I am sorry that the hon. Member for Wirral, South (Mr. Porter) is no longer in his place because he mentioned greed and envy. I find it interesting that every time we discuss this matter, Conservative Members use those words. That says rather a lot about them and their view of remuneration and not quite so much about Opposition Members.
The hon. Member for Wirral, South failed to recall that one person who has prosecuted the case for a more equitable means of controlling share options is Mr. Alistair Ross Goobey, chief executive of POSTEL, who is not known for his radical views or support of Labour Members as he was previously a special adviser to a Chancellor of the Exchequer.
Indeed, I am interested in several points made by Conservative Members about share options because they merely highlight the point that the Member for Wirral, South made: we are debating a divided society, a them-and-us society, and most people in the advanced world who are concerned about the operation of industry in the public and private sectors are very much aware of the need to reduce the them-and-us divide.
It is extremely difficult to convince people, in this week of all weeks, when they are about to have the 20th increase in taxation since the Government were elected, that those who control the privatised utilities should be treated more favourably by the tax system than those who actually work in those industries and the rest of us, who will face increased taxation from 6 April.
It beggars belief that Conservative Members can be so naive as not to see the inequities in the system. New clause 1, which I support, gives us a minor opportunity to consider in some detail the difficulties that have arisen as a result of discretionary share options in privatised utilities.
A debate is being held in this country about the effectiveness of share options. The same debate is taking place in the United States, where there is concern in the private sector about the use of stock options to allow remuneration of senior managers in a way that is not directly affected by the performance of the industries in which they are employed.
The debate is meaningful because there is considerable evidence to show that granting share options does not so much affect the performance of an industry as the performance of its share price. The share price and the performance of an industry are in many cases not directly related. Indeed, when the time comes for the publication of annual accounts, it is possible through creative accounting to make the operation of a business look much better than it has in fact been.
I would be much more convinced of the rectitude of those who argue for share option schemes if they were also prepared to build disincentives into the remuneration structure. When a company's share price increases, senior executives benefit. If there is a reduction in the share price or performance of that company, why should not those who run the company be disadvantaged? We should be in a position where true targets are set for businesses in place of the rather bizarre structure of share options that we have at the moment.
It is only in this country, the United States and France that such tax-attractive schemes tend to be introduced for senior executives. Most other countries recognise the true value of building a structure where employers and employees share together in the destiny of a company and are motivated by the destiny of that company, whether it be in the public or private sector.