What will a new government mean for share plans?
By the time this blog lands, it seems likely that the UK will have a new government. It’s natural to wonder if this will mean a big change for employee share plans and employee share ownership generally.
However, whether we’ve woken up on Friday 5th July to a new guard, or more of the same, RM2 is cautiously hopeful that share plans for employees will continue to benefit from the cross-party support that they’ve enjoyed for decades.
New Labour, New Share Schemes
New Labour might be ancient history now, but let’s not forget that Gordon Brown was responsible for the amazingly tax efficient all employee Share Incentive Plan (SIP), and the ever popular and flexible Enterprise Management Incentive Plan (EMI). Those plans have survived nearly 25 years of government under Labour, the Coalition government, and the Conservatives, and they’re still going strong. Changes and improvements to EMI have included an increase in the individual limit from £120,000 to £250,000; there have been some changes making the SIP rules more flexible (both under the Coalition government).
Company Share Option Plan (CSOP) – 40 years old and still going strong!
We can thank Mrs Thatcher for CSOP, as the earliest form of the plan was first implemented back in 1984. Labour reduced the individual limit in 1996 – but made up for this by introducing EMI a few years later. And we were delighted to see the Conservatives double the individual limit to £60,000 in 2023 – after a wait of only 27 years!
EOT – a decade on
More recently, it was the Coalition government that introduced the Employee Ownership Trust in 2014. This has provided a fantastic exit route for business owners wanting to emulate a John Lewis type ownership model.
What next?
So arguably it doesn’t matter what colour the government is. Employee ownership is widely accepted by all parties as a strong driver for increased productivity, with a bit of employee motivation, retention and improved well being thrown in for good measure. And we would hope that the government in place on 5 July will, at some point, have time to review the outstanding consultations on SIPs and EOTs that RM2 provided feedback on earlier this year.
Needless to say, RM2 will continue to work closely with organisations such as the eoa, Proshare and The ESOP Centre in lobbying for legislation that will support the employee ownership sector in all its guises.
