House Building Targets

Debate between Hugh Gaffney and Siobhain McDonagh

Tuesday 11th June 2019 Westminster Hall

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Thank you, Mr Hollobone; it is a pleasure to serve under your chairship. I congratulate the hon. Member for Newton Abbot (Anne Marie Morris) on securing this particularly important debate.

Since 2010, housebuilding has fallen to its lowest level since the 1920s. Rough sleeping has risen every year, rents have shot up faster than incomes, there are almost 200,000 fewer homeowners and new affordable housebuilding is at a 24-year low. Meanwhile, average house prices are at a record high of almost eight times the average income, yet we wonder why home ownership is at its lowest level in Britain since 1985.

In reality, although 1.2 million people are on housing waiting lists across our country, this Government delivered just 6,464 social homes in 2017-18. That is simply diabolical when compared with the 150,000 social homes delivered every year in the mid-1960s. The evidence is clear: it has been done before and can be done again.

The housing crisis is about the reality behind those statistics. I am tired of the endless reports, countless debates, fruitless words and lack of action. The Government have a house building target of 300,000 new homes per year, but they simply cannot keep willing the completion of more homes without finding the means to provide them. Here are some of those means.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

North Lanarkshire Council is the biggest homeowner in Scotland. Some £160 million has been invested in 1,000 houses, on top of 800 new houses. North Lanarkshire is leading the way in Scotland. More of that can be done by the Scottish and UK Governments.

[Siobhain McDonagh]

I thank my hon. Friend for his intervention.

First, it is time to burst the myth that the green belt is green and start using the non-green sites for the homes that our children so desperately need in London alone. There are garage sites, waste plants and deserted scrublands all posing as green-belt land. Would we rather use them for homes that our young people can afford to buy, or are we happy for scrappy plots of land and non-green-belt land to remain wrongly designated as green belt just because of the potential furore that de-designation may cause?

Secondly, the Government should introduce planning policy guidance so that all new building on public sector sites is considered for social housing in the first instance. Thirdly, is it not time to end the taboo and encourage the building of modular homes? They are cheap, efficient, quick to build and can last for up to 120 years.

Fourthly, why are the Government not introducing more punitive action for the 200,000 homes currently lying empty across our country? Fifthly, how about increasing the surcharge for the 10% of people who own a second property before so many even own their first? Sixthly, the Government should introduce punitive or preventive action for land bankers. After all, if the Government started unlocking their own land bank, the private sector would rush to follow.

Seventhly, what about reducing the proportion needed to buy into shared ownership, from 25% to 5%? Eighthly, could the Government not incentivise more building of specialised accommodation for the elderly, thereby releasing some of the current housing stock? Ninthly, it is time to prioritise locally, especially in the capital. Londoners should have first option on local properties before they are sold off internationally and are likely to remain empty.

Finally, how about directing pension funds into residential investment? As my hon. Friend the Member for Croydon Central (Sarah Jones) will know, Legal & General bought 167 homes in Croydon and leased them back to the local council over 40 years, for homeless families. Those are just some suggestions. In the name of all the families who we see every week at our advice surgeries, let’s get building!

FTSE 100 Company Pay Ratios

Debate between Hugh Gaffney and Siobhain McDonagh

Wednesday 23rd January 2019 Westminster Hall

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

I beg to move,

That this House has considered FTSE 100 company pay ratios.

It is a privilege to be under your chairship today, Mrs Moon. I have to be honest and open with the Chamber: I am guilty of trying to dumb down parliamentary proceedings; I attempted to call this debate “Fat Cat Friday”. However, the Table Office pointed out that that would not be correct in the circumstances. I wanted to call the debate that because by lunchtime on Friday 4 January, the UK’s top chief executives had earned more than their average employees would earn over the entire year. Those chief executives take home astronomical figures that are more like telephone numbers than salaries. Although the average employee has seen their salary remain stubbornly low, the pay packets of the FTSE 100 chief executive officers have risen by an average of 11% over the last year alone, soaring to a staggering average of £3.9 million per year. How can that be right, just or fair?

Let me emphasise right from the beginning that I have absolutely no qualms about those at the top being paid well; I appreciate the demands of running one of the UK’s biggest organisations. And I am not, at the moment, calling for a pay cap or a widespread cut to chief executives’ pay. I am calling for fairness—for the importance of the contribution of those at the bottom to be recognised in line with the contribution of those in the boardroom; and for organisations to determine the pay and reward schemes of all employees in one whole-company pay policy.

