It's written in the stars. Except when it isn't...
This time last year I made a pretty bold forecast in the area of remuneration and reward.
I forecast that 2017 would bethe year when theBritish government announcedsome pretty punchytax-driven policy initiatives encouraging the development of employee profit sharing schemes and wider employee share ownership.
You can read my first 2017 blog here.
"Boldness be my friend: Arm me audacity from head to foot!", wrote Shakespeare. Well, not this time. Not for me... or Theresa May.
The June 2017 general election result changedeverything.
Anyhope Iharboured thatTheresa May'sgovernment would have the strength and vision to radically reform thedomestic agendaevaporated at approximately 10.01pm on election night as theexit polls forecast a hung parliament.
Even before the general election the whole of Whitehall was consumed by theenormous legal, technical and practical implications of making Brexit happen.
If there was very little government bandwidth to pursueradical new policy initiatives before the general election,a Prime Minister fighting forher political life for the remainder of 2017 washardly going to bethe catalyst either.
Hope springs eternal
But, the problems of intergenerational fairness, inequality, and a growingsense that capitalismisn't working, have notgone away.
If anything, the problems have become amplified duringthe course of 2017, most obviously manifesting themselves in the formofCorbynism.
One of the better quotes froman MPlast year was: "How canmillennials believe in capitalism when they have littlechance of owning any capital?"
It is self-evident to me and many others that capitalism needs new expression, anew fan base, a makeover.
If politicianswant to get elected in the future,they will need new solutions todeal withthe quantitative easing-driven rise in wealth inequality.
And if a by-product of quantitative easing is higher inflation, then 2018 will probably see workers demanding a biggerslice of the pie - and politicians will want to make sure that it happens.
So I remain convinced thatwe are going to see more state intervention as politicians look to shift profits away from executives and shareholders to workers.
Andwhat better way to achieve this shift than throughamore diverseform of business ownership - employee ownership.
Shared capitalism
Employee ownership (to which I will also add profit sharing) works on the basis that spreading ownership of capital,orembedding the right to claim a share of pure profit,is more ethical, productive, democratic and generationally fairer, than whatwe have at the moment - what I like to call shared capitalism.
It is about recognising that in an era of globalisation and disruptive technology, the power and advantagesof owning and having access to capital has the potential to overlook, or even neglect, the valuable contribution made by all employeesatkeeping their employer'sshow on the road.
The idea of sharing ownership and profits with a broad base of employees is of course hardly new, but it is an idea that can easily be upgraded, refreshed and modernised. For example:
- What about offering companies tax incentives for operating an employee share plan or profit-sharing plan?
- How about makingSAYE plans (the most popular share plan for ordinary employees) completely exempt from capital gains tax?
- Or, should we makeopting into an employee share plan compulsory? Similar to pension auto- enrolment, employees would be opted into an employee share plan and would have to physically opt out if they wished to be excluded from participation.
- Howabout expanding the very successful and flexible EMI share option regimeinto larger companies or allowing EMI to operate at the subsidiary level?
- Could webetter incentivise the growth ofemployee ownership trusts? EOTs are growing in popularity but that popularity could easily be accelerated. The think tank IPPR has put out an interesting research document on the subject.
- What about giving employees the 'right to request' that an employee share plan should be established?
I may have called it too early last year (and probably this year as well), but I am in no doubt that increased employee ownership and profit sharing will become acommon feature of the corporate and business landscape.
To quote Shakespeare again: "True hope is swift, and flies with swallow's wings."
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