Directors’ Pay
Debate between Lord Haskel and Baroness Wilcox(12 years, 6 months ago)
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Baroness Wilcox
The answer to my noble friend’s last assumption is yes. When it comes to employees getting their voices heard, we encourage them to make more use of the tools that they already have, and to which I have already referred, in airing their views on pay, for example. Existing information and consultation arrangements are a potentially powerful mechanism for employees and have been underutilised to date. We will now watch carefully what companies say in directors’ remuneration reports about whether employees’ views have been sought. I agree with my noble friend that we need to hear the views of employees. We want boards to encourage them to use the mechanisms available to them so that we can hear more of what they say.
Lord Haskel
Does the Minister agree that this is another small and welcome step towards implementing a long-term stewardship code? It is a journey which the previous Government started and which I hope this Government will continue. The Minister spoke about institutional investors, pension funds, insurance companies, active shareholders, savers and investors, all of whom will of course take an interest. However, we are told that these are a minority of shareholders. We are told that short-term traders, overseas investors with different objectives, private equity, hedge funds and those who borrow shares are now in the majority. Will they simply not bother to vote and so render this scheme useless?
Baroness Wilcox
Gosh, that is dreary. Private equity is something else again. We have promoted long-term stewardship and continue to do so today. I would not like to give the impression that the previous Government did nothing at all; they did what they could to try to change things. However, in the past few years, it has become increasingly obvious that the stretch of pay across a company has become too much to bear. From the Statement that I have repeated today, I hope that your Lordships will see that we are keen to monitor how our proposals are being implemented. We leave ourselves the opportunity to keep a watching brief, as is right, but not to interfere in companies’ day-to-day workings or set remuneration. Shareholders are becoming more engaged, as results from recent annual general meetings show. Reforms will encourage shareholders to engage by giving them stronger tools that require companies to sit up and take notice. This will help shareholders sustain the increasing activism that we have already witnessed this year and to which the noble Lord referred.
Business: Ethical Values
Debate between Lord Haskel and Baroness Wilcox
Lord Haskel
To ask Her Majesty’s Government whether their plan for growth includes steps to encourage shared ethical values and long-term stewardship in United Kingdom businesses.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, the Chancellor's Autumn Statement reinforced the Government's commitment to deficit reduction and fairness, to rebalancing the economy away from one built on debt towards long-term sustainable growth for the safety and happiness of our people.
Lord Haskel
My Lords, last month the financial services sector was in trouble for mis-selling insurance to pensioners. Yesterday, your Lordships debated the excessive charges for payday loans. These are but the latest in a long list of ethical and moral failings of an industry that the Prime Minister says must be protected at the expense of Britain’s wider industrial interests. In view of this, will the Minister now insist that the governance and management of these financial businesses be linked to the values of the rest of us—for instance, by adopting the City Values Forum?
Baroness Wilcox
I have had exchanges with the noble Lord on a couple of the issues that he has referred to today, so I know how fresh this is in his mind. The Prime Minister has spoken about a new understanding between business and government, with Governments committing to pro-enterprise and business-friendly practices. But more than anything, he believes that Britain’s most successful businesses are those that invest in their people, communities and environment.
Every Business Commits is a new initiative taking place under our Government, to see whether we can get businesses to make a significant impact by improving skills and jobs, supporting communities and small and medium-sized enterprises and improving the quality of life and well-being for our people.
Economy: Growth
Debate between Lord Haskel and Baroness Wilcox
Baroness Wilcox
Reduction equals low interest rates, my colleague beside me murmurs. Without doubt, we are trying to get Britain back on track. It will take time, but we are determined to do it deeply and well. The Plan for Growth is based around four ambitions: creating the most competitive tax system in the G20; making the UK the best place in Europe to start, finance and grow a business; encourage investment and exports as a route to a more balanced economy; and creating a more educated workforce that is the most flexible in Europe. We are the first to start that; we were one of the first to go into this recession; and, with this Government in charge of this country, we will be one of the first out.
Economy: Personal Debt
Debate between Lord Haskel and Baroness Wilcox
Lord Haskel
To ask Her Majesty’s Government what action they intend to take regarding levels of personal debt.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)
My Lords, it is unsustainable debt coupled with irresponsible lending that most concerns this Government. We will take action where necessary, which is why we launched our review of consumer credit and personal insolvency. We will make an announcement on the next steps before the Summer Recess.
Lord Haskel
Did the Minister see today’s report that household income is set to fall yet again? With personal debt at an all-time high, inflation at more than 4 per cent and no growth in the economy, does the Minister share my concern that the steps that the Government are taking to reduce public debt will simply transfer the public debt to the personal debt as people are forced to borrow more money just to keep afloat?
Baroness Wilcox
My Lords, we can thank the Labour Government for allowing public borrowing to spiral out of control. This Government are facing some very difficult decisions in order to bring us back into line. No one likes the idea of putting our people in debt any more than they absolutely have to be. The noble Lord can be assured that we are looking at every possible way to stop interest rates spiralling out of control, otherwise we will find ourselves exactly where the Labour Government found themselves: out of control.