It’s just occurred to me

10% of the equity of firms over 250 people goes to the workers.

The Guardian is a ltd, with more than 250 staff. Thus Scott Trust Ltd will lose 10% of Guardian equity.

a) The staff will be so chuffed to get equity in a loss maker.

b) Actually, Scott Trust Ltd is no longer a charity, it’s a business. So staff get 10% of the equity there.

Hmm….

18 thoughts on “It’s just occurred to me”

  1. I think i’ve missed the detail, or maybe they haven’t offered it. If companies x and y are owned by company z, in which company do workers of x, y and z get shares? Is the answer different if z is foreign? If x is profitable and y is not?

    As you said somewhere else, it’s both trivial, because of the tiny amounts involved for the government and the workers, and huge, because of the impact on business planning. It’s also splendidly mean-spirited – capping the pay-outs at a flat amount means workers in a success don’t share in it, through the scheme anyway. Plus we all know companies will plateau at 249 workers. All, as far as I can tell, to boost the power of union reps and works council members, who will wind up paid to manage “the workers’” shares.

  2. Uber drivers are workers, but not employees, if I’ve understood the definition right.
    Do they get 10% of the UK company which I think makes a profit, or 10% of 10% of the American parent which doesn’t afaik assuming there’s some formula around 1/10th of Uber drivers worldwide being in the UK
    And what happens when workers move in and out of the company. Does the new worker’s share handout eat into the 10% of the other workers thus diluting their holding. The other workers aren’t going to be too happy about that if a workforce doubles in size. Or do the existing workers keep all of their 10% and the new ones get nowt. I’m sure the UK party of Dependency Socialism have an answer to these in their massive document

  3. “This is simply part nationalisation”

    Correct. And the ‘workers’ are being thrown a sop of ‘up to’ £500/each (ie a tenner a week max) to provide cover for the State’s wealth grab.

    The workers will not own the shares, and cannot sell them, they will not be able to vote their proportion at the AGM as they see fit. The shares would be voted the way that John McDonnell wants, via a system of ‘workers democracy’ that resembles a strike vote circa 1975.

  4. Hitler was much more intelligent in his socialism than the Soviet communists or the Labour Party. He’d twigged that the point was to control the companies, not to nationalise them.

    Will this latest wheeze mean that the government will control companies by being the biggest shareholder? Or will it just mean endless disruption by an important, malevolent, incompetent shareholder?

    And: why should be believe that they’d stop at 10%?

  5. ” He’d twigged that the point was to control the companies, not to nationalise them.”

    That is the theme of the past 20+ years. Why as a govt do you need to own a business when you can just regulate them minutely to force the behaviour you want. As a bonus you get to blame the company when your bad idea screws customers.

  6. “What happens if you leave the company? Does your equity get taken off you?”

    You get SFA as you never owned it, in the same way none of us have a share in the ‘publicly owned’ Network Rail.

  7. Forget complexities like multiple chains of ownership, staff coming & going, etc. Staff get 10% of voting rights and 10% of profit distributions (dividends), but not actual shares.

    It only applies to the company which signs your PAYE payslip, so expect intense innovation in corporate structures, pursued a few years later by HMRC backdating all the rules to catch them out. Innocent bystanders will be worst hit, but they’ll be evil companies like temping agencies for nurses which were only ripping off our beloved NHS (peace be upon her). The likes of Uber / Google will be heard laughing from their Dublin / Amsterdam offices, as they dance merrily around HMRC.

    But yes, why stop at 10% only? 50% has a nice ring to it.

  8. It doesn’t cover foreign-owned companies, so if you register the company in Dublin (a la Murphy) you aren’t affected.
    LLPs that aren’t companies but have thousands of workers?
    Self-employed that have people working for them?
    Director-controlled companies that employ their wives and children instead of paying themselvbes dividends to avoid tax?

  9. AGM votes for zero dividend, issues mores shares/splits shares. If you want cash sell some of your shares. Government gets nada cash.

  10. As a letter writer in The Times pointed out it makes no sense to invest in the company you work for because if it goes bad you lose your job as well as your investment.

  11. Bloke in North Dorset

    Smithy,

    As I pointed out elsewhere, you’d think Labour would get that after Cap’n Bob’s raid on the Mirror pension fund and the well publicised Enron collapse.

  12. John77 – why would anyone employ wives and children rather than paying themselves dividends to avoid tax?
    Dividends also have a tax free allowance and its common enough for family members to be shareholders.

    Best way of avoiding tax is to keep taxable profits down.

  13. Don’t forget you’re allowed to kill people who think like this. In fact we spent 1939–45 doing just that.

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