Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 10th April 2014 Commons Chamber

[Vince Cable]

I think I largely answered that question a few moments ago, but the point I would emphasise is that despite the disadvantage of costs, albeit with the compensation we are now proposing, we have had very substantial investment in our energy-intensive industries. The steel industry, in particular, has been an exemplary example of long-term investment by Tata.

[Mr Chuka Umunna (Streatham) (Lab)]

In export week, will the Secretary of State tell us what he is doing to garner support among Cabinet colleagues for our seventh-largest export industry, a sector that generates more than £10 billion of income for our country?

[Vince Cable]

My colleague the Minister of State, Department for Business, Innovation and Skills, the right hon. Member for Sevenoaks (Michael Fallon) has given a comprehensive answer on how we are promoting exports across the board. The industrial strategy is, of course, maximising our export potential.

[Mr Umunna]

I am talking about higher education. The fact is that the right hon. Gentleman’s Government’s net migration target has done immense damage to higher education, contributing to a 51% fall in postgraduates coming from India and a 49% fall in those coming from Pakistan. Jim O’Neil, on the Department for Education’s board, agrees, saying that the Government are sending out a message that they are “not serious” about exporting education. The Parliamentary Secretary, Cabinet Office, the hon. Member for Orpington (Joseph Johnson) at No. 10 has argued, as we do, that legitimate students should be taken out of Government net migration targets, but is it not the truth that for all the talk from that Minister and the Business Secretary, both have let the sector down by failing to get their intransigent Home Secretary to see sense?

[Vince Cable]

The simple truth of the matter is that, as a result of discussions across the Cabinet and with the Minister for Universities and Science and myself, there is no cap on the number of overseas students. [Hon. Members: “There is.”] There is not. We want to maximise the number. We actively encourage them, and only this week there was a £1 billion contract signed with Saudi Arabia for higher education training in which we are a participant.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 6th March 2014 Commons Chamber

[The Minister for Skills and Enterprise (Matthew Hancock)]

I agree wholeheartedly with my hon. Friend. The Lancaster Guardian, like many local newspapers across the country, plays an important role in changing the culture, supporting apprenticeships and ensuring that young people know the opportunities that are available to them.

[Mr Chuka Umunna (Streatham) (Lab)]

In the last annual report and accounts of his Department, the Secretary of State said that the Department remained

“on track to deliver against our spending review settlement.”

However, the head of the National Audit Office said in the same report that there are significant uncertainties relating to billions of pounds’ worth of the Department’s assets, which will affect its financial position. Can the Secretary of State explain the discrepancy?

[Vince Cable]

I think the hon. Gentleman is referring to the significant assets that were left with the dissolution of the regional development agencies. In fact, the job of managing that complex process has been extraordinarily successful.

[Mr Umunna]

No, I refer to the student loans worth billions of pounds. Subsequent to the publication of those accounts, the NAO published a report that revealed that because Ministers have dramatically overestimated the number of graduates who will be able to repay the loans to pay for the Secretary of State’s higher tuition fees, he has, in effect, blown a hole in the Department’s budget. In fact, the Library estimates that from 2015-16 an extra £600 million a year will have to be found. Will the Secretary of State now explain how he will fix the problem without putting under threat the country’s scientists, students, universities and colleges?

[Vince Cable]

This is an absurd misunderstanding of what is called the resource accounting and budgeting—RAB—charge system, which depends on long-term predictions of earnings growth. I assure the hon. Gentleman that if the recovery of the economy continues as it is, the RAB charge estimates will be substantially revised down and the imaginary black hole will very soon disappear.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 23rd January 2014 Commons Chamber

[Vince Cable]

I would be delighted to come to my hon. Friend’s constituency and share that success. It is not just about mainstream car producers, but specialists, as she describes.

[Mr Chuka Umunna (Streatham) (Lab)]

The Secretary of State talked about the importance of strengthening the national minimum wage, which Labour established in office to secure a fairer deal for workers. With that in mind, does he agree that for an employer to mislead workers into purchasing personal accident insurance, the charges for which would take workers’ pay under the minimum and the purchase of which is not necessary given employers’ own insurance cover, would be completely indefensible and possibly unlawful?

