I read with interest Aidan Ruff’s letter about his pension arrangements and his concerns about Labour’s proposals for companies to provide shared ownership and representation for the workforce, (Northumberland Gazette, October 4).
Under Labour’s plans, legislation would require UK private sector companies with 250 or more employees to transfer at least one per cent of their ownership into a fund each year, up to a maximum of 10 per cent.
Smaller companies would be able to set up a fund on a voluntary basis.
Labour calculates that some 10.7 million people, or 40 per cent of the private sector workforce, would initially be covered by the scheme.
Dividend payouts of up to £500 would be made at a flat rate to all employees.
Any further dividends would go to a national fund to pay for public services and welfare.
The funds would be held and managed collectively and cannot be sold or traded.
Workers’ fund representatives would have voting rights in companies’ decision-making processes in the same way as other shareholders, including pension funds holding shares.
The aim is to increase the involvement of workers in the company, to give a stake in the company to its workforce, and in the longer term, to improve the prospects of the company.
Labour will also increase the minimum wage to £10 per hour
Your readers will be aware that too many companies have been driven by short-term considerations, maximising the dividend and share price and executive pay, with little investment in the company’s future or the pay and conditions of their staff.
The end result is low growth, low productivity, and static or falling real wages.
To make matters worse, Government policy under the Conservatives since 2010 has been to cut public services and investment in skills and infrastructure.
This was recently highlighted in your reporting of cuts in school spending per pupil (October 4).
Fortunately for Mr Ruff and others with property and investments, the huge amounts of Government money pumped into supporting asset prices via ‘quantitative easing’ has maintained a steady rise in stocks and shares (25 per cent rise in the FTSE 100 since 2010) and in property (UK 40 per cent rise since 2010).
Alongside this, millions of working age households have no savings, increasing debt, and because of low wages are forced to claim benefits.
Such benefits are still being cut and will be cut further under forthcoming Universal Credit changes.
Many pensioners rely solely on the state pension and if they need care at home, they will find this increasingly difficult to access.
In these circumstances, I believe that Labour’s proposals for involvement of working people in the running of companies, for investment in skills, housing and public services, and giving more people the opportunity to save and afford a home, are absolutely what we need after years of austerity and widening inequality of wealth and opportunity.