Oral Answers to Questions Debate
Full Debate: Read Full DebateKelly Tolhurst
Main Page: Kelly Tolhurst (Conservative - Rochester and Strood)Department Debates - View all Kelly Tolhurst's debates with the Department for Business, Energy and Industrial Strategy
(5 years, 2 months ago)
Commons ChamberAverage FTSE 100 CEO pay more than quadrupled from £1 million in 1998 to £4.5 million in 2012. Since then, the median average has fallen by £1.04 million. We have recently implemented a number of reforms to make further improvements to executive pay transparency and accountability through vehicles such as the UK corporate governance code.
The Government’s Green Paper on corporate responsibility was published more than two years ago, and since that time we have seen corporate pay issues in Carillion and only last month in Thomas Cook. Last week, the Business, Energy and Industrial Strategy Committee questioned the chief executive of Thomas Cook about corporate responsibility issues on pay. What precisely have the Government done to act on corporate pay since that Green Paper two years ago?
I thank the right hon. Gentleman for his question. As I mentioned, CEO pay has fallen. There were reforms at the beginning of the year, to ensure that shareholders’ voices are heard more in the boardroom. There is a binding vote every three years on remuneration policy, and there is now an advisory vote every year. If it is not successful, pay has to be put before the next AGM. As he will know, the Investment Association now keeps a record, at the Government’s request, to ensure that we are tracking pay where there is shareholder dissent.
Does my hon. Friend agree that the right way to control executive pay is to increase democratic control of capital, not by increasing the powers of the state but by dramatically improving the rights of shareholders?
My hon. Friend is right, and that is what the Government’s reforms have done. As I outlined, shareholders have a vote every three years and an advisory vote every year. Through the reforms, we have also enabled employee directors, non-exec directors or employee councils to have representation on the board. Companies now have to explain their wider pay policy and how it affects the whole company.
The chief executive of Thomas Cook was paid more than £8 million during his time as chief executive of a company that has now collapsed, costing 9,000 jobs in this country, with 150,000 customers having to be brought home at a cost to the taxpayer. When he gave evidence to our Select Committee last week, he said he would reflect on whether he will pay back any of his bonus. What will the Government do to ensure that bonuses can be and have to be clawed back after catastrophic failures of businesses like that?
I thank the hon. Lady for the work she is doing on the Select Committee. Thomas Cook did have clawback and malus arrangements in place for the recovery of directors’ bonus payments in specific circumstances, as required by the UK corporate governance code. My right hon. Friend the Secretary of State has asked the Insolvency Service to fast-track an investigation, and it will report back. As the hon. Lady outlined, the CEO did advise the Committee on 15 October that he would consider voluntarily surrendering some of his 2017 cash bonus, but it must be pointed out that no bonus was paid to the ex-CEO in 2018.
The hon. Member for Leeds West (Rachel Reeves) highlighted the point that the biggest concern is not simply how much is paid to executives, but their being paid for failure, not for success. The current arrangements in British company law allow chief executives and other executives to be paid on the basis of share price and allow them to buy back shares, propping up the share price. This is a formula for payment for failure. Is the Department looking at that?
I thank my right hon. Friend for raising this. Part of the reforms in January was to make organisations report back on the effect of share price growth on executive pay outcomes. We published some evidence before the summer from a review undertaken on share buy-backs, and there was no clear evidence to suggest that they did have a perverse outcome.
All workers in the UK have the right to join a union and to participate in union activities. That right is protected under trade union law, and 23% of UK employees are union members. That is higher than some European countries, including France and Germany, and it demonstrates that union rights to recruit and organise through individual members and officials are sufficient.
This week shocking reports have emerged about dire workplace conditions at Amazon. Those exploited workers desperately need a union, but workers at Amazon have had their shift patterns interrupted just to prevent them from talking to union officials on the way to work. When will the Government put an end to those draconian anti-union practices, and will the Secretary of State launch an investigation into reports of workers’ rights being violated at Amazon?
I thank the hon. Gentleman for his question. It is the right of unions and employers to come to an agreement about representation in the workplace. The Central Arbitration Committee is available if that is refused. With regard to workers’ rights, the good work plan represents the biggest reform of workers’ rights in 20 years. We are determined to continue on that path, because workers’ rights are important to this Government.
It will come as no surprise that I completely disagree with the hon. and learned Lady. The Prime Minister has been clear: not only will we maintain workers’ rights, but we will enhance them. Even in my role as a Minister over the past 12 years, everything has been focused on ensuring we are ahead of the European Union. We are committed. We have never, ever, not once ever put forward a position where we have shown we will row back on workers’ rights.