I will describe in more detail the pay ratios across the FTSE 100, and will consider the causes and consequences of such extreme differences in pay within organisations. Then I hope to detail the reality in some specific organisations, before considering the tangible steps that the Minister and this Government should take to combat such unfairness in the workplace.

Let us start with the FTSE 100. In advance of this debate, Will Turvill of The Mail on Sunday made a remarkable analysis of the pay ratio between FTSE 100 CEOs and the average wage of workers at their firms. Staggeringly, his results reveal that one FTSE 100 company, Melrose Industries, pays its chief executive a completely eye-watering 1,000 times more than the average wage of its employees. I appreciate that this is an extreme example, but few of the other 99 companies on the FTSE 100 index can consider themselves exempt from being similarly unjust.

Even among the FTSE 100, there is inconsistency and disparity. A FTSE 100 CEO is more likely to be called David or Steve than to be a woman or to come from an ethnic minority. What is more, the six female FTSE 100 chief executives earn just 54% of the salary of their 94 male colleagues. However, that is a debate for another day, because it is the FTSE 100 index as a whole that I will focus on today.

Back in the late 1990s, the pay of a FTSE 100 CEO was an extortionate 59 times higher than that of their average employee. If we fast-forward 20 years, it has sky-rocketed to being an eye-watering 145 times higher, and rising. Let that sink in: it means that it would take the median UK worker an extraordinary 137 years to earn a FTSE 100 CEO’s annual pay. Is a chief executive today working that much harder than they did just 20 years ago? The statistics suggest otherwise, as there is very little evidence that soaring CEO pay has incentivised or been the reward for better company performance, because the value of the FTSE 100 has changed little since the late 1990s. However, the pay of FTSE CEOs has increased by 300%. Meanwhile, two thirds of these top firms fail to pay the living wage.

Such mind-boggling figures are difficult to comprehend. To provide some perspective, a FTSE 100 CEO is paid an estimated 132 times more than a police officer, 140 times more than a teacher, 165 times more than a nurse, and an astronomical 312 times more than a carer. These indefensible ratios are a slap in the face for hard-working employees across our country who, at the very least, expect to take home a fair day’s pay for a fair day’s work.

Before this debate, the House of Commons digital engagement team kindly sought the views of the public on this matter. One person said that

“when their employees are working full time and not being able to afford proper accommodation, energy, food, transport or children, suddenly the difference in pay seems rather stark.”

Another person suggested that

“there should be a pay ratio, so if CEOs wish to continue enjoying these luxuries they must ensure that their lowest paid employees are earning a sufficient amount.”

I believe that the pay ratios that I am describing are utterly unacceptable, unjust and unfair. As the executive director of the Equality Trust, Dr Wanda Wyporska, says:

“A society that values its teachers, care workers and nurses at less than 1% of a FTSE CEO is beyond broken”.

Her view is a common one, with an Oxfam survey finding that 72% of people want to see the Government urgently addressing the income gap between rich and poor.

What is causing such extraordinary executive pay to continue soaring? Perhaps it is the fact that former or serving chief executives pack the remuneration committees that set pay levels at large companies; perhaps it is the decline in trade union membership; or, most likely, it is the inaction of the Government on ensuring that fairness is at the heart of the world of work.

These pay ratios stem not just from extortionate salaries, but from extraordinary incentive schemes that are increasingly reserved only for those in an organisation’s boardroom. I must be clear once again: I have no problem retaining incentive pay for executives. However, incentive schemes should be available to all staff on the same terms.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I am sorry for stopping a good speech, but my hon. Friend mentioned incentives; these CEOs also have the incentive of awards, including CBEs. Paula Vennells of the Post Office got a CBE, as most of these fat cats do. They end up getting awards, OBEs, knighthoods and all the rest of it, while the workers are suffering. There are people at the Post Office who face difficulties because of Horizon, a new system that has come in. Good postmasters—good people who are loyal to their communities—have been taken to court, and some of them are now going back to court. Will these CEOs be stripped of their knighthoods and awards?

[Siobhain McDonagh]

I thank my hon. Friend for that intervention. I will consider the Post Office a little later in my speech.

