Living Standards

Lord Davies of Oldham Excerpts

Monday 5th September 2011 Lords Chamber

[Lord Sassoon]

Just to be completely clear, inequality increased under the previous Government. The latest data show inequality coefficients to be flat, but it is too soon to see what the trends are under this Government. However, inequality increased under the previous Government—and that was in a decade when 40 per cent more in real terms was put into working-age benefits and tax credits, so this is a very difficult problem to crack. However, I agree with the noble Lord that it is important that informed and active shareholders make sure that they consider the split of rewards within companies between shareholders and employees—and that is precisely why it is high up the agenda of my right honourable friend the Business Secretary, who is considering proposals as we speak.

[Lord Davies of Oldham]

My Lords, the House will have appreciated the Minister’s customary lucid answers to these questions, but the country will be more interested in the obvious question. How is it that after the banking failure of three years ago banking practices in terms of remuneration are being restored to their customary outrageous level?

[Lord Sassoon]

Unlike the mess that the previous Government left behind in banking—we really do not need a lecture on this—the Merlin agreement put in place by this Government is making sure not only that credit is delivered by the banks to our hard-pressed industry but that bankers’ remuneration was less in 2010 than it was the year before and is less than it would have been without that agreement in place. This Government are therefore very much on the case with bankers’ remuneration, as with so many other aspects of this very difficult inequality challenge.