Wow! What an answer. This is the situation for workers at Amazon: their bones are being broken; they are being knocked unconscious; and they are being taken away in ambulances. Where is the urgency to step in and stop what is happening to these workers? Are the Government going to demand an urgent inquiry, or do they wash their hands of these workers? At the heart of the issue at Amazon is a hostile environment for trade unions, which are often the only force that can resist exploitative practices. A Labour Government would legislate to enforce access rights for trade unions and a robust enforcement regime. Why are the Government sitting on their hands while the richest man in the world treats his workers so disgustingly on their watch?
The hon. Lady makes allegations about a particular organisation. She is welcome to write to me further about those allegations, but I remind her that sufficient workplace laws are in place. We have the Health and Safety Executive, for example. If she has evidence of certain employers breaking the law, I would expect it to be passed on to the relevant agencies. As I outlined, our Prime Minister is committed to ensuring that we keep step with the European Union and go further. I believe the actions the Government have taken over recent months prove that.
The Government are wholly committed to women’s participation in the workforce, including by supporting new mothers to return to, and thrive in, work. That is why we recently consulted on a broad range of proposals to help families to balance their work and home commitments. We have also announced our intention to extend redundancy protection to new mothers returning to work.
I thank the Minister for that answer. What support are the Government giving to new mothers who, sadly, have experienced stillbirth?
First, I pay tribute to my hon. Friend and Members across the House who participated in Baby Loss Awareness Week and the emotional debate in the House. The Government have committed to introducing parental bereavement leave and pay, which will apply to parents who lose a child under the age of 18, including parents with stillbirth. We plan to lay the regulations to implement the policy in January, ready to come into force on 6 April. That will support new mothers facing these tragic and difficult circumstances.
Discrimination against new mothers and pregnant women is still widespread in our country. When are the Government going to take it seriously?
I point out that discrimination in the workplace is illegal; it is unlawful. I have just outlined that we have announced our intention to extend redundancy protection for those mothers who return to work.
Good-quality flexible working is important to all employees and is central to good work. Workers’ rights matter. Over 97% of employers offer some form of flexible working, and our recent consultation looked at how further to increase the prevalence of flexible working by advertising jobs as flexible and by requiring large employers to publish their policy.
I thank the hon. Lady for her question and I am more than happy to meet her to discuss her constituency in further detail if she would require. There is no programme of closures and the Post Office is working extremely hard, where post offices do shut for any, sometimes unpredictable, reason, to find replacements. We do have outreach services that are available when there is a lack of service, but I am happy to speak with her further about that.
I welcome the Secretary of State to the Dispatch Box and hope that she will have distinguished tenure at this important time. She will know that the recommendations of the independent review of the Financial Reporting Council, conducted by Sir John Kingman, were widely endorsed and are urgently required. I was concerned that the statutory implementation of those recommendations was not included in the Queen’s Speech. Can she assure me that she is not going to miss a golden opportunity to make these reforms and give a big boost to our standing in the world?
I am not sure whether the hon. Lady is aware that we undertook one of the biggest recalls that has happened this year: the recall of Whirlpool tumble dryers. She will know that I have updated the House on the progress we have made on that. Since 12 June, when I announced the recall, we have had more than 90,000 contacts, with people getting in touch about recall. So we are continuing to improve and work on recall.
More than half a dozen post offices in East Renfrewshire have closed over the past couple of years and not one has been able to be replaced, because it was not a viable business proposition for retailers. Does the Minister think that increased fees under the banking framework agreement will be enough to build the sustainability of the post office network?
I thank my hon. Friend for that question. I am happy to discuss particular issues in his constituency. I believe that the new banking framework and the increase in remuneration that postmasters will be receiving as part of that framework will make a significant impact for postmasters. But he is right to say that we must not stop there. I am working hard, with the Post Office and the National Federation of SubPostmasters, to make sure that we have a post office network that is fit, relevant and viable.
I thank the hon. Lady for her question, but I have to disappoint her because my answer to it is no.
I was delighted to hear that Seagreen wind farm off the coast of Angus was successful in its bid in the UK Government contract for difference auction. It will be the most powerful wind farm throughout the United Kingdom and will have the ability to power up to 40% of Scottish homes. Would the Minister like to come to Angus and see the impact it is already having on our local economy? The local port has already secured the contract for the operations and maintenance base.