Queen’s Speech

Lord Smith of Clifton Excerpts

Thursday 9th May 2013 Lords Chamber

[Lord Phillips of Sudbury]

My Lords, I wish to speak to the constitutional aspect of this debate and about the volume and complexity of legislation. I am encouraged to do so because it has preoccupied me since before I came into this House 15 years ago. I suppose that is partly, if not mainly, because I have been a general practitioner solicitor for a great part of my life and was for 24 years what was called the “legal eagle” on “The Jimmy Young Show”, fielding citizens’ concerns about the law from all round the kingdom. The other thing that has encouraged me to talk about this matter briefly is the report—I do not know how many of your Lordships have seen it—When Laws Become Too Complex, put out by the Office of the Parliamentary Counsel in March. I am not aware that a similar report on legislation has ever been produced by parliamentary draftsmen themselves. It is an important and readable document, and I urge it upon your Lordships.

The other encouragement for my few brief words is the state of politics in our country. That was manifested clearly by the local elections last week. Surprisingly, one may think, it is impossible to obtain from anywhere the level of turnout at those elections. It is quite bizarre, is it not? It is apparently left to two academics at Portsmouth University—

[Lord Smith of Clifton]

Plymouth.

[Lord Phillips of Sudbury]

Plymouth. I thank my noble friend Lord Smith very much for that vital piece of accuracy. I rather get the impression that the turnout throughout the country was hovering at around 30%, on average. If you consider that among voters aged under 30, of whom fewer than one in four turned out at the previous general election, possibly only one in 10 cast their votes last week. I do not think that anyone sitting here believes that we are in our prime as a democracy or a Parliament.

We should never forget that the expenses scandal is not a thing of the past. I did a bit of canvassing this time; and the expenses scandal has marked the mind of the British public much more deeply than we would wish, I fear. We all know well about the Leveson inquiry and what it showed in terms of the press, the police and so on. All in all, we are in a dangerous phase, particularly given the continuing crisis in the financial and banking sectors.

A significant element in this disillusion relates to the astonishing amount of complex law that we churn out from this place, year after year. It may also surprise your Lordships that our Library does not stock a complete set of statutes from this side of 2009. You cannot even obtain loose-leafed copies of statutory instruments from 2010, for example. However, those from 2009 are available. In that year, this place produced in excess of 16,000 pages of new statute law; the split was roughly one-quarter Acts of Parliament and three-quarters statutory instruments.

There are a number of lawyers here; all of us, I suppose, are lawyers of a sort because we legislate this stuff. However, we know very well how extraordinarily complex legislation has become because of the extent to which any new law has to fit into existing law. The situation becomes overwhelming, and I have noticed that in the course of our deliberations on Bills there has been a marked reduction in the number of Peers who sit here trying to grapple with amendments that tax the wisdom of Jove.

For example, since 1984, we have passed more than 100 criminal justice Acts of one sort or another and have brought into existence more than 4,000 criminal offences. I suspect that that represents rather more than were created in the whole of our previous history. EU law finds reference in 10% of our legislation, and on top of that we gold-plate EU legislation to an astonishing extent. These are not my statistics; they come from the fine document by the parliamentary draftsmen to which I referred. They provide an example of directive 2002/42, which consisted of 1,167 words in the English text issued from Brussels. By the time we had ploughed it into our own legislation, it had gone from 1,167 to 27,000 words. What is it about this Chamber, using God’s own language, English, that we manage to produce this—I am tempted to use a very rude word—excess of legislation? So far as the people of this country are concerned, it is oppressive, distancing, expensive, disillusioning, disengaging, centralising and dependency-making—you name it.

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[Lord Smith of Clifton]

My Lords, perhaps I may continue with one of the themes of the speech of my noble friend Lord Rennard and pay specific regard to gender equality in corporate life. I make no apology for again raising this issue because the problem is not improving quickly enough and in some respects is getting worse. Three examples illustrate that.

First, women have suffered much greater job losses than men in the current recession, as the noble Lord, Lord Low of Dalston, emphasised earlier. Secondly, women are still paid substantially less, job for job, than their male counterparts. Only last week it was reported that women earn 20% less than men in financial services. Moreover, the European Commission ranked the UK 21st out of 28 countries on equal pay. PricewaterhouseCoopers has found that Britain’s progress on other measures such as female unemployment and part-time working has been slower than in other countries so that its relative position has deteriorated. Thirdly, and more widely researched, is discrimination against and consequent gross underrepresentation of women in business at board level. This had been the subject of the government-appointed Davies commission, which reported in 2011. That report showed how dire the situation was and called for a 25% ratio of women directors among FTSE 100 companies by 2015. This was to be achieved by evangelistic encouragement or “nudging”, as it is called. The noble Lord, Lord Davies, and his colleagues explicitly refrained from recommending the imposition of quotas despite the outstanding success of the quota scheme in Norway, which has been extensively emulated in many other countries.

