fund”.
    Originally posted by Mordko
    No I have not made anything up. I've said that the method of acquiring the shares has not been confirmed and that it seems likely to me that they will be purchased at market rate. You on the other hand have pretended to know without doubt that the shares will be taken without compensation, something for which you have no evidence at all; you simply made it up. If you'd given that as your opinion, then it's a different story, but you presented it as a known fact when it's anything but.
    • bostonerimus
    • By bostonerimus 18th Nov 19, 6:38 PM
    • 3,479 Posts
    • 2,784 Thanks
    bostonerimus
    FYI to Mordko and ruperts....it's getting close to panto season so let me be the first to say

    "Oh no I didn't"

    "Oh yes you did" etc.
    Misanthrope in search of similar for mutual loathing
    • ruperts
    • By ruperts 18th Nov 19, 6:38 PM
    • 2,675 Posts
    • 5,225 Thanks
    ruperts
    One suspects that the influence will come from the granting of increased Union powers. Given history not a welcome thought. Corporate accountability and governance issues can be addressed through other avenues without the need to hit shareholders.
    Originally posted by Thrugelmir
    It's very welcome to me given how superbly well similar models work in the present day for employees in places such as Germany, where workers are paid substantially more than their UK counterparts while working fewer hours, and consumer prices are also lower meaning they're better off in every way.
    • Mordko
    • By Mordko 18th Nov 19, 6:59 PM
    • 677 Posts
    • 511 Thanks
    Mordko
    No I have not made anything up. I've said that the method of acquiring the shares has not been confirmed and that it seems likely to me that they will be purchased at market rate. You on the other hand have pretended to know without doubt that the shares will be taken without compensation, something for which you have no evidence at all; you simply made it up. If you'd given that as your opinion, then it's a different story, but you presented it as a known fact when it's anything but.
    Originally posted by ruperts
    “We will legislate for large companies to transfer shares into an ‘Inclusive Ownership Fund’. The shares will be held and managed collectively by the workers.”

    https://www.huffingtonpost.co.uk/entry/jeremy-corbyn-government-would-force-all-big-firms-to-hand-over-10-of-shares-to-workers_uk_5ba7c8f9e4b0181540de1bf3

    “Workers would get up to £500 a year under Labour plans to give them a share of the profits made by employers, Shadow Chancellor John McDonnell is to announce.

    Large firms would have to GIVE AWAY shares to a new fund created for the benefit of staff.”

    “They’re likely to go down badly with existing shareholders. Business leaders may also point out that they already contribute to society by paying corporation tax on profits, national insurance on staff they employ and business rates on properties they use, as well as creating jobs.”

    https://www.birminghammail.co.uk/news/midlands-news/labour-give-workers-up-500-15189343

    So, every single source, including McDonnell, states that the transfer will be by legislation forcing companies to do the transfer. Not one source except you is talking about buying shares. That qualifies as “made up”, see item 2. https://www.yourdictionary.com/made-up

    On a side note, the last article talks about the limit of 500 pounds per employee, the rest going to the state. That’s important because in practice the vast majority of the 10% ownership will be with the state. In other words “nationalisation”. Worker ownership is a cover.
    • zagfles
    • By zagfles 18th Nov 19, 7:13 PM
    • 14,782 Posts
    • 13,251 Thanks
    zagfles
    My employer like many other large companies already have a profit share, it's not contractual but has paid out well over £500 most years in the 15 years or so it's been running. If this daft scheme ever came about, I really doubt they'd keep the profit share going together with this, so the workers would get less than they do now.

    It's basically a thinly disguised hike in corporation tax with the govt getting most of the money, with a few crumbs for the workers which will probably get taken away in other ways.
    • kangoora
    • By kangoora 18th Nov 19, 10:04 PM
    • 878 Posts
    • 842 Thanks
    kangoora
    I'm certainly not in agreement of enforced purchase of 10% of a company being handed out to all employees but I worked for a large canadian company many moons ago. Yearly during the salary increase period, sometimes more often if share price was doing well, every line manager was given a small amount of shares/share options relevant to the size of his department for him to distribute as he saw fit between his direct reports.

    I'm sure the amount given to managers/directors was a lot more, however, it was nice to be given 100-200 shares every so often (if your face fit/work was regarded as good of course). At least the average joe working in tech support (for example) felt that he was valued and even if higher management kept getting their 1000's of share options at least 'some' of the company profits made it's way all the way down the ladder. As opposed to every other company I worked for where shares & share options were only ever given to managers starting at a fairly senior level.

    The company did go bankrupt about 5 years after I left though (probably not because of some free shares handed to lower paid employees however)
    • AlanP
    • By AlanP 18th Nov 19, 10:11 PM
    • 1,754 Posts
    • 1,401 Thanks
    AlanP
    People don’t click based on a webpage address. Address can be fgrthrthr55445 for all one cares. Google lists websites based on key words, which have nothing to do with the address.
    Originally posted by Mordko
    So, it's irrelevant that they put the State Pension phrase in their URL as opposed to a random set of letters / numerals then is it?