Having such incentives for all staff seems like a common-sense way of providing sensible alignment between average workforce pay and executive pay. It is a straightforward, practical idea to have a whole-company pay policy. Let me describe in more detail the reality at specific organisations in the FTSE 100 to illustrate the inequality that grows in the absence of a whole-company pay policy. I will start with Persimmon, whose former boss, Jeff Fairburn, last year received, on the back of Help to Buy, £47 million, which is an extraordinary 882 times the average salary of his workers, before he lost his job. We all remember the backlash when Mr Fairburn was granted a £75 million bonus. In the heart of a housing crisis, do we really think that he should receive such a staggering sum, or should we have seen that money helping young couples who are looking to get on the housing ladder?

How about the owner of Ladbrokes, GVC, whose chief executive, Kenny Alexander, raked in pay that was a huge 484 times higher than the average pay of his workforce? And how about Tesco, whose CEO, Dave Lewis, received a £4.9 million pay packet, which is 303 times greater than the average pay of his employees? Is he working 303 times harder, longer, or better than them?

Then there is Sainsbury’s: a pillar of the Great British high street. Over 148 years, it has established a reputation as a leading retailer and a good company to work for, but its lack of a whole-company pay policy has led to the most disgraceful discrepancy in its staff salaries. Under the guise of an increase in basic pay, 9,000 loyal and long-standing Sainsbury’s staff are set to lose up to £3,000 a year from 2020. They will forgo their paid breaks, the night shift will be shortened, and their Sunday premium will be removed. While those shop floor staff will see their bonus scheme scrapped under these new contracts, CEO Mike Coupe takes home an eye-watering bonus of £427,000 as part of his £3.4 million pay packet, and although the salaries of those staff are crumbling, their bills, mortgages and rent are still the same at the end of each month. I wonder whether Sainsbury’s remuneration committee gave a moment’s thought to those staff when it signed off its executive bonuses. When the board and remuneration committee sit down to discuss what the pay package for Sainsbury’s CEO is going to be, they should also be deciding the pay and conditions for their lowest-paid staff. If they thought about those two things together, there would be a bit more modesty, a bit more honesty and a bit more embarrassment.

Such inconsistency and injustice has grown to become the norm throughout the FTSE 100 and across the high street, with treasured organisations such as Marks & Spencer and B&Q falling foul of the expectation of organisational fairness. The absence of a whole-company pay policy in such organisations has led to unjust disparities. It is at this point that I turn to the Royal Mail.

Of course, examples of those disparities can be found outside the FTSE 100, and I thank the Communication Workers Union for bringing the following example to my attention: since the Royal Mail was privatised by the coalition Government, the pay of its CEO has soared beyond recognition. Before privatisation, the total pay of the chief executive, excluding their golden hello, stood at just over £1 million, 50 times higher than the average wage in the organisation and 78 times higher than the lowest wage. Since privatisation, the chief executive’s salary has doubled; it is now 90 times higher than the average wage and an unjustifiable 123 times higher than the lowest wage. What would have been money for a public asset and its workers is being pocketed for private profit at the very top of the company.

As for Post Office Ltd, things started to change once it was decoupled from the Royal Mail. A postal assistant earns just 3% of the salary of the chief executive, who received a 7% pay rise last year. This is an organisation that is overseeing the privatisation of Crown post offices across the country and the potential transfer of hundreds of Post Office staff to WHSmith, rated by Which? as the worst retailer on the high street. I emphasise once again that I am not calling for a cut to, or a cap on, the chief executive’s salary; I am calling for consistency, parity and fairness across her organisation.

I am pleased to see the Minister here to respond to the debate. She may remember that we met last year to discuss exploitative pay in assignment contracts, which are thankfully about to be abolished, so she has shown that she is willing to listen. Let me assess the further steps that could be taken to bring fairness back to the world of work. In August 2017, the Prime Minister described the “excesses and irresponsibility” of some big business moguls as undermining confidence and damaging the social fabric of our country. If only she had followed those strong words with strong action!

Granted, new rules that will force all UK firms with 250 or more employees to start publishing their pay ratios should be warmly welcomed. However, those figures will be based on the median average of UK employees—that is, the salary of the employee halfway between the top of the scale and the bottom. A truer reflection would be to use the mean figure, taking into account the ratio of the lowest-paid employee compared with the highest. I ask the Minister how that policy will ensure that such extreme pay ratios do not occur in the first place, and what happens if and when they are shown to continue.

As the Chairwoman of the Business, Energy and Industrial Strategy Committee, my hon. Friend the Member for Leeds West (Rachel Reeves), says:

“If shareholders won’t or can’t hold these companies to account, then we will need Government to step in with tougher rules that clamp down on this kind of executive reward.”