[Vince Cable]

Yes, I agree that that would be indefensible and I think it is unlawful. I have been advised that this practice has happened. The relevant body, the employment agency standards inspectorate, is investigating individual cases and will take enforcement action. If it proves to be a widespread practice, there will clearly be a case for a broadly based inquiry.

[Mr Umunna]

I asked the question because it is precisely what employment agencies employing workers on, or close to, the minimum wage appear to have been doing. I have been passed evidence that suggests Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian, employment agencies employing more than 100,000 workers, have been mis-selling personal accident insurance to workers which they arguably do not need and from which those agencies have been profiteering. There is even a company, Gee 7 Group, which specialises in putting together these dubious arrangements for agencies. Further to my questions on this topic since October last year, will the Secretary of State now commit to holding a full inquiry into this shabby practice?

[Vince Cable]

I will commit to ensuring that we have proper enforcement procedure. The hon. Gentleman has listed more companies today. We will investigate them and that may well merit a more broadly based inquiry. I will say that the information he has made available, which I think has already been publicised, depends on the information that has been obtained from a whistleblower in a company. The Government’s reforms will strengthen the rights of whistleblowers and put them and others in a stronger position. The hon. Gentleman has identified a legitimate case of abuse and I recognise that we have to deal with it.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 5th December 2013 Commons Chamber

[Vince Cable]

I know that the Prime Minister visited the hon. Gentleman’s constituency recently and was very impressed by the Portakabin initiative. We have a concrete proposal for the establishment of a single market centre to help companies to negotiate overlapping regulations, particularly those relating to export controls. Translating regulations into a common language would make the process easier.

[Mr Chuka Umunna (Streatham) (Lab)]

We had black Friday last week and cyber Monday at the beginning of this week, but, as many Members have already pointed out, the only day that really matters is small business Saturday. I am sure that you will be visiting small independent local shops in Buckingham this weekend, Mr Speaker. Will the Business Secretary join me in thanking the huge coalition—including organisations representing more than 1 million businesses, AmEx, the Ingenious Britain campaign, and, above all, the national campaign co-ordinator for small business Saturday, Michelle Ovens—that has made this day possible?

[Vince Cable]

I am happy to do that, and to acknowledge the collegiate, cross-party approach adopted by the hon. Gentleman. Small business Saturday is a very good initiative, and we should support and sustain it as much as we can.

[Mr Umunna]

The owners of the businesses to which I referred will have heard about the Tomlinson report, which accuses RBS of artificially distressing successful businesses in order to seize assets and make a profit. That is a very serious allegation about a bank that we, of course, own. Tomlinson says:

“Banks must ensure…that robust processes are in place to…avoid conflicts of interest.”

It has transpired, however, that he is an RBS customer, and that he has a complaint about the bank pending. Was the Secretary of State aware of that before he allowed the report to be published, and does it not call the report’s independence into question? It is not independent, is it?

[Vince Cable]

I was well aware that Mr Tomlinson was an RBS customer. He has been very public in his comments about the bank for a long time. He was appointed as entrepreneur in residence at my Department —we seem to have a team of entrepreneurs—and has contributed valuable insights. I have referred his report to the regulator and the bank. Crucially, his accusations are echoed in the report published by Sir Andrew Large, who was appointed by RBS.

There are serious problems in the banking system, and in RBS in particular. Those problems need to be investigated, and I think that Mr Tomlinson has performed a useful service in making them public.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 24th October 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson)]

I thank my hon. Friend for that question. He rightly highlights the fact that there have been significant problems in the payday lending industry; thankfully, significant action is also being taken to match that. Twenty-five payday lenders have left the market since March as a result of strong action by the Office of Fair Trading, with the Competition Commission undertaking an investigation, and earlier this month the Financial Conduct Authority published a suite of new proposed rules, which will limit roll-overs, cap the number of times that a lender can use a continuous payment authority and introduce strict new rules on advertising to ensure that people do not get ripped off.

