My right hon. Friend the President of the Board of Trade yesterday urged companies and institutions to achieve higher standards of governance as a matter of best practice. The issue is competitiveness. Good governance is central to the well-run company that works for long-term prosperity in partnership with others. We want companies and institutions to show leadership in delivering best practice. I hope that they will respond positively; if they do not, the Government may have to act.
I thank my hon. Friend for that reply. When considering what should follow, will he bear it in mind that the performance and value of many companies will depend not only on the capital invested in them but—in many cases to the same extent, and in some cases more—on the scientific, technological, design, commercial and managerial abilities of those employed? Such people are the best informed about the nature of the business of many companies. Will my hon. Friend consider, as a move towards a stakeholder economy, that those employees should have the right to representation among the non-executive directors of major British companies?
The position of successful companies and the Government is clear: we want to promote partnership in the workplace. It is certainly true that successful companies must ensure that both executive and non-executive directors have skills and knowledge of the company, of the markets in which it operates, and of research and development and scientific activity. I am sure that successful companies will continue to do that and will expand best practice to ensure that the boardroom reflects the company's needs, in terms of both its internal activities and its activities on behalf of its customers and wider shareholders.
Does the Minister agree with the Royal Society of Arts, which argues in its document, "Tomorrow's Company", that intellectual property is one of the strongest determining factors in achieving competitive success? If so, is not he concerned about the lack of protection of intellectual property rights? What action are the Government taking to promote those rights in the global marketplace?
That was a nice try to introduce the issue of international competitiveness on this question. The Government make efforts daily, weekly and monthly to ensure that scientists and others in the United Kingdom who want to take new inventions to the marketplace are protected, both nationally and internationally.
Is my hon. Friend aware that institutional investors such as insurance companies and pension funds have neither the expertise nor the inclination to become closely involved in the companies in which they invest? That being so, should not they be encouraged to become more closely involved in the appointment of non-executive directors, the promotion of the more meaningful role of annual general meetings, and the remuneration of directors?
The issue of amending the Companies Act 1989 to introduce two-tier boards has been raised, but at the moment there is no demand for that. The Hampel committee found overwhelming support for the unitary boards that are the norm in the United Kingdom. A wider review of company legislation is taking place, and I have no doubt that in that review the Government will consider a range of measures and eventually reach some conclusions. The most important fact about the review is that it is the first wide, fundamental review of company law for almost 150 years; at the end of it we will produce a set of modern legislative proposals that will ensure competitiveness into the next century.
I warmly welcome the U-turn by the President of the Board of Trade on corporate governance and I agree with her that changes should be achieved by leadership rather than by a stakeholder law. I trust that her hon. Friends are as happy as I am that she has dumped the Prime Minister's stakeholder proposals. The question is simple: given that the spirit behind the President's proposals is to lead by example, and because it is impossible to be President of the Board of Trade and to have a blind trust, will she—in the Minister's view—wind up her blind trust and tell us who has contributed to it since May?
Perhaps the right hon. Gentleman should tell the House whether he had the permission of the Leader of the Opposition before putting that question. There has been no U-turn in the Government's policy on companies. The only thing to be dumped is the Tories, who have been dumped by small, medium and big business. The right hon. Gentleman is a complete joke, nationally and internationally, when it comes to business, and his book is a sign of the shambolic nature of his view of British industry. He owes the House and British business an apology for the comments that he made about President Kohl, a man who leads a country that invests millions of pounds in the British economy, creating tens of thousands of jobs. The right hon. Gentleman owes an apology for his extreme right-wing views to those German companies and the workers who work for them in this country.
The Minister obviously did not read or hear my views, which were not as he described and which have received 205 letters and messages of support. The question remains for the Minister and the President of the Board of Trade: will she wind up her blind trust? The Minister should apologise for the remarks that he has just made, because my interviews were unexceptional and well received.
I am just coming to that. In his evidence to the Neill committee, the Leader of the Opposition said of blind trusts:
We believe there is an argument in favour of a form of blind trust that should be examined by the committee.
The Labour party has told the Neill committee that blind trusts should not exist and, when the position is considered by the committee, I am certain that no Labour Member will continue to have a blind trust. The right hon. Gentleman is, once again, out of step with the Leader of the Opposition.
I thank my hon. Friend for that question. I do not know whether anyone in Britain—other than perhaps the right hon. Member for Wokingham (Mr. