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Labour's Staff Share Plan May Not Be as Generous as It Seems

  • Party wants companies to hand 10 percent of equity to staff
  • Firms could cut wages, jobs to maintain profitability: lawyers
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U.K. Shadow Chancellor John McDonnell speaks with Bloomberg Television.(Source: Bloomberg)
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A Labour proposal to force companies to hand 10 percent of their equity to workers if elected may not be as generous as it seems, with businesses likely to cut wages and jobs to counter any hit to profits, according to U.K. lawyers.

“If the employer is forced to put these arrangements in place it is a good bet that they will need to re-balance the scales elsewhere to maintain their profitability,” said Crowley Woodford, a London employment lawyer at Ashurst. “The likely net effect is that it will suppress basic salary and in a worst case lead to job losses.”