John McDonnell sets out plans for staff ‘ownership funds’

All private firms with more than 250 staff will have to set up “ownership funds” to give workers a financial stake and influence in their companies under plans set out by John McDonnell.

The shadow chancellor said he wants to deliver an “irreversible shift in wealth and power in favour of working people” as Labour prepares for a general election within months.

His comments come as Labour seeks to move on from a damaging row over anti-Semitism and claims that supporters of Jeremy Corbyn were seeking to depose MPs critical of the leader.

Mr McDonnell set out his plans in an Observer interview in which he said Labour must be ready for an election because the Tories are on the brink of collapse.

He said: “What this will ensure is that in large companies, in addition to rewarding workers with wages, they will reward them with shares that will go into a pool that will allow them to have an ownership role.”

The newspaper said that among models being examined are ones under which firms would have to put a percentage of profits into an employee fund that would build up over time, giving the workforce an increasing say in key decisions on how the companies are run and managed.

While workers would not be able to cash in shares, they could be offered dividends from the fund to boost their pay.

Mr McDonnell said he believes Theresa May’s administration would crumble within the next six months, giving Labour the chance to win power.

“When they come back in the autumn with whatever they think will be their Brexit deal, they will rip themselves apart, and my argument is that they should move on and let us get on with the negotiations, and if not, call a general election,” he said.

Labour has its own troubles over Brexit, with pressure mounting on the party leadership to back a referendum on the outcome of the process.

There is likely to be a vote on Brexit at Labour’s conference in Liverpool later this month, Mr McDonnell said.

“What I have been arguing for is a general election,” he said.

But he added that “if we can’t get a general election, I am saying keep all options open”.

A poll of members of the UK’s three biggest trade unions ahead of this week’s TUC meeting has added to the pressure on the Labour leadership to explicitly back a second referendum.

The YouGov study found Unison’s members back a so-called People’s Vote by 66% to 22%, and would opt to stay in the EU by 61% to 35%.

Unite’s members support a People’s Vote by 59% to 33% and back staying in by 61% to 35%. GMB members back a second referendum by 56% to 33% and would vote to remain by 55% to 37%.

Overall, the survey of more than 2,700 trade unionists for the People’s Vote campaign shows they want a public ballot on the outcome of Brexit negotiations by 61% to 28% – or 68% to 32% when “don’t knows” are excluded.

:: YouGov surveyed 1,081 Unison members, 1,058 Unite members and 620 GMB members between August 30 and September 5.