Oral Answers to Questions

Debate between George Freeman and Bill Esterson

Thursday 24th October 2019 Commons Chamber

[George Freeman]

The hon. Lady makes an excellent point—I have a railway station in my constituency that is in desperate need of disability access—and that is why we have launched the Access for All programme. We will be looking to make sure that all those stations with the most urgent access challenges are sorted in the right order.

[Bill Esterson (Sefton Central) (Lab)]

Buses are a very important part of transport infrastructure, and my constituents will benefit enormously from the announcement by the metro Mayor of the Liverpool city region, Steve Rotheram, of a new metrocard. When will we improve bus service integration across the country by ensuring that we have a single smartcard, not different cards in different parts of the country?

[George Freeman]

I note the omission of thanks for the major package of investment in bus infrastructure, and I simply make the point that the Mayor has those powers. I am leading the Department’s work on smart ticketing, and we are keen to see Transport for the North and the Mayor lead that programme so people in that area can have integrated ticketing.

Draft Companies (Directors’ Remuneration Policy and Directors' Remuneration Report) Regulations 2019

Debate between George Freeman and Bill Esterson

Wednesday 15th May 2019 General Committees

[Bill Esterson (Sefton Central) (Lab)]

It is a real pleasure to serve with you in the Chair, Ms McDonagh, and it gives me the opportunity to congratulate you on the fine work you have done over the years in fighting for workers’ rights on a number of occasions. [Hon. Members: “Hear, hear.”] I am glad to have had the opportunity to say that.

The draft regulations remind us of how promises to curb executive pay used to have a prominent place in this Government’s agenda, along with issues such as having workers on boards. It was encouraging to see Julian Richer give employee ownership a vote of confidence yesterday, with his announcement about the future of Richer Sounds. I might also add that that was a welcome endorsement of Labour policy. It is in the context of long-running debates between both parties represented here this afternoon about worker and shareholder democracy that we are considering the draft regulations.

We do not oppose the draft statutory instrument, but we do not think it goes far enough in tackling the gap between the high pay of a handful of senior executives and the pay of everyone else.

The Institute for Public Policy Research North report that was published yesterday was a timely reminder of the income inequality that sees one in four workers in the north of England being paid less than the living wage, with many worse off than 10 years ago. Similar challenges and income inequalities exist right across the country.

The draft regulations state that the directors’ remuneration report must be made available, free of charge, on the company website for 10 years, showing any split or fixed and variable payment to directors. Crucially, reports must compare the annual change in directors’ pay with the yearly change in the pay of company employees, including over a five-year rolling period.

That sounds broadly fine but, as noted by the Secondary Legislation Scrutiny Committee and the House of Lords, the directive and draft regulations introduce other responsibilities that cut across a wide range of bodies, both departmental and non-departmental. The Minister referred in her opening remarks to those measures relating to the Treasury, the Financial Conduct Authority and the Department for Work and Pensions. When she responds, will she update us on whether other Departments will need to introduce regulations and, if so, when we can expect to see them? I ask that because the deadline to incorporate the EU directive into UK law is 10 June, so if additional regulations are required the Government will have to get a move on. That also gives rise to the question as to why it has taken until today to bring these draft regulations to Committee. Were the Government anticipating a no-deal Brexit, which would have resulted in the draft regulations not being transposed?

The essay crisis Prime Minister left office after the 2016 referendum. In his absence, I wonder if he has been replaced by an essay crisis Government. Looking at the former Minister, the hon. Member for Watford, who is sitting opposite me, perhaps I am on to something.

The High Pay Centre report shows that the Government urgently need to do more. It shows that between 2014 and 2018, the first full five years of the “say on pay” regime introduced by the coalition Government, every single FTSE 100 company pay policy put to annual general meetings was approved by shareholders. Across more than 700 pay-related resolutions voted on at AGMs over the same period, the average level of shareholder dissent was just 8.8%, and only 11% of pay-related resolutions attracted significant dissent levels of over 20%.

The intervention by my hon. Friend the Member for Slough about the challenge posed by the disengagement of owners and shareholders of large corporations is particularly pertinent. He asked how the draft regulations address the gap between top executive pay and everybody else’s, as well as the gender pay gap. The Minister has indicated, as do the draft regulations, that information is provided. What is not provided is a way not just to change the culture of shareholder disengagement, but to create a regulatory environment or teeth to address the challenge and difficulties presented by both the pay gap and the gender pay gap.