“Nudging” has palpably failed. Recent research has revealed that FTSE 100 firms will fall far short of the Davies target, while the situation among FTSE 250 firms is quite abysmal. In a debate on 13 November last, both the noble Lord, Lord Giddens, and I predicted that the position would deteriorate—as it has—and said that only a quota scheme would bring success. The latest Cranfield University survey shows that the number of female executive directors has fallen in the past year among FTSE 100 companies, as has the number of female CEOs—which is always miniscule in any event. It also showed that the number of women on sub-board executive committees had fallen since 2009 from 18% to 15%, which is a bad omen as it indicates a real drop in the number of women in the pipeline for promotion to full directorships. On his recent trip to India, the Prime Minister reiterated his commitment to gender equality and we await some further action, although in his most recent reshuffle he reduced the number of women Cabinet Ministers.

Quotas are opposed often by the very women who, commendably and against the odds, have successfully scaled the heights of corporate life, saying that promotion should only be by merit. That clearly does not apply to men. What appropriate skill sets did the directors of HBOS, RBS, Northern Rock and other failed institutions bring to their boards which led to the crisis of 2008, not just in the UK but across the western world? I recall in a newspaper a montage of photographs of leading bankers together with one of Sir Terry Wogan. The caption asked: “Which one has a professional banking qualification?”. Of course, it turned out to be Sir Terry. Would women have done a worse job than those responsible for causing the 2008 bank failures?

Overemphasis on skill sets is used by the “male, stale and pale” occupants of high places to slow down or avoid increases in the number of women directors. It is a restrictive practice the like of which we have not seen since the demise of the print unions. We know that the banking failures were caused by men whose skill sets were overridden by their addiction to greed, recklessness and megalomania. As Dame Barbara Socking put it in an interview in last Sunday’s Independent on Sunday:

“Equality means having as many mediocre women as there are mediocre men in top jobs”.

She also strongly endorsed the use of quotas.

Strict adherence to the principle of proportionality would make the target for women directors 51%, not 25%. As Dame Barbara implies, women should have the same opportunities to fail in business as men. Why is the hurdle placed so much higher for women than for men?

Even so, there is some evidence that they are less likely to fail. Better gender-balanced boards are more likely to succeed. On 28 April, the Financial Times reported that three women were among the 10 most consistent fund managers over 10 years. Similarly, Credit Suisse has shown that the share price of companies with one or more women board members was higher than those with none, which is a pretty minimal criterion.

Two other recent studies, the first by Alison Wolf, the XX Factor, and The Athena Doctrine by Dr John Gerzema and Michael D’Antonio, both based on extensive empirical data, provide further evidence of the still untapped economic potential of women in senior positions. Closing this gender gap must be a priority.

I have drawn the attention of your Lordships’ House not just to the Norwegian example but to a very successful example of quotas working in the UK. On four occasions, I have cited the success of the quota scheme suggested by the Patten report. That called for such a scheme in the recruitment of new staff to the Police Service of Northern Ireland. As in Norway, the target was reached well before the allotted date. In four previous debates, no Minister, in winding, responded to my specific question to confirm that the scheme had led to great success. After some badgering, a Minister—a woman—belatedly conceded that,

“the quotas applied by the PSNI over a ten-year period had led to a marked increase in the recruitment of women in both communities (Catholic and protestant) ... with figures rising from 12.45% in 2001 to 26.58% in 2011”.

I was much obliged to the noble Baroness, Lady Stowell, for her letter of 22 January.

The main purpose of Patten was to improve the recruitment of Roman Catholics to the PSNI, and that was both highly desirable and, indeed, essential. My point, however, in the context of gender equality, was that an unintended consequence of the blind tests involved in quotas was a dramatic increase in female recruitment.

However, in trying to downplay the significance of quotas with regard to women, the noble Baroness, Lady Stowell, commented in her letter:

“What I cannot confirm, is the extent of the impact of quotas on this rise in the number of women police officers. Apart from the implementation of Lord Patten’s recommendations there were other initiatives that were undertaken which also had a positive effect on female representation such as the Gender Action Plan 2004 and the Gender Action Plan 2008”.

Exactly. Those action plans may well have assisted in achieving Patten, but the quotas were the main driver, and that cannot be gainsaid. In an interesting article, in the Sunday Telegraph, of all unlikely places, Octavius Black argued:

“To change behaviour, the carrot will only get you so far. You may also need the stick … As a first step, the Government should make companies publish a breakdown by gender for different salary bands and make gender balance a condition of all public-sector contracts. In effect, quotas through the back door”.

He rightly added:

“Gender equality at work isn’t a feminist issue. It is an economic one. We all need to lean in”.

Following the publication of the latest Cranfield survey, my right honourable friend the Business Secretary, Dr Vince Cable, warned that the Government will introduce quotas for boards of directors to remedy the gross gender imbalance. Will the Minister in winding confirm that what Dr Cable said is now official coalition government policy and, furthermore, when the 25% commitment will apply to Cabinet membership? Simple questions requiring simple answers.