Naming and shaming companies, and other piecemeal reforms that rely on organisations’ good will, have proven wholly ineffective. What is more, it is overwhelmingly clear that such excessive and unequal pay ratios are unpopular with the general public and reduce staff morale. The Mail on Sunday revealed this weekend that CYBG, the owner of Clydesdale bank and Yorkshire bank, faces a shareholder revolt at its annual general meeting over excessive bonuses for bosses.

However, we should not wait for isolated pushbacks. I suggest that the Minister takes note of the example of Sweden, ranked one of the happiest countries in the world, where companies with pay gaps face fines if they fail to close them. Furthermore, trade unions should have reasonable access to workplaces, and all FTSE 100 companies should strive to be accredited by the Living Wage Foundation. Most of all, I call for the important contribution of those at the bottom to be recognised in line with the contribution of those at the top, and for organisations to determine the pay and reward schemes of all their employees through one whole-company pay policy. If an incentive scheme is made available for some staff, it should be on offer for all within that organisation, on the same terms. Why should any organisation have a rule for just some employees, not a rule for all?

If a whole-company pay policy does not work, perhaps it is time to introduce a maximum pay ratio at those organisations. In an ideal world, I would not want society to be so prescriptive, but the worsening inequality I have described undermines our democracy, and I believe that our social democracy relies on fairness. It is based on the belief that people will behave reasonably, so when our democracy is not fair, the state must become involved. This is about more than just money, the economy and the world of work. Unfairness at these levels breeds cynicism—the feeling that the system just does not work for the ordinary person—and if that system does not work, why should a person trust in, vote in or participate in it? A lack of fairness produces spiralling disharmony and disaffection in society, and it is our duty as democrats to solve it.

The fact that it takes just three days for the UK’s top chief executives to earn more than the average employee is utterly shameful. After a hard day’s work, the very least that an employee deserves is to take home a fair wage that is in proportion to that of their colleagues. Across the FTSE 100, the absence of whole-company pay policies results in organisations rewarding the minority in the boardroom at the expense of the majority at the bottom. Enforcing or encouraging a whole-company pay policy in those organisations would be a sensible, logical and practical step towards ensuring that all hard-working employees receive a fair deal at work.

Ahmadiyya Muslim Community

Debate between Hugh Gaffney and Siobhain McDonagh

Thursday 24th May 2018 Commons Chamber

[Siobhain McDonagh]

I absolutely agree with the right hon. Gentleman. Will the Minister take urgent steps to call on the Government of Pakistan to allow Ahmadis to vote in the upcoming elections without denouncing their faith?

After facing a life of hatred, the end of an Ahmadi’s life in Pakistan does not necessarily mean the end of persecution. There are countless examples of Ahmadis being denied the right to burial, with the protesting extremists claiming that they have no right to a burial in a Muslim graveyard. Gravestones have been desecrated and vandalised, and there have also been incidents of exhumation of deceased bodies. To return briefly to the case of Professor Abdus Salam, the Nobel prize-winning scientist, the word “Muslim” has been erased from his gravestone, under a court order.

Electoral disenfranchisement, discrimination in law and expulsion by society have left the Ahmadi community in Pakistan voiceless. So today we must be their voice, for even the constraints of life provide no constraints for the persecution that an Ahmadi in Pakistan may face.

Such persecution, however, is found not just in Pakistan, Algeria, Egypt, Burundi and Indonesia—it can be found right here in the UK, right on our doorstep. Over recent weeks, the all-party parliamentary group on the Ahmadiyya Muslim community, which I proudly chair, has been running a five-part inquiry into the persecution faced by the Ahmadi community. We have heard the testimony of dozens of Ahmadi men and women, describing the scale of hatred that they have faced. It is truly shocking.

The most stark and shocking example in the UK took place just two years ago in Glasgow, where Ahmadi shopkeeper Asad Shah was brutally murdered.

[Hugh Gaffney (Coatbridge, Chryston and Bellshill) (Lab)]

I pay tribute to my hon. Friend for the important speech she is making. Will she join me in paying tribute to Asad Shah, who was stabbed to death outside his shop in the Shawlands area of Glasgow in 2016? His death shows that we have much to do to raise awareness of and increase support for an important minority group. He was a brilliant man and loved by everyone in his community, recognising that the differences between people are vastly outweighed by our similarities. Asad left us a tremendous gift and we must continue to honour that gift by loving and taking care of each other. We can honour Asad by living in a world of equality as one race—the human race.