[Mr Chuka Umunna (Streatham) (Lab)]

The Secretary of State has said that growth must be better balanced and less reliant on rising house prices, but this week he has warned of dangerous and unsustainable house prices in London and extreme problems of affordability across the country on his Government’s watch. Does he therefore not agree that it would make sense to review how the second part of his Government’s Help to Buy scheme operates now, as opposed to in a year’s time, given the attendant risks posed to more balanced growth?

[Vince Cable]

I am delighted to see that the hon. Gentleman has progressed beyond his recent role as a share tipster and is now returning to more important and central concerns. The central point is that the growth we are experiencing is balanced. We are now beginning to see serious growth in manufacturing and the construction sector, and the next big step will be to see improvements in investment. As far as the housing market is concerned, the Chancellor has acknowledged that the Bank of England needs to watch the process very carefully.

[Mr Umunna]

But the right hon. Gentleman promised an export and investment-led recovery, yet as growth returned over the summer, exports fell, and the Office for National Statistics says that growth has been concentrated in household expenditure, rather than investment, which is £2 billion lower than it was a year ago. We all know that he is a keen dancer. In failing to prevail over the Treasury, is not the risk that, rather than marching to the tune of the makers, he is dancing to the Chancellor’s new song of house inflation?

[Vince Cable]

I am sure the hon. Gentleman would agree that there is no harm in the trend we are observing, which is that consumers are now more confident and are therefore spending and generating demand—I think we have both agreed over the last three years that the generation of demand is a key part of recovery. As far as exports are concerned, there is rapid growth in British exports to the big emerging markets, such as Russia, China, India and Brazil—indeed, I am going to Russia next week to pursue this course.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 18th July 2013 Commons Chamber

[Vince Cable]

My hon. Friend is right that this is a major scandal and it is being pursued through negotiation with the banks. As he rightly says, there are major anxieties about the terms of the settlement and some of the products currently excluded from it. I will see the head of the FCA next week to pursue the matter in some detail on behalf of my hon. Friend and his colleagues, and I acknowledge the enormous work he has done in the background to bring these problems to proper attention.

[Mr Chuka Umunna (Streatham) (Lab)]

Businesses, particularly on the high street, have found the trading environment very tough while the economy has flatlined for three years under this Government. Does the Business Secretary agree that increasing parking enforcement charges at this time would be nonsensical and drive customers away from businesses in our town centres at the very time they need that custom?

[Vince Cable]

Of course there has been a major problem in many of our high streets as a result of the recession, and particularly as a result of the development of internet commerce, which has changed the pattern of shopping. As the hon. Gentleman knows, parking charges are primarily an issue for local authorities, but the Department has developed a strategy with the retail sector to help it develop areas of growth, including export business.

[Mr Umunna]

The Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), said this week that the Government are consulting on proposals to increase the maximum parking enforcement charges that local authorities may levy outside London—a competence for which they are responsible. Apparently, the Secretary of State for Communities and Local Government thinks that would be a bad idea, but he is in no position to lecture given that Conservative councils impose higher parking charges than others. We are clear that massively hiking parking enforcement charges at this time for businesses and their customers amounts to a stealth tax on our high streets. Why does the Business Secretary not stand up for our businesses and kill off that proposal?

[Vince Cable]

I already have responsibility for one of the biggest Departments in Government, and taking over responsibility for parking charges from my colleagues and local councils would be an exercise in departmental imperialism that I will not embark on. I note the hon. Gentleman’s question and I am happy to talk to my colleagues in government about it, but he is missing the bigger picture of how we help the retail sector adapt to the massive technological changes that are taking place, and the perverse fiscal incentives that currently operate.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 21st March 2013 Commons Chamber

[The Parliamentary Under-Secretary of State for Skills (Matthew Hancock)]

I have just announced to the House that national apprenticeship week next year will from 3 to 7 March. I commend Fläkt Woods for the work it does and the apprenticeships it teaches. The number of apprenticeships in Colchester over the last couple of years has more than doubled, so clearly my hon. Friend’s efforts are making progress.

