UK Labour Party Unveils Employee Ownership Initiatives

The Conservative Cameron government in the United Kingdom has created a series of new incentives for broad-based employee ownership, including incentives for companies and business owners to use an ESOP-like mechanism to transfer ownership to employees in closely held companies.

Now the Labour Party is weighing in with the Hunt Review (PDF). The review looks at a wide variety of shared capitalism measures (what is often called mutualisation in the UK). The section on ESOPs calls for a number of new incentives, including:

• Adding tax incentives for existing plans encouraging public companies to contribute shares to employees and/or encourage employees to buy them at a discount.
• Extending eligibility for tax incentives for ownership transition to companies owned by private equity investors.
• Making existing plans that provide incentives for sharing equity with selected employees dependent on a commitment to move toward broader ownership.
• Creating more transparency for financial information in employee ownership companies.
• Creating additional tax benefits for companies that have more employee involvement in decisions.
• Establishing or funding a government institute to educate companies and employees about employee ownership.