Vol. 736 Monday No. 291 23 April 2012 PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT ORDER OF BUSINESS Deaths of Members Questions Finance: Equity Markets Social Tourism Immigration: Eurostar Workers’ Memorial Day House of Lords Reform Statement Business of the House Motion on Standing Orders Canterbury City Council Bill Leeds City Council Bill Nottingham City Council Bill Reading Borough Council Bill Motions to Resolve City of London (Various Powers) Bill [HL] City of Westminster Bill [HL] Transport for London Bill [HL] Motions to Resolve Legal Aid, Sentencing and Punishment of Offenders Bill Commons Reasons and Amendments Grand Committee Health: Pancreatic Cancer Housing: Flats Armed Forces: Personnel Questions for Short Debate Written Statements Written Answers For column numbers see back page £3·50 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. 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BOUND VOLUMES OF DEBATES are issued periodically during the session. Single copies: Commons, £105; Lords, £40. Standing orders will be accepted. THE INDEX to each Bound Volume of House of Commons Debates is published separately at £9·00 and can be supplied to standing order. All prices are inclusive of postage. © Parliamentary Copyright House of Lords 2012, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey, TW9 4DU; email: [email protected] 1541 Deaths of Members[23 APRIL 2012] Finance: Equity Markets 1542 Lord Myners: My Lords, on 3 November in the House of Lords other place, the Leader of the House, the right honourable Sir George Young, said that the Government were Monday, 23 April 2012. considering methods by which shareholders could become 2.30 pm members of board remuneration committees. In this House on 30 January, the noble Baroness said that she Prayers—read by the Lord Bishop of Bath and Wells. would welcome employee representatives on board committees. Do those continue to be the Government’s Deaths of Members positions and, if so, when will we see some action? Announcement Baroness Wilcox: On the Government’s view on shareholder/worker representation on company boards 2.36 pm and committees, we decided not to include such proposals The Lord Speaker (Baroness D’Souza): My Lords, I in the packet of measures for greater transparency. regret to inform the House of the deaths of the noble However, Professor Kay’s independent report will inform Lord, Lord Brett, on 29 March and of the noble Lord, all the Government’s judgments from this point. Lord Ashley of Stoke, on 20 April. On behalf of the House, I extend our deepest condolences to the families Lord Razzall: My Lords, although I totally respect and friends of the noble Lords. the view of the noble Baroness on premature discussion of the Kay report, does she not agree—a point with Finance: Equity Markets which I am sure the previous noble Lord would agree— that if markets are to take a longer-term view of Question investments, the fund management industry needs to change its method of remuneration so that fund managers 2.37 pm are not rewarded by the short-term performance of Asked By Viscount Hanworth the companies in which they invest? To ask Her Majesty’s Government what assessment Baroness Wilcox: My noble friend is right. We are they have made of the findings of the Kay review of looking at how the long-term proposals can be best United Kingdom equity markets and long-term served. Short-termism can be very advantageous, but decision-making; and whether they intend to take it can also be dangerous in the long term, and we are any consequential action. only too delighted to support him in his view. The Parliamentary Under-Secretary of State, Lord Peston: My Lords— Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, the Kay review’s interim report, published in February, presented a discussion on a Lord Naseby: My Lords— wide range of issues highlighted by respondents to the review’s call for evidence. It did not include any firm Baroness Anelay of St Johns: My Lords, the noble conclusions or recommendations. We expect Professor Lord, Lord Peston, will realise that there have already Kay to make the recommendations in his final report been two opening questions from the Labour Benches. in the summer and it would not be appropriate for the It is now only fair that we go to the Conservatives. Government to prejudice Professor Kay’s findings ahead of the final report. Lord Naseby: My Lords, does my noble friend not recognise—I am sure that she does—that in times of Viscount Hanworth: I am surprised by the Minister’s low interest rates investors look for short-term and appraisal of the Kay report. However, will she concede long-term reports, and that they therefore as a whole that the rules of corporate government in the UK are look forward to the report from Professor Kay and in need of drastic revision? Does she not recognise the recognise that very little was done by the previous virtue of restricting the voting rights of shareholders Government to address this issue? who have long-term interests in companies in which they have invested, and is it not clear to her that the Baroness Wilcox: My noble friend puts it extremely advisory role of shareholders on remuneration gives well. Of course short-termism and long-term planning them insufficient powers to constrain the exorbitant go together. These are difficult times. We need to do executive awards that we have seen in recent times? the very best that we can. It is worth remembering that the United Kingdom has a world-leading corporate Baroness Wilcox: My Lords, as the noble Viscount governance and company law regime. The World Bank will know, the review forms a key part of the action rates the United Kingdom as the best place in Europe taken following the department’s A Long-Term Focus and the fifth best in the world for doing business. It is for Corporate Britain: A Call for Evidence, which was vital that the UK continues to be seen as world-leading published in October 2010. We are exploring the issues in corporate governance. of economic short-termism in the UK alongside executive pay and narrative reporting. Of course we are concerned. Lord Peston: I did not give way because I was under We have put forward this independent investigation by the impression that the coalition was still part of the Professor Kay so that the very points that the noble Government. Whatever the state of play is on that side Lord has mentioned will be addressed. of the House, is not the best performing economy in 1543 Finance: Equity Markets[LORDS] Social Tourism 1544 [LORD PESTON] open mind about future tourism strategies. Our current Europe Germany, to take an obvious example? Short- priority is to encourage the potential that tourism termism is frowned upon in Germany, where the gives to help the growth of our economy. shareholders are committed to the firms in which they hold shares in the longer term, as are the workers. We Baroness Rendell of Babergh: My Lords, I thank the advised the Germans immediately after we won the Minister for her Answer. Is she aware that there are Second World War. They ended up rich and we ended more than 2 million families in the United Kingdom— up a comparative economic disaster. Is it not time the about 7 million people—who never enjoy a holiday Government stopped holding back from taking a view and who will probably never have one in their whole on this and actually started, as my noble friend Lord lives? Is she also aware that while social tourism has Myners said, to do something? never had official recognition or been integrated into tourism policy in this country, in the European Union, Baroness Wilcox: I am interested to hear the noble several countries integrate it—notably France and Spain, Lord’s question. In the more than a decade in which but also Portugal, Greece, Germany and Italy. his party was in power, it did absolutely nothing to advance from the position after the Second World War that he quotes. Baroness Rawlings: My Lords, the noble Baroness, Lady Rendell, asked a similar Question in February The Clerk of the Parliaments: Baroness— 2010. I know she is a redoubtable campaigner on social tourism and is patron of the Family Holiday Lord Young of Norwood Green: Either I was too Association.