[Mr Chuka Umunna (Streatham) (Lab)]

Last year this Government presided over a double-dip recession. The Office for Budget Responsibility has just halved its forecast for what growth will be on the Government’s watch this year, so the situation is urgent. Yesterday the Government announced a number of measures that the Secretary of State says will help—the employment allowance for employers in respect of national insurance, an increase in capital spending by £3 billion a year and the establishment of Lord Heseltine’s single local growth fund. Which of these measures will help struggling businesses in 2013?

[Vince Cable]

There is a long answer, but I will give a short one. Let us start with the employment allowance, which will provide substantial support for micro-companies, building on considerable success with job creation— 1.25 million new jobs over the two and a half years of this Government and 600,000 forecast by the OBR.

[Mr Umunna]

The answer is that none of those measures will help businesses in 2013, because they do not kick in for at least a year, when what the economy needs is a stimulus now. What confidence can we have that the Government will actually deliver? Let us take Budgets 2011 and 2012. The Secretary of State and others boasted about their infrastructure plan, but two years on, less than 2% of the projects are completed or operational and now he says that Budget 2013 will get business investing. If that is the case, why, having accounted for this Budget, has the OBR revised down its forecasts for business investment this year, next year and in the following three years? It is not exactly a vote of confidence, is it?

[Vince Cable]

The OBR was quite clear about the reason for its downward revision of growth: it was explained in terms of net trade. That was the overwhelming factor, but if the hon. Gentleman wants evidence of projects that are now going through, he should look at some of the increases in capital investment approved in the autumn statement—and happening in my Department with my colleague the Minister for Universities and Science—big R and D projects going ahead in partnership with the private sector and many others now going ahead under the regional growth fund, creating jobs across the country.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 7th February 2013 Commons Chamber

[The Minister of State, Department for Business, Innovation and Skills (Michael Fallon)]

The Export Control Organisation is currently meeting its primary target of approving 70% of licence applications within 20 working days. Last year, it met its secondary target of approving 95% within 60 working days. However, I well understand the frustration of legitimate exporters. The ECO is working with the Foreign Office to improve performance still further.

[Mr Chuka Umunna (Streatham) (Lab)]

The EU Council is gathering as we speak. From the common agricultural policy to the absurdity of the European Parliament sitting in two places, it is clear that the EU needs reform. It is also clear—to the extent that any reform involves a significant transfer of power from Parliament to the EU—that we all agree there should be a referendum. Does the Secretary of State agree that, although reform is crucial, the immediate priority for British business is to grow our economy, and that continued membership of the EU is fundamental to that goal?

[Vince Cable]

I agree. The way the hon. Gentleman phrased the question suggests that, despite some of the drama, there is a lot of common ground. As I understand it, all three party leaders want us to remain within the EU. We all support the need for radical reform and for a referendum on the conditions set out in recent parliamentary legislation.

[Mr Umunna]

To pick up on a question asked by my hon. Friend the Member for Cardiff South and Penarth (Stephen Doughty) earlier, I have spoken to many businesses—large and small—that believe that the Prime Minister’s approach to the EU risks Britain stumbling out of the EU. Companies in numerous sectors—from Virgin to Siemens, and from BMW to BT—that account for 170,000 direct jobs, never mind indirect jobs, have reiterated the importance of our continued membership of the EU to their businesses. In the Secretary of State’s leaked letter to the Prime Minister, he said the Government must build more certainty and confidence for business to invest. Does the Secretary of State believe the Prime Minister’s EU policy has helped or hindered that process?

[Vince Cable]

The Prime Minister’s pressure for EU reform is necessary. I work with like-minded Ministers in other European countries to help to deliver that reform. We are all agreed that we need a minimum of uncertainty to attract inward investment. It is incumbent on all who want jobs in Britain to sound that positive message.

Gender Balance on Corporate Boards

Chuka Umunna Excerpts

Monday 7th January 2013 Commons Chamber

[Mr Chuka Umunna (Streatham) (Lab)]

Before I discuss the substance of the motion, it is important to make three brief observations for the record.

