Hunt plans biggest shift in employee ownership schemes in 23 years

The call for evidence, first announced in Mr. Hunt's Spring Budget, is likely to be the widest consultation on these schemes since Since the introduction of SIP in 2000. Photo: News Scan

Chancellor Jeremy Hunt plans to make it easier for employees to own shares in the companies they work for in order to boost economic growth.

The government has asked companies to provide evidence to get their opinion on how to improve Save as You Earn (SAYE) and Equity Incentive Plan (SIP) as part of the biggest reform of employee ownership schemes in 23 years.< /p>

The call for evidence, first announced in Mr. Hunt's spring budget, is likely to be the widest consultation on these schemes since the introduction of SIP in 2000.

The SAYE scheme allows employees to buy shares of their companies at a discount if they set aside money every month for three to five years, and the SIP scheme allows employers to sell shares directly to employees or offer them as tax-free rewards.

New analysis of HM Revenue & Customs shows that 81 percent of employers who use the schemes believe they help grow businesses. However, nearly a third (31 percent) of companies that were unaware of the schemes said they were too complex to set up.

Victoria Atkins, finance secretary at the Treasury Department, said: A way to motivate the workforce, giving people an extra stake in what they do and they offer a boost to the business.”

Ms. Atkins added: «Growing the economy is a priority for this government, and one way to do that is to make these schemes as easy as possible to set up.»

Proshare, a lobbying group, called on the government to shorten the SIP holding period from five to three years so employees can get benefits faster.

David Mortimer of Proshare said: “Five years is a very long time, especially if you are in your 20s. move on [before the end of the five-year period].”

Previous government research found that employee-participation schemes could increase productivity by 3.5%.

The government is particularly interested in increasing the number of low-income participants.

The call for proof follows reforms to a separate scheme, the Company Share Option Plan, which has doubled the number of share options. employees can be granted and waived restrictions on the types of promotions that can be included.