Experts urge Labour to support Employee Share Schemes for a £2.4bn UK boost
After Rachel Reeves pledged that Labour would fight the next election on the economy, experts are calling on Labour to pledge its support for widening employee share schemes to generate a £2.4bn boost to the UK economy.
Speaking at the Labour Conference, the Shadow Chancellor said Labour would grow the economy from “the bottom up and the middle out” in the “interests of working people”.
In response, business leaders have called for Labour MPs to support a campaign to encourage more businesses to start share schemes. Led by equity specialists, Vestd, the campaign aims to supercharge the growth of startups and SMEs.
Vestd’s analysis shows that if 250,000 more businesses set up share schemes, it could generate a £2.4bn boost to the UK economy.
The Employee Share Ownership (Reform) Bill, introduced to Parliament by Labour MP Sir George Howarth in November 2022, aims to open up employee ownership share schemes to lower-income workers and push businesses to be more transparent about their share ownership.
Ifty Nasir, Founder and CEO of Vestd, said: “We work with thousands of high-growth companies and the Shadow Chancellor’s announcement of plans to speed up green energy, battery factories, and 5G projects will be welcomed across a number of sectors.
“Another key area where a potential Labour government could generate a significant amount of growth, without an increase in spending, is in driving participation in employee share schemes.
“Just 16,000 companies currently operate share schemes backed by the government. With high competition for the best talent, it’s vital for employers to recognise the clear advantages they bring, particularly in the current economic climate where businesses are facing chronic skills shortages and low productivity.
“Giving people a genuine stake in the company they work for is a powerful motivator – and a large reason why employee share schemes are seeing a surge in popularity, up 90% over the last decade.
“If more businesses set up share schemes it could offer a huge boost for the UK economy, and if share schemes became the norm, the uplift would be like nothing we’ve ever seen before.”