GORDON Brown gave his budget preview this week and announced there will be new tax breaks to encourage employees to own a stake in the companies they work for. The Chancellor's ultimate aim is to put an end to the "us and them" culture so that workers are allowed the same share ownership benefits as their managers. Recent governments have been increasing the tax breaks over the years and there are now over four million employee shareholders in the UK.

Many small companies say schemes are too expensive to install and expensive to administrate, but Gordon Brown's plans are set to make share ownership far more attractive in order to overcome these difficulties.

If employees keep their shareholdings for more than three years, they will not incur income tax.

Also, new tax rules on tapering capital gains tax, announced at the last budget, will reduce the tax payable the longer the investment is kept.

The move was welcomed by the Employee Share Ownership Centre.

But you can go wrong with even 'reliable' shares. Marks and Spencer shares suffered their largest drop since 1987 after the company reported a 23 per cent drop in first-half profits and warned that sales had "fallen off a cliff" in September and October.

The company has also delayed some of its expansion plans -- putting off plans to open in China, Japan and Australia and has cut the size of some of its Far Eastern stores.

Deteriorate

If trade continues to deteriorate towards Christmas, there is likely to be a massive January sale and some prices have been dropped already.

Our local television station, Granada, is in favour with many brokers at the moment. The shares are trading at a 15pc discount to the market.

Even though it's in some cyclical areas such as hotels and road-side catering, the rest of its business -- programme-making and rental -- are far more resilient.

The management have a good track record of cutting costs and the company looks set to have a good 1999.

Other broker recommendations this week have included:

Marks and Spencer -- despite problems, the company will recover in the long-term, management changes will be made and the company will learn from its mistakes.

Powergen -- the government's insistence the company sells 4000 MW of generating capacity will turn out well because there are plenty of potential buyers and the company looks likely to do a deal in the US.

LLoyds TSB -- the sector has been in favour with Latin America causing particular concern. But only 3pc of the bank's loans are in Latin America and the share looks oversold. By Jon Hitchin of Hargreave Hale Stockbroker, Wood Street, Bolton .

Marsden W Hargreave Hale & Co (01204 435025) is regulated by the SFA.

ends Recent governments have been increasing the tax breaks over the years and there are now over four million employee shareholders in the UK.

Many small companies say schemes are too expensive to install and expensive to administrate, but Gordon Brown's plans are set to make share ownership far more attractive in order to overcome these difficulties.

If employees keep their shareholdings for more than three years, they will not incur income tax.

Also, new tax rules on tapering capital gains tax, announced at the last budget, will reduce the tax payable the longer the investment is kept.

The move was welcomed by the Employee Share Ownership Centre.

But you can go wrong with some shares. The shares suffered their largest drop since 1987 after the company reported a 23 per cent drop in first-half profits and warned that sales had "fallen off a cliff" in September and October.

The company has also delayed some of its expansion plans -- putting off plans to open in China, Japan and Australia and has cut the size of some of its Far Eastern stores.

If trade continues to deteriorate towards Christmas, there is likely to be a massive January sale and some prices have been dropped already.

Our local television station, Granada, is in favour with many brokers at the moment. The shares are trading at a 15pc discount to the market.

Even though it's in some cynical areas such as hotels and road-side catering, the rest of its business -- programme-making and rental -- are far more resilient.

The management have a good track record of cutting costs and the company looks set to have a good 1999.

Other broker recommendations this week have included:

Marks and Spencer -- despite problems, the company will recover in the long-term, management changes will be made and the company will learn from its mistakes.

Powergen -- the government's insistence the company sells 4000 MW of generating capacity will turn out well because there are plenty of potential buyers and the company looks likely to do a deal in the US.

LLoyds TSB -- the sector has been in favour with Latin America causing particular concern. Both only 3pc of the bank's loans are in Latin America and the share looks oversold.

Converted for the new archive on 14 July 2000. Some images and formatting may have been lost in the conversion.