Clifford Chance

Labour's inclusive ownership funds: nationalising 10% of everything?

3 September 2019

With a general election in the UK looking increasingly likely, we've taken a detailed look at one of the UK Labour Party’s most striking policies: to require that 10% of the shares in all large UK companies be transferred to an "inclusive ownership fund" for the benefit of employees.

Our quantitative analysis shows the cost to investors would be over £300bn, including a cost to UK pension funds of £30bn – but that the benefit to employees would be limited to around £1bn per year (with most of the dividends on the expropriated shares going to Government). Our legal analysis has identified a number of serious impediments to the proposal.

These difficulties, and the mismatch between the cost and the benefit, lead us to suggest an alternative path that Labour could follow, to achieve the same objectives without the economic cost and legal risk of its current proposal.

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