Paul Uppal
Main Page: Paul Uppal (Conservative - Wolverhampton South West)(12 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Vince Cable
It will be possible for shareholders’ representatives to work out the ratio because of the information that will become available. We suggested that it would not be sensible to make that metric compulsory, because it can be misleading. I have previously described to the House the anomalies that can arise. A company with a large number of low-paid employees would have a big ratio, but a company that has outsourced such employees, which might be less socially responsible, will none the less have a better ratio, for entirely artificial reasons. We do not attach overriding importance to that measure, but the hon. Gentleman is right that it should not simply be a question of saying yes or no. Shareholders must engage with the company should there be a failure to pass a binding vote to produce a more satisfactory outcome. That is a process, not simply an event.
Paul Uppal (Wolverhampton South West) (Con)
I would be grateful if the Secretary of State could elaborate on the concept of long-termism that he has mentioned in a few of his replies. I ran a business for 20 years before I came to the House, and the best decisions I made were long-term ones. Only when we take a long-term view will we tackle mediocre performance head on.
Vince Cable
The hon. Gentleman is absolutely right. The big issue is essentially a cultural question—the evolution of business in the UK over a long period is central. That is why I set up the review under Professor Kay, which was supported by Sir John Rose and others. That will report in July. Some of its proposals—on, for instance, an end to quarterly reporting—will emerge in detail shortly.