[George Freeman]

Does the hon. Gentleman agree that it is important to look not only at the gap between the highest and lowest paid in a company, but at the extent to which remuneration is linked to company performance overall, and the extent to which those who are being rewarded are being rewarded for taking risks and delivering above-trend growth? Does he also agree that we should look at the broader issue of wider share ownership in a company? Inequality in itself is not necessarily a problem, provided that the people who are lower paid are benefiting from the success of the company. Does the hon. Gentleman agree that that is as important a metric?

[Bill Esterson]

That is a very good challenge. Julian Richer is a responsible employer who has treated his employees very well over many years. He is giving a £1,000 bonus to each staff member and delivering an employee-owned future for the business.

One of the historical problems with the regime of rewarding performance is that it has rewarded apparent immediate success without taking the longer term into account. There have been scandals over many years, with some senior executives raking in enormous bonuses only for us to discover later that the apparent success of the organisations they ran was built on sand and that the true underlying performance was not reflected in the short-term results. We can all think of some very high-profile examples; Enron is one, but there have also been many in this country, which I deliberately will not mention at this stage. The hon. Gentleman’s challenge is an important one, but we have to make sure that any executive remuneration is truly fair over a longer period.

To be fair to the hon. Gentleman, I think he accepts the wider point that fair pay must reflect the contributions of people throughout the organisation. There is a degree of consensus that it is extremely important for the relationship between the pay of senior executives and that of others in the organisation to be fair and balanced, difficult though attempts to achieve that may be. I welcome this debate and the fact that the draft regulations address the matter, but the question is how much further we need to go and what steps we must take to maximise the potential benefits.

When the current Prime Minister took over, she made an initial commitment to put workers on boards, but it was very quickly downgraded and appears not to have advanced. Perhaps the Minister could tell us when those sorts of measures might be introduced.

Following on from the intervention from the hon. Member for Mid Norfolk, what is the most effective way to bring up the pay of working people and combat rising inequality? The answer is to join a trade union. The Government have failed to move beyond the union-busting mindset—that is obvious from their Trade Union Act 2016—and to look to a future that involves unions and employers working together responsibly. The Institute for Public Policy Research has shown that there is a strong correlation between high shares of income going to the top 1% of earners and low trade union membership.

Land Registry

Debate between George Freeman and Bill Esterson

Thursday 30th June 2016 Commons Chamber

[George Freeman]

The right hon. Gentleman makes an interesting point. I was just setting out the reasons for dealing with sectors such as aerospace, telecoms, gas and other utilities, and British Leyland. Does anyone seriously think we should still have a car industry in the hands of the management of British Leyland? I doubt it. I merely remind the House that the reasons for those privatisations were to do with competition and choice, investment, management and the reduction of liabilities on the public balance sheet.

What would be the rationale were the Government to take privatisation of the Land Registry forward? Well, I can confirm that the Government have absolutely no plans for this. We have carried out the consultation and we are in the process of hearing, loud and clear, what is said. For those watching from the Gallery and wondering why it is even being considered, the rationale would be to create a basis on which the Land Registry, if it needed it, could raise substantial extra investment that the Government could not provide. It could be a mechanism to get a substantial injection of new leadership, to help the Land Registry to deal with the opportunities of globalisation—around the world, newly liberated and fast-growing economies and societies are looking to copy the UK model in many respects, and this might be one of them. And yes, it could be a mechanism to help us to tackle a still ongoing and chronic debt and deficit crisis, which has saddled the next generation of this country with debts. The Government look all the time at the public balance sheet, so those are the reasons why an institution such as the Land Registry might be worth considering.

[Bill Esterson]

The Minister is giving reasons why the Government might look at something. If the Government do not have a view, why was the consultation framed as it was—in terms of how to privatise, not whether to privatise? Does that not suggest a fundamental commitment to the privatisation?

[George Freeman]

I suggest that the best indication of our commitment is what I am saying at the Dispatch Box right now. I will comment in a moment on events going on outside this Chamber, which will determine how this is ultimately taken forward.

I was making the point that the Government have carried out a consultation. It is right that, as a responsible Government, we keep under review whether and how functions that are currently the monopoly responsibility of the state can be better financed and thrive more with new freedoms, and by so doing put the public finances on a stronger footing. I merely set out the rationale on which such matters have been addressed in the past and confirm once again that the Government have no plans. This is merely a consultation. We have received no bids; no decision has been made.