Directors’ Pay

Ben Gummer Excerpts

Wednesday 20th June 2012 Commons Chamber

[Vince Cable]

We are not proposing changes in the Financial Services Bill. Whether there is elasticity in the policy will depend on the shareholders: they own the companies and make the judgments, and they will ensure that the powers we are giving them are enforced in their companies.

On credit for the shareholder spring, I think the prospect of legislation has probably helped, although I would not claim credit for it. By passing these measures, however, we will ensure the spring is not a one-off event but is sustained; that is the purpose of what we are doing.

[Ben Gummer (Ipswich) (Con)]

I very much welcome the Secretary of State’s measured proposals to give shareholders, who after all own the businesses in which they have shares, greater control over top pay. Further to the question from my hon. Friend the Member for Bexleyheath and Crayford (Mr Evennett), does the Secretary of State agree that the best way to increase shareholder activism is to increase the number of shareholders, especially non-institutional ones? What measures are the Government taking to increase the number of private, non-institutional shareholders?

[Vince Cable]

The hon. Gentleman is right to stress the point that shareholders own the companies. That is self-evident but often overlooked, and they have often been treated as outsiders. Clearly, widening shareholding would be desirable, and we are considering a variety of ways of doing that, not least through encouraging employees to have shares in their own company. The Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for North Norfolk (Norman Lamb), and I will consider how to effect that in one of the companies for which we still have direct responsibility—the Royal Mail.