New deal likely on shares perks

A meeting called tomorrow by the Chancellor, Kenneth Clarke, with the Greenbury committee could herald a compromise to defuse the furore over the taxing of executive share options.

Mr Clarke was last night refusing to back down over the principle of taxing executive share options. But there could be attempts to phase in the tax on shop-floor employees to avert the threat of a government defeat. In a more conciliatory approach, ministers said they had called Sir Richard Greenbury and his committee to the meeting to "listen to what he has to say".

A possible solution was put forward by Sir Michael Angus, a member of the committee. He said the Chancellor "should consider whether at the lower levels there are things that should be done, or transitional periods that should be allowed". He added: "The change does not take place until the Finance Act so there's plenty of time to listen and see if some adaptations in the transitional period might be appropriate."

Mr Clarke has invited Michael Jack, Financial Secretary to the Treasury, a former Marks & Spencers manager, to the meeting with Sir Richard, the chairman of the store group, to help to smooth the way.

The Chancellor invited Sir Richard after discovering that the Greenbury committee had been reconvened to discuss the row over its recommendation to tax share options, which Sir Richard disowned before a select committee last week.

Whitehall sources said the Chancellor thought it better to invite the committee to hear its views rather than to exchange further letters. It is clear Mr Clarke feared the exchanges were getting out of hand. The shadow Chancellor, Gordon Brown, said: "This new confusion and disarray looks like the first stages of yet another U-turn.

"After a week of bungling it appears the Treasury now want to receive new advice before drawing up the detail of their proposals. No one will ever trust the Chancellor with their tax affairs again."

The threat of a government defeat on the Finance Bill increased when John Prescott, the deputy leader of the Labour Party, confirmed Labour would take the opportunity of the Finance Bill in the autumn to force a vote against the measure.

David Shaw, the Tory MP leading the campaign to reverse the tax plan, said it could lead to a defeat like the Government "debacle" over VAT on fuel, unless Mr Clarke relented.

Archie Norman, chief executive of the Asda supermarket group, yesterday threatened a lobby of MPs by 36,000 staff who have share options if the Chancellor refused to backtrack.

Leeds-based Asda recently issued options to staff. Those taking them up now face a tax bill of at least 25 per cent on any gains following the Chancellor's imposition of income tax.

Mr Norman, who 10 days ago made an instant pounds 1.3m profit for himself from options, said: "The effect of the Chancellor's change is to knock schemes such as ours on the head. For senior executives ... it makes not one penny of difference, but for more junior executives and store workers it really makes the scheme not worth while."

Sir Desmond Pitcher, the chairman of privatised North West Water who has been attacked over the level of his pay, said the privatised utilities had been singled out by the Greenbury committee for political reasons.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

Recruitment Genius: Production Operative

£13000 - £17000 per annum: Recruitment Genius: Due to a period of sustained an...

Recruitment Genius: Digital Marketing Content Leader

£22000 - £25000 per annum: Recruitment Genius: This role requires a high level...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent