“WOLF IN SHEEP’S CLOTHING”
Under the plans, individuals’ dividend payments would be capped at 500 pounds a year. The rest would be transferred back into public services in the form of a “social dividend” that Labour estimated being worth 2.1 billion pounds by the end of its first term in government.
Stephen Ratcliffe, Employment Partner at law firm Baker McKenzie said the proposal was “a wolf in sheep’s clothing”.
“The headline point about giving workers equity is a clever disguise for a potentially enormous levy on business, since any dividends over the 500 pound cap paid to employees will go into the public coffers,” he said.
McDonnell also promised to do more to tackle what he described as a “minority” of companies who were avoiding paying their taxes “on an industrial scale”.
Labour would mobilize shareholder power, bringing together organizations from churches to trade unions and pension funds to put pressure on companies, he said. It would also demand companies sign up to a Fair Tax Mark standard to demonstrate they pay their fair share of taxes.
“Make it clear and make it loud, the warning to the tax avoiders is: the game is over,” he said.[mr/reuters]