Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

Labour Should Be Campaigning For A Citizens’ Wealth Fund Instead Of A Worker-Ownership Plan

Stewart Lansley 25th October 2018

Stewart Lansley

Stewart Lansley

Perhaps one of the most ambitious – and controversial proposals – floated at Labour’s conference  was the plan to give workers a small ownership stake in the companies they work for. The proposal – which would entitle workers to a dividend payment up to a maximum payment of some £500 a year – has, perhaps unsurprisingly, been castigated by business leaders. According to CBI director Carolyn Fairbairn, the proposal will ‘set alarm bells ringing in boardrooms at home and across the world.’

Under the scheme, the businesses participating would gradually become part-owned by employees (at a rate of 1% a year up to a maximum of 10%). Ultimately, the proposed ‘Inclusive Ownership Fund’ would turn businesses into John Lewis-style workplaces, with employers given potentially new voting powers over company decisions. The share dilution proposed is often less than daily movement in today’s volatile global environment.

Part of the case for expanding shareholding amongst employees is that it would help tackle growing wealth inequality (which is twice as high as income inequality) and give workers a direct stake in the companies they work for. Policies to tackle the growing concentration of wealth, much of which is unearned, are long overdue and would help rebalance an economy too long weighted in favour of boardrooms.

But is the plan outlined by John McDonnell the best way of spreading capital ownership, and its gains, across society? The answer is no. The plan only applies to companies with more than 250 employees, many of which already operate some form of employee shareholding. As McDonnell acknowledged, his plan would benefit only 11% of employees. Large sections of the workforce – including the least paid and secure, the self-employed, those in small firms and those working in the public sector – would miss out. With the cap set at £500 per worker (many large firms pay much more than this), only a small proportion of the dividends accruing to the firm-based fund would go to the workers; the lion’s share would go to the Treasury. This sounds like a heavy dose of old-fashioned statism. As some critics have argued, this can also be viewed as a new hidden tax, designed to fund wider public services, rather than a way of transforming the economy.

An alternative and much more inclusive approach to achieving a more even spread of capital ownership would be to pay the annual share issue into a citizens’ wealth fund – one owned by all citizens on an equal basis, managed by a Board of Guardian independent of the state, and offering for the first time a full citizen’s stake in the economy.

This would still involve share dilution, but the whole of society would benefit on an equal basis, and the state would be a facilitator rather than a player. Such an approach would have a much greater impact on the spreading of national wealth, with the annual returns from the fund paid to all citizens and not just the lucky employees of big, profitable companies. This would be one way of building a collectively owned fund on the model of the Alaskan Permanent Wealth Fund. Funded by the proceeds of oil this has paid out an annual dividend to all citizens (averaging $1100 per person a year) helping to turn Alaska into one of the most equal of US states.



Don't miss out on cutting-edge thinking.


Join tens of thousands of informed readers and stay ahead with our insightful content. It's free.



As one recent study has shown this approach would, over time, build a fund that would become a significant part of the national economy. It would be also be a powerful pro-equality force. With benefits going to all, it would be much more difficult for business – parts of which are now aligned with the call for ‘an inclusive e economy’ – to attack.

For the first time ever, all citizens would hold a direct and equal stake in economic success, with the fund automatically capturing a growing part of the gains from economic activity and distributing it equally, through a regular citizens’ dividend. A fund would act as a counterforce to growing inter-generational inequities by ensuring that a growing share of national wealth is held in trust for all citizens across generations. Provided it is managed with transparency and at arms length from the state, a citizens’ wealth fund offers a new tool for social democracy, partial reform of corporate capitalism, and a new 21st century social contract between citizen, state and market.

This post originally appeared on the British Politics and Policy (LSE) blog.

Stewart Lansley
Stewart Lansley

Stewart Lansley is  author of the The Richer, the Poorer: How Britain Enriched the Few and Failed the Poor(Bristol University Press).He is a visiting fellow at the University of Bristol, a council member of the Progressive Economy Forum and a fellow of the Academy of Social Sciences.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u4219834c92bed 3 AI’s Impact on Europe’s Job Market: A Call for a Social CompactFederico Pozzi, Pietro Valetto and Elizabeth Kuiper
u421983d2 3 The EU’s Landmark Mercosur Deal Promises Much But Delivers LittleSimela Papatheophilou, Werner Raza and Bernhard Tröster
u4219834af 1 Will Denmark Lead Europe Towards a Super-Rich Tax?Isabelle Brachet
611e8de7e149c8763c9d58fc537549c18d20044a0abfeadd41919a1a731b6e64 Britain Rediscovers Europe as Macron and Merz Lead a Democratic ReawakeningPolly Toynbee

Most Popular Articles

u4219834676 bcba 6b2b3e733ce2 1 The End of an Era: What’s Next After Globalisation?Apostolos Thomadakis
u4219834675 4ff1 998a 404323c89144 1 Why Progressive Governments Keep Failing — And How to Finally Win Back VotersMariana Mazzucato
09d21a9 The Future of Social Democracy: How the German SPD can Win AgainHenning Meyer
u421983462 041df6feef0a 3 Universities Under Siege: A Global Reckoning for Higher EducationManuel Muñiz

ETUI advertisement

HESA Magazine Cover

With a comprehensive set of relevant indicators, presented in 85 graphs and tables, the 2025 Benchmarking Working Europe report examines how EU policies can reconcile economic, social and environmental goals to ensure long-term competitiveness. Considered a key reference, this publication is an invaluable resource for supporting European social dialogue.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
The evolution of working conditions in Europe

This episode of Eurofound Talks examines the evolving landscape of European working conditions, situated at the nexus of profound technological transformation.

Mary McCaughey speaks with Barbara Gerstenberger, Eurofound's Head of Unit for Working Life, who leverages insights from the 35-year history of the European Working Conditions Survey (EWCS).

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Summer issue of The Progressive Post is out!


It is time to take action and to forge a path towards a Socialist renewal.


European Socialists struggle to balance their responsibilities with the need to take bold positions and actions in the face of many major crises, while far-right political parties are increasingly gaining ground. Against this background, we offer European progressive forces food for thought on projecting themselves into the future.


Among this issue’s highlights, we discuss the transformative power of European Social Democracy, examine the far right’s efforts to redesign education systems to serve its own political agenda and highlight the growing threat of anti-gender movements to LGBTIQ+ rights – among other pressing topics.

READ THE MAGAZINE

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

S&D Group in the European Parliament advertisement

Cohesion Policy

S&D Position Paper on Cohesion Policy post-2027: a resilient future for European territorial equity

Cohesion Policy aims to promote harmonious development and reduce economic, social and territorial disparities between the regions of the Union, and the backwardness of the least favoured regions with a particular focus on rural areas, areas affected by industrial transition and regions suffering from severe and permanent natural or demographic handicaps, such as outermost regions, regions with very low population density, islands, cross-border and mountain regions.

READ THE FULL POSITION PAPER HERE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

BlueskyXWhatsApp