Pensions: Deepwater Horizon

Debate between Lord Lee of Trafford and Lord Freud

Wednesday 9th June 2010 Lords Chamber

[Lord Freud]

My Lords, the noble Lord, Lord Harrison, is right when he says that BP is a major dividend payer. I think that last year it paid approximately 14 per cent of all dividends in the FTSE 100. This raises the question that the noble Lord has just asked: to what extent are pension funds acting responsibly with regard to their ownership responsibilities to companies? There have been improvements in that over the past decade, but the question that we need to consider is whether they have improved enough.

[Lord Lee of Trafford]

Does the noble Lord agree that the question of BP paying a dividend is a decision for the directors of BP and not for the President of the United States?

[Lord Freud]

My Lords, whether to pay a dividend is a decision for BP, which is due to make that decision on 27 July at the appropriate board meeting. Anyone who reads the press will know that the company is coming under enormous pressure in the US not to pay a dividend. Indeed, the political pressure may be greater than the financial pressure, because BP is financially soundly based at this juncture.