Labour’s Inclusive Ownership Fund (IOF) proposal has generated significant debate in recent months. Common Wealth has analysed the potential impact of a feasible version of the policy and the distribution of its benefits, a proposal we have advocated for in the past, along with NEF and The Democracy Collaborative. The critical point is that previous analyses were based on the assumption that a company’s IOF would have a right to dividends from a company’s global, rather than it’s UK-specific, economic activity.

By focusing instead on UK economic activity, our analysis substantially addresses two of the main existing criticisms of the Fund proposal: that it hits some companies disproportionately for global economic activity with knock-on effects for UK pension wealth, and that the vast majority of the revenue goes to the state, rather than workers, due to the low individual cap. As set out in the table below, these criticisms are significantly weakened under a UK-based IOF, all while retaining the core thrust of democratising wealth and power within the company.