HC Deb 02 February 1978 vol 943 cc326-7W
Mr. Pardoe

asked the Chancellor of the Exchequer when the proposed consultative document on profit sharing will be issued; and if he will make a statement.

Mr. Joel Barnett

A consultative document on profit sharing will be issued by the Inland Revenue today. It follows the published exchange of letters between the Leader of the Liberal Party, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) and the Prime Minister on 27th July 1977 in which it was announced that the Government has agreed to consider ways of encouraging the creation of schemes for profit sharing in private industry with a view to legislation". I have arranged for copies to be placed in the Library.

The consultative document considers possible taxation changes which would encourage the development of such schemes. It gives details of three methods, representing a range of possibilities, by which employees could share in the profits of the companies in which they work by acquiring shares in them. All three methods set a limit to the value of the shares which could be acquired by any participant, and seek to ensure that the benefit of profit sharing schemes is spread as widely as possible and not limited to directors and senior employees.

Profit sharing is quite distinct from industrial democracy, on which the Government have been holding discussions with the TUC and CBI and intend to put forward further proposals as soon as these discussions are complete.

It is the Government's intention to include in this year's Finance Bill provisions to encourage profit sharing, and, in drawing up our proposals, we shall take full acount of any comments which are made on the consultative document.