Lancashire business chiefs slam Labour's shares plans

John McDonnell, shadow chancellor
John McDonnell, shadow chancellor
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Business leaders have criticised the Labour party’s proposals to expand employee ownership schemes of large firms.

Shadow Chancellor John McDonnell has outlined plans to order private companies to give away up to 10 per cent of their shares to their workers.

But the move has been criticised by Chamber of Commerce chiefs and the CBI.

Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce, said: “These proposals will do little to benefit workers.

“Investors will simply put their money elsewhere or businesses will find other ways in which to reward shareholders.

“Britain needs an enterprising environment to flourish with investment in skills and infrastructure and not imposed draconian measures that will hurt businesses and the workforce alike.

“Why would investors here in the UK, and even more worryingly in boardrooms across the world, choose to put a penny into Britain in the knowledge that their shareholdings will be diluted, and their boards will be subject to significant government interference?”

Carolyn Fairbairn, CBI Director-General, said: “Labour must meet business halfway or they will crack the foundations of this country’s prosperity.

“No one in business would disagree with the fundamental aims of these policies – to engage and motivate employees, deliver for customers and share prosperity.

“But with Labour’s current proposals, the fallout for the UK, its workers and customers would be a drop in living standards.

“From renationalisation to dilution of shares, Labour seems determined to impose rules that display a wilful misunderstanding of business.

“Their policies would immediately reduce the value of shares owned by ordinary people by over 10 per cent and hobble UK ambitions to compete on a global stage.”