Directors’ Pay

Debate between Baroness Wilcox and Lord McFall of Alcluith

Wednesday 20th June 2012 Lords Chamber

[Baroness Wilcox]

I thank my noble friend very much indeed. I am very glad that somebody thinks we have done the right thing today. I hope we will keep it up and that he will continue to be pleased with us.

[Lord McFall of Alcluith]

The Minister, as a former non-executive director, is very much aware that the business model is the key to understanding companies, both in good and bad times. More than anything, it is the professionals—the auditors—who understand the business model. Will the Minister ensure that the Government mandate auditors to talk to shareholders, so that they begin to understand the company? If they do, they can then request a seat on the remuneration committee, along with other stakeholders such as employees, so that we blow open the cartel that is at present called the remuneration committee.

[Baroness Wilcox]

I assume the noble Lord is talking about outside auditors, not the internal audit committee. I do not have an answer for him immediately but I will certainly go back and find out what we are thinking in respect of auditors. I think I have an Oral Question next week on auditors so that might be worth listening to. I apologise that I cannot answer that right now.

Corporate Governance

Debate between Baroness Wilcox and Lord McFall of Alcluith

Wednesday 7th December 2011 Lords Chamber

[Baroness Wilcox]

On boards and pay, I shall refer back to my notes because we have three reviews going on at the moment. There are no noes on anything. At the moment we are keen to listen to everybody’s views and to look at progress anywhere else in the world. The UK has a strong corporate governance framework and we are committed to strengthening it further, as we should do. As it happens, this country has a good reputation in the world for running boards, although of course we will have to wait to see what Professor Kay says in his review.

[Lord McFall of Alcluith]

My Lords, does the noble Baroness accept that there will be no long-term future for companies if there is not adequate shareholder engagement? To date, the level of that engagement has been shameful, allowing ownerless corporations to dictate and a managerial class to prevail. Does the Minister not agree that the Government should do something to ensure that we get both short-term and long-term engagement with shareholders, which is crucial for the long-term health of a company?

[Baroness Wilcox]

There is no doubt that shareholder engagement should—and, I hope, will—be improved. After all, it is shareholders who can, as is only right and proper, hold the company’s feet to the fire on the day they are asked to put up the salary of the chairman and the chief executive. They are not doing their job well, particularly the very big shareholders—the big pension funds and so on. I myself have sat on boards and have experienced these big shareholders not turning up at the shareholders’ meeting, instead having another meeting at another time. Usually, small shareholders turn up and make very good suggestions, but then in come the proxy votes—and there are millions of them. We are doing everything we can to see whether we can get shareholders to take the responsibility and the power that they have to put this right.

Economy: Growth

Debate between Baroness Wilcox and Lord McFall of Alcluith

Tuesday 11th October 2011 Lords Chamber

[Lord McFall of Alcluith]

To ask Her Majesty’s Government what plans they have to develop a growth strategy.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the simple answer is that this Government already have a strategy. The Plan for Growth, published alongside Budget 2011, set out the Government’s plan to put the UK on a path to sustainable, long-term economic growth. As my right honourable friend the Chancellor of the Exchequer reiterated last week, we have a credible plan to reduce the deficit and tackle our debts. We are creating the right conditions to enable growth which is driven by investment and exports and is more evenly balanced across the UK and the sectors.

[Lord McFall of Alcluith]

My Lords, having witnessed almost zero growth during the 17 months of this Government and with pleas from influential Conservative Back-Benchers and sympathetic industry bodies for a coherent economic plan, is it not time for a radical response from the Government to what the Governor of the Bank of England has described as possibly the worst ever financial crisis by the establishment of a national infrastructure and investment bank to generate jobs and employment in this country? I remind the House that we have a duty to the more than 1 million young people in this country—a record level of unemployment not seen since the 1980s—to help them to inherit a worthy future rather than an economic and social graveyard.

[Baroness Wilcox]

The noble Lord has outlined exactly what we are striving to achieve. Without doubt, we are looking across the whole of the education and skills system to consider how to maximise economic growth and we shall be reporting on that in the autumn. He asks what we have achieved. As I have already said, the Business Secretary, Vince Cable, has today announced a £170 million package to drive future growth in manufacturing; we have reduced the main rate of corporation tax from 28 to 26 per cent and it will go down to 23 per cent; a £2.5 billion business growth fund has been launched; and we have already announced 24 enterprise zones in the country, helping to create thousands of new jobs by 2015, which will attract hundreds of new start-up firms with simplified planning rules, superfast broadband and more than £150 million in tax breaks for new businesses over the next four years. I have a longer list, but I am sure that someone else will wish to ask a question. I hope that the noble Lord feels encouraged by my answer.

Businesses: Contracts and Payments

Debate between Baroness Wilcox and Lord McFall of Alcluith

Wednesday 3rd November 2010 Lords Chamber

[Baroness Wilcox]

My Lords, the question was whether the Government will create a blacklist of firms which consistently act in an inappropriate manner. I do not think the previous Government did that and I do not think we will. The Government are working with the UK’s main business organisations and UK business to promote and encourage good practice. If the noble Lord knows of a practice that has been brought to his attention which is not being sorted, I hope that he will contact me to see whether my department can help in any way.

[Lord McFall of Alcluith]

My Lords, the situation is not working just now. Last year, NatWest research showed that three out of four small and medium-sized enterprises are suffering with a £63 billion mountain of unpaid bills. It is very important that we recognise that large firms, as Serco indicated, are working on the back of small firms to improve their cash flows. I think it is time for a level playing field between the public and private sectors. Can the Minister look at the prompt payment code that was introduced in 2008 and build on it so that we have well defined time periods for the private and the public sectors in order to get rid of the bullying that we saw the other day with Serco?

[Baroness Wilcox]

My Lords, the noble Lord raises two points. He is talking about the private sector and the public sector, which are not necessarily exactly the same. He will know about the work we have been doing in the public sector on speedy payments. The public sector is paying faster than ever before. Central government departments aim to pay 80 per cent of invoices within 10 days. There is now a contractual requirement for main contractors to pay their own suppliers within 30 days. With regard to the private sector, the law stands. We also have very big organisations, such as the CBI and the Institute of Directors, with which we work all the time, as did the previous Administration, to see whether encouragement can be given—not to intervene in that sector, as that would not be correct. I have been a small supplier to a large company. I would say that there needs to be more training and education and more pressure on small companies to ensure that, when they get wonderful contracts with big companies, they do not get overexcited and that they reward the salesman but do not reward the invoice clerk in the back office who gets the invoices wrong 30 per cent of the time.