Mcdonnell proposes fund for workers as part-owners
BRITISH workers could be up to £500 a year better off under Labour’s plan to expand employee ownership of big firms, John Mcdonnell will say today.
In his keynote speech to conference, the shadow chancellor will set out how making workers part-owners of their company could substantially boost their incomes.
Under Labour’s plans, every company with more than 250 employees would be expected to create a so-called “inclusive ownership fund”.
Mr Mcdonnell will pledge that dividend payments from the scheme would, by the end of Labour’s first term in office, be worth up to £500 a year to workers.
The frontbencher will also claim the whole of society should benefit, with more than £2 billion extra made available for public services and social security from capping dividend payments at £500 and putting the rest into a social dividend.
“Workers, who create the wealth of a company, should share in its ownership and, yes, in the returns that it makes,” the shadow chancellor is expected to say. “The evidence shows that employee ownership increases a company’s productivity and encourages long-term thinking.
“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.
“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.”
Mr Mcdonnell calculated the dividend payments workers would receive would be up to £500 a year. “That’s 11 million workers each with a greater say, and a greater stake, in the rewards of their labour,” he will say.
Mr Mcdonnell will argue it is not just the workers who create profits, “it’s the collective investment that we as a society make that enables entrepreneurs to build and grow their businesses, maintaining the roads and investing in the infrastructure we rely upon, educating the workforce, caring for them when they’re sick and investing in the research and development that enables technological innovation.
“So, we believe it’s right that we all share in the benefits that investment produces.”