First, today we debate the need for greater gender balance among those in positions of leadership in business, but in so doing this House and the Government should acknowledge their own failings in this area. Just 22% of the current Members of this House and just four—18%— of the Cabinet are women. That is a disgraceful state of affairs in 2013. Labour Members are proud that 33% of the parliamentary Labour party and almost 40% of the shadow Cabinet are women, but we all need to do better. By all means we should debate the matter, but we in this House are certainly in no position to lecture.

Secondly, the subject of the motion is gender balance, but, as my right hon. Friend the Member for Leicester East (Keith Vaz) said, it is important to note that there is woeful under-representation on company boards in other respects that must be addressed too. For example, according to the latest research from Cranfield university, just 5.7% of FTSE 100 directors are drawn from an ethnic minority while the new census figures indicate that 14% of the population is now from a non-white background. How can we inspire young black and Asian Britons to reach for the top when they see so few people who look like them in our boardrooms, never mind here in Parliament?

Thirdly, diversity in executive directorships also matters, as does the diversity of the boards of directors of non-listed private companies. I think that Sir Richard Branson has made that point, too.

We cannot stand idly by on other issues of representation in the leadership positions that people hold in modern Britain. Today, however, we are bound to focus on the issue of gender balance among non-executive directors of listed companies, because that is the subject of the draft directive and the motion.

Two central questions flow from the motion. The first is whether we should take action, and if so what sort, in relation to the gender balance on the boards of listed companies. The second is whether that action should be taken at the level of the European Union. As the noble Labour Lord and former Business Minister in the Labour Government, Lord Davies, made clear in his excellent February 2011 report “Women on boards”, despite some progress under the previous Government, the representation of women on boards in this country is woefully low, as the Minister has set out today.

In 2003 we set up the Higgs review of corporate governance, which called for greater diversity on our corporate boards. In percentage terms, female-held directorships in the FTSE 100 doubled under the previous Labour Government, but I am clear that we must concede, with regret, that despite that, progress was lacking, with—I think the Minister cited the figure—women holding just 12.5% of FTSE 100 directorships when we left office in 2010. As Lord Davies pointed out, if that rate of change continued, it would have taken about 70 years to achieve some level of parity.

As Lord Davies made clear, there is as much a moral imperative to change this state of affairs as there is a strong business case to do so. The Minister has echoed those sentiments. I do not believe that this is a matter of party political discord.

[Keith Vaz]

I welcome my hon. Friend’s mea culpa in respect of the previous Labour Government. Does he know why we failed to make more of an impact? Was it because of a lack of a message from the then Government to the constituent parts that could have acted upon it, or was it the case, as the Minister has said, that the culture in the business community took so long to change? Is my hon. Friend able to offer an explanation of why we did not do better?

[Mr Umunna]

I think that some of the things that my right hon. Friend has just mentioned may have contributed to the state of affairs when we left office. As the Davies report makes clear, this is an historically complex issue. The easy conclusion to draw would be that our business community has a high level of overt and outrageous discrimination. I know through my own practice as an employment lawyer that, unfortunately, that still exists in some small pockets of the business community. However, I think that there are cultural factors at play and that the issues that women in the workplace face with regard to child care and flexible working all contribute to the lack of progression in the pipeline of appointments in different companies. To tackle that, individuals need to take a lead and have the will to bring about cultural change in individual organisations.

To be frank, one thing for which I do not apologise is our reluctance to move straight towards prescriptive legislative solutions to these problems. I believe that we should regulate or legislate as the last resort, but what has become clear is that, as Lord Davies concluded, there needs to be far more will in the business community, never mind the political community. Another important point that Lord Davies made is that we should be clear about not ruling out taking further action in this House if we do not see enough progress culturally in the business community.