    I'm sure your proposed URL would have been just as effective at generating click throughs once shared on social media - NOT.
    • Mordko
    • By Mordko 18th Nov 19, 10:29 PM
    • 677 Posts
    • 511 Thanks
    Mordko
    Yearly during the salary increase period, sometimes more often if share price was doing well, every line manager was given a small amount of shares/share options relevant to the size of his department for him to distribute as he saw fit between his direct reports.
    )
    Originally posted by kangoora
    This typically happens in software or other business start-ups, when the company is short of cash but has big hopes. A large business paying bonuses with shares rather than cash usually indicates cash flow problems.

    Share options or discounted share purchase schemes are different and are usually designed to attract good managers, try and align staff interests with those of the company and enhance retainment of key staff. All of it is basically pay, which is not enforced by the government. Good businesses do it in a way that does not dilute shareholder ownership. If they do dilute then the markets punish them. Then there are partnerships which have key employees buy into the business.

    None of it resembles robbing retirees via enforced confiscation of 10% of equity in established businesses and transferring ownership to the state with a token nod to workers. Those kinds of experiments are not done in Canada. That’s Venezuela style nationalisation, when the government was taking larger and larger stakes in major companies.
    Last edited by Mordko; 18-11-2019 at 10:31 PM.
    • Thrugelmir
    • By Thrugelmir 18th Nov 19, 11:00 PM
    • 65,849 Posts
    • 57,992 Thanks
    Thrugelmir
    It's very welcome to me given how superbly well similar models work in the present day for employees in places such as Germany, where workers are paid substantially more than their UK counterparts while working fewer hours, and consumer prices are also lower meaning they're better off in every way.
    Originally posted by ruperts
    Germany didn't even have a minimum wage until January 2015. Prior there were 3 distinct classes of pay rates. Needless to say those (i.e. Turkisk immigrants) in the bottom tier were treated very badly. Used effectively as cheap labour.

    The German economy appears to be stalling more recently. Perhaps the increased wage pressures have reduced competitiveness. Even Luthansa has rebased it's engineering division in Asia. As cheaper to perform routine maintenance there than in it's homebase.

    Much of the old East Germany is in serious and terminal decay. The people trapped there might well disagree with your assertion that everything is better.
    ““there really is no such thing as ‘the future’, singular. There are only multiple, unforeseeable futures, which will never lose their capacity to take us by surprise.””
    ― Niall Ferguson
    • Malthusian
    • By Malthusian 18th Nov 19, 11:02 PM
    • 7,080 Posts
    • 11,406 Thanks
    Malthusian
    No I have not made anything up. I've said that the method of acquiring the shares has not been confirmed and that it seems likely to me that they will be purchased at market rate.
    Originally posted by ruperts
    You think that it is likely that Labour will pay taxpayers' money to bankers and rich people to acquire private company shares.

    Okily dokily then.

    What you personally choose to believe does not alter Labour policy.

    Which is as stated by McDonnell to confiscate 10% of shares of any company with more than 250 employees and pay the dividends to the state (minus an irrelevant pittance to the workers, which will be absorbed into their general remuneration, i.e. wages will go down to compensate).
    • Malthusian
    • By Malthusian 18th Nov 19, 11:13 PM
    • 7,080 Posts
    • 11,406 Thanks
    Malthusian
    Yearly during the salary increase period, sometimes more often if share price was doing well, every line manager was given a small amount of shares/share options relevant to the size of his department for him to distribute as he saw fit between his direct reports.

    [...]

    The company did go bankrupt about 5 years after I left though (probably not because of some free shares handed to lower paid employees however)
    Originally posted by kangoora
    I'm sure those lower paid employees who didn't or couldn't sell their shares in time were delighted to have been paid in worthless toilet paper all those years instead of cold hard cash. Meaning they spent a proportion of their time, equivalent to the proportion of their remuneration they accepted in the form of shares, working for free.

    This is why the majority of workers aren't paid in share options already. They don't want them. And with good reason. They aren't responsible for whether the company succeeds or fails so it's not equitable to be paid based on something they have 0.01% control over. And the lower your pay, the less capacity you have to absorb the loss of part of your remuneration if the company goes bust.

    Directors are in control, and as they are highly paid, they can still afford to hire someone to play the world's smallest violin for them if their incompetence leads to them losing thousands or millions in personal wealth.

    Companies would be very happy to save money by paying the rank and file in potentially worthless share options rather than more expensive cash, but they can't get away with it, except at the top level.

    And the odd exception like your doomed Canadian employer, who are the exception for a reason.

    ShareSave type schemes only make sense for an employee if you get a tax incentive and/or free shares from your employer to compensate you for the risk. Without those things you are just being paid with a spin on red or black instead of cash, which is worth less than the equivalent amount of cash. And even if you do have access to ShareSave, you should sell the shares and reinvest in something more diverse as soon as you can do so without penalty.
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