Finance Bill — Further provisions about share options — 19 Jul 2000

Not amended in the Committee and as amended in the Standing Committee, further considered.

I beg to move amendment No. 57, in page 240, line 12, leave out from "must" to end of line 13 and insert--

'form part of the ordinary share capital of--'.

Share ownership offers employees a real stake in their company with shareholders, managers and employees working towards common goals.

The Government's recognition that our workers deserve to be included is a real boost to those leading exciting reforms in the co-op movement.

Amendment agreed to.

Amendment made: No. 58, in page 34, line 42, leave out "6th April 2002" and insert "1st January 2003".-- [Mr. Timms.]

Amendments made : No. 59, in page 35, line 12, leave out "6th April 2002" and insert "1st January 2003".

No. 60, in page 35, line 20, leave out "6th April 2002" and insert "1st January 2003".-- [Mr. Timms.]

I beg to move amendment No. 131, in page 40, line 19, after "be", insert "multiplied by 2.5 and".

I make no apology for the fact that the amendment would largely negate the impact of imposing national insurance contributions on share option schemes.

We will provide stable economic growth with low inflation--

and promote dynamic and competitive business and industry at home and abroad.

The Government has introduced a series of well-camouflaged taxes which has put the tax burden firmly onto business. Changes by the Chancellor since 1997 will push up business taxation by almost £5 billion a year for the first five years of the Labour Government.

At Key Stage 1, children will be taught that money comes from different sources and can be used for different purposes.

At Key Stage 2, they will be taught to look after their money and realise that future wants and needs may be met through saving.

At Key Stage 3, they will be taught what influences how we spend or save money, and how to become competent at managing personal money.--[ Official Report , 24 January 2000; Vol. 343, c. 25W.]

The vast majority of technology start-ups are done in the US rather than Europe for many reasons including customer proximity, supplier and labour base, the tax regime and culture.

New Economy businesses are built on good people not assets. Building a new business from the UK or persuading a multinational to locate a major business unit in the UK means that top talent will have to be happy to locate in the UK.

For the UK to be an attractive base for a global technology business (such as Micromuse or the next Cisco) it has to offer something substantial to redress the balance over the United States. The go forward effective personal tax rate of 47 per cent. in the UK compares unfavourably with 26 per cent. in the US for ISO stock options and 46 per cent. for other stock options.

There is an alternative regime for approved options in the US, as there is in the UK

the terms of the approved scheme are more generous in the US than in the UK--[ Official Report, Standing Committee H , 29 June 2000; c. 1033.]?

Rules on share option schemes need to be improved to give incentives to people to join young entrepreneurial businesses and go on to build large, world-class enterprises.

Question put, That the amendment be made:--

The House divided: Ayes 164, Noes 315.

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