As the report made clear, many of the more than 2,500 responses to the Davies review said that women with the relevant experience were frequently overlooked for development opportunities and that there were differences in how men and women were mentored and sponsored, giving men an edge over their female peers in gaining appointment to boards. We cannot tolerate that in a society that seeks equal opportunities for all, regardless of background. To do an effective job, boards must be made up of competent, high-calibre individuals who offer a mix of skills, experience and backgrounds. I fail to see how our boards can optimise their performance unless they are representative of the population as a whole. After all, in many cases, their customers are the population as a whole. There is a wealth of evidence to back that up, and it is all in the Davies report.

If we accept that the status quo is wrong and believe that it compromises the performance of our companies and our economy, as Opposition Members do, action has to be taken. That is why we endorsed all the recommendations of the Davies report. Those who argue against action often accuse those who argue for it of engaging in tokenism and of promoting diversity over merit. Of course board appointments must always be based on merit, with the best qualified person getting the job, but to suggest that no action should be taken is to presume either that there are not enough women who merit appointment or that there are not enough women who want to be appointed. That flies in the face of the evidence in 2013. There are plenty of women who merit appointment. Diversity and appointment on merit are not mutually exclusive. The problem is that there are barriers and obstacles that must be broken down to ensure that the appointment of women is as usual as the appointment of men.

The Davies report advanced a set of 10 voluntary measures, as the Minister has said, with a view to there being a minimum of 25% female representation on boards by 2015. The Minister went through the most recent update so I will not go through all the details, but there has been not insubstantial progress towards achieving the 25% goal. However, more action is clearly needed if we are to achieve the goals set out in the Davies report. Even if the goal is met, I believe that 25% is a modest aspiration. We should all want companies to make more progress than that. The Government should keep the matter under review and should reserve the right to introduce more prescriptive measures to force faster and greater change if necessary.

[Mr Djanogly]

The hon. Gentleman mentions the 25% figure, but that is an absolute figure. He should also point out that 27% of all board appointments in FTSE 100 companies are now being taken up by women.

[Mr Umunna]

I do not disagree. As I said, I do not think that the progress in this country towards achieving the goals since the report came out in February 2011 has been insubstantial. Whether we are on course to reach the aspirations set out in the Davies report will be clearer next year, when the recommendations have had three years to bed in. At that point, we will form a view on whether further measures are needed. Let me be clear: if we are to continue with a business-led approach, we expect to see much greater progress towards parity.

That is the case for action, but what of the EU? The draft directive produced by the Commission seeks to introduce a new procedural requirement for the recruitment of non-executive directors that would apply to all boards of public listed companies in the EU. The objective is to raise the proportion of non-executive positions held by the under-represented sex to 40% by January 2020 by introducing a new preference rule in the selection of non- executive directors. Under that rule, priority would be given to a candidate of the under-represented sex who was equally qualified in terms of suitability, competence and professional performance as a candidate of the other sex—a man in this case—unless an objective assessment, taking account of all the criteria, would tilt the balance in favour of the candidate of the other sex. That system would not amount to the introduction of a quota per se, as has wrongly been reported in some places, but it would introduce a degree of positive discrimination in favour of female candidates, in the scenario that I have outlined, for non-executive director positions on boards. The Commission decided not to take action in respect of executive directors because it says that it would constitute

“excessive interference in the day-to-day management of a company.”

The Commission argues that action at EU level is justified on a number of grounds, including that if there is not action at supranational level, insufficient progress will be made at national level towards more gender-balanced representation on company boards by 2020. The European Scrutiny Committee rejects that and objects to the draft directive on the grounds that it does not comply with the principle of subsidiarity. The reasons the Committee cites for its view include that it does not feel it is fair to say that member states acting individually will not achieve sufficient progress, given that

“many national measures have been introduced within the last year or two”.

The Committee’s objections to the directive are set out in the draft reasoned opinion that it proposes be sent to the presidents of the European institutions. The Business Secretary, who is once again absent from the House for the debate on this important issue, asks us in the motion to endorse the draft reasoned opinion, with which the Government agree.

