The government today launched an effort to kick-start business particpation in employee share ownership schemes.
Renaming all-employee share ownership plans, or AESOPs, the share incentive plan, chancellor Gordon Brown together with other senior figures, announced a roadshow to persuade more SMEs to open schemes.
Currently around 2,500 use the tax breaks through AESOPs, but Brown is keen to promote the scheme in an effort to increase productivity in British industry.
At the launch in London he received the backing of Digby Jones, director-general of the Confederation of British Industry, and qualified support from John Monks, general secretary of the TUC.
Under the share incentive plan, introduced in the Finance Act 2000, companies can give employees up to £3,000 worth of free shares and employees can buy up to £1,500 worth of shares from their pre-tax and national insurance salary. Shares kept in a plan for five years are not subject to income tax or national insurance.
The move comes on the back of anger and disappointment among share holders in Railtrack who face losses after the government put the rail network operator into administration.
Digby Jones said: ‘Employee share ownership can be an invaluable tool for giving employees a direct stake in the business,’ but warned buying shares was not like ‘putting money in the building society’.
The roadshow debuts at Peterborough on 31 October and travels to 12 cities around the country.