Labour declares war on business with plans to force firms to pay £7billion ‘social dividends’ tax
The plans would force some companies to hand over 10 per cent of their shares
LABOUR declared war on business with plans to force firms to pay out up to £7billion a year in a ‘social dividends’ tax.
Shadow Chancellor John McDonnell will unveil plans for new law to make companies hand over 10 per cent of their entire share base to an employee fund.
Every worker will be allowed up to £500 a year from the dividends paid out on the shares. Payments above this level will be collected by Labour for public services and benefits - an estimated £2 billion a year. Any firm with more than 250 staff will have to take part.
Only businesses nationalized by a Labour government - and foreign owned firms - would be exempt.
A Labour spokesman said: “We want to strengthen the collective power of workers." But business chiefs reacted with alarm last night claiming it will clobber investment and cost jobs. CBI chief Carolyn Fairbairn stormed: “This diktat on employee share ownership will only encourage investors to pack their bags and will harm those who can least afford it.
The policy would represent a mammoth transfer of wealth. The stock market is valued at around £3.95trillion – meaning hundreds of billions of equity will be forced out of company hands.
In the first year, companies from Vodafone to British Airways will hand over 1 per cent of their shares to their own “Inclusive Ownership Fund’ building up to 10 per cent within a decade.
Labour said there are an estimated 10.7 million workers who stand to benefit.
The announcement came hours after Mr McDonnell told a fringe meeting at Labour Party conference that he wanted to “radicalize” the party manifesto to lay the foundations for a truly Socialist Government.
Tory Treasury Secretary Liz Truss said it was “yet another tax” that would make it harder to find the money to hire new staff.
In a statement, Mr McDonnell said: “Workers, who create the wealth of a company, should share in its ownership and yes, in the returns that it makes.
“We believe it’s right that we all share in the benefits that investment produces.”
Jeremy Corbyn told activists the rich were living on “borrowed time”. Speaking at a rally for his hard left Momentum campaign group he said a Labour Government “was coming” for the “very richest in society”.
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