The principal problem we have with the motion is that although there may well be strong arguments against the action envisaged under the draft directive, for the reasons that the Committee cites in the draft reasoned opinion, we have heard very little from the Government about how they might work constructively in other ways to advance the cause of equality in company boardrooms along with our European partners.

The Under-Secretary of State for Women and Equalities, who is also a Business Minister—[Interruption.] Yes, why is she not here? In her response to the report of the House of Lords European Union Committee on the issue, she said that the Government

“agrees that the EU has an important role to play in improving the representation of women on boards.”

If that is the case, surely the Government are obliged to say how that should happen, and to give more of a lead on what that role should be, if we want to lead the way in Europe on the issue.

Given that other European countries are also keen to see more women on boards, and given the extent to which many of our major companies operate across Europe, why have the Government not put forward proposals on what constructive moves European countries could make to work more positively together to promote having more women on boards? That would be good for tackling discrimination and promoting equality, and it would be good for business.

The situation is most unsatisfactory, because the Government have had a golden opportunity to make it clear that the UK wishes to be at the forefront of the debate on achieving greater equality across society both here and in the EU. Instead, without the Government having set out proposals on how member states could work together to improve matters, I fear that the motion will leave people with the impression that yet again, the Government are dragging their feet on issues of equality, diversity and representation. That is the problem. Although we do not propose to divide the House on this technical motion on a directive that is still at an early stage of development and negotiation, we urge the Government to reconsider their overall approach.

[Several hon. Members]

rose—

--- Later in debate ---

[Mr Dominic Raab (Esher and Walton) (Con)]

The draft directive is unprincipled and counter-productive. It needs to be understood in the context of the progress that has been made towards a more equal society in this country. We are sometimes churlish in acknowledging the strides that we have made, notwithstanding our desire to go further and faster. For example, the UK median full-time gender pay gap has almost halved since 1998. Women in their 20s now earn 3% more than men; women in their 30s earn almost the same. One of the key residual issues—in regard to the pay gap and, arguably, more broadly—appears to arise at the age of 40, when women with young families strive to strike the critical balance between child care and breadwinning.

Even at the top level, however, progress is being made. Figures from Cranfield university, some of which have already been cited, show that the number of female FTSE 100 directors more than doubled between 2000 and 2012. That demonstrates a high rate of change, albeit starting from a low base. Since March 2012, 44% of new FTSE 250 non-executive directors have been women. That is evidence in favour of the argument that the problem is to a large extent an historical hangover that will be corrected over time, although we can argue about how quickly that is likely to happen.

If we look across the piste at this issue, rather than just at what is happening in the boardrooms, we see that, for most modern couples, the juggling act between work and family is not just about women. It is about teamwork and about freeing couples to make their own choices. Let us also recognise that fathers are increasingly doing their bit, with a tenfold rise in stay-at-home dads in 10 years, supporting more and more women to pursue their professional ambitions. A 2011 study by Aviva found that 39% of cohabitating couples now share child care responsibilities equally, or have the father as the main child-carer. It is these grass-roots, bottom-up changes in social attitudes, and not regulatory diktat, that will deliver real change in this country.

In the light of that progress, it is anti-meritocratic in the extreme to suggest that women need quotas to succeed in modern Britain. I have lost count of the number of women who have told me how deeply insulting they find the idea. No one has mentioned this in the debate today. Boardroom appointments, like any other competitive recruitment, should be based on individual talent and hard work, not on positive discrimination. The entrepreneur and “dragon” from “Dragons’ Den”, Julie Meyer, powerfully argues that if someone is on a board because of a quota,

“your voice will be neutered and your advice won’t be heard”.

That is what this directive would achieve; that is what it is about. It would force top FTSE companies faced with equally qualified applicants to positively discriminate in favour of women, with fines and court-ordered annulment of appointments as the sanctions for non-compliance. Let us not kid ourselves, as those on the Opposition Front Bench are trying to do. This is a quota, not a target.

[Mr Umunna]

I have read the hon. Gentleman’s contributions on this topic, and I see that the headline to his recent piece in The Sunday Times was “Sorry, girls, a seat on the board must be earned”. I am sure that many women would find that quite insulting, although I am sure that he did not write it himself. I hear what he is saying about child care—I have said it myself—but does he not accept that there are certain cultural issues at play here? Lord Davies’s report indentified the fact that people seek to select people who are like them to positions on their boards, and that that operates as a barrier to women getting on to those boards.

[Mr Raab]

I note that the hon. Gentleman did not take issue with the substance of my article—[Interruption.] No, listen to my point. He talked about the headline, but, as a media-savvy politician, he well knows that I had no hand in writing it. He also mentioned group-think, and I think that there is a substantive point there, although it might not be the one that he wanted to make. If he will bear with me, I will come to that shortly.

I was about to make the point that the Commission’s notion of equally qualified candidates is an utter fallacy. As anyone in the real business world knows, a rigorous recruitment process will always identify the best, the brightest, the top person for the job, on merit. My wife works for Google, and she was interviewed 10 times, even after they had got rid of all the other candidates. That is a good example of a cutting-edge, high-tech firm testing and testing until it finds the very best candidate.

The directive is not just anti-meritocratic; it would also damage business competitiveness. No one has yet mentioned that. The Government estimate that it would cost listed companies £9 million between now and 2020, with additional ongoing monitoring costs. There is a far greater cost involved, too, but people are just too politically correct to mention it.

Oral Answers to Questions

Chuka Umunna Excerpts

Thursday 20th December 2012 Commons Chamber

[The Minister for Universities and Science (Mr David Willetts)]

I agree with my hon. Friend about the importance of diversity, and that is why we have liberalised the rules on the size of institutions that can take the name “university”, as a result of which 10 more higher education institutions fulfilled that criterion, seven of which have already received approval from the Privy Council to become universities.

[Mr Chuka Umunna (Streatham) (Lab)]

This has been a sad week for British retail. Comet has closed its doors after 79 years of trading. I am sure that the whole House will want to convey our deepest sympathies to the 6,900 employees who have subsequently lost their jobs at the worst possible time of year. Given that in less than a year the owners appear to have lost the £50 million dowry they received to buy the business and left the taxpayer with a £49.4 million bill, will the Secretary of State commit to publishing the findings of the inquiry he has set up into this affair?

[Vince Cable]

The hon. Gentleman is absolutely right that the collapse of the Comet chain has caused great distress, not only through direct job losses but through the effect on the supply companies. There is also a large amount of unpaid credit—£230 million, I think—and not least the taxpayer stands to lose £50 million. He repeats some of the very serious allegations that are being made about the people involved in the company. I take the allegations very seriously and that is why I have asked my Department to conduct a thorough inquiry under the powers it has.

The hon. Gentleman asked about publication. As it happens, under the law I am not allowed to publish the report, but I will try to ensure that he and his Front Bench colleagues are properly briefed whenever information becomes available.

[Mr Umunna]

I am grateful for that reply. In the case of Comet, OpCapita has very serious questions to answer. Cases such as these are also raising questions about our insolvency regime in general, which—in spite of being one of the best in the world—needs to be improved. For example, the number of reports of directors being unfit to hold office has increased, but the percentage of directors being disqualified has fallen massively. The pre-pack procedure has been heavily criticised, and we could adopt elements of the US chapter 11 procedure here.

The Department has said that it is reviewing the overall insolvency framework to see whether it is fit for purpose. For the benefit of the House, will the Secretary of State outline who is to do that review? Will there be a call for evidence, and when may we expect to be told the results?

[Vince Cable]

The hon. Gentleman is absolutely right that this episode reveals wider possible failures in the system. There may well be better ways to handle insolvency—although it is fair to say that in general the British insolvency regime is regarded as one of the best internationally—and we should be open-minded about other approaches. The American chapter 11 system may well be better and I want to have a proper look at that. We are specifically going to have a look initially at a narrow issue concerning insolvency practitioners and their fees. The Insolvency Service is being looked at as part of the red tape challenge, which is examining the regulatory system and how it can be improved. I also want to review more broadly whether we can adopt better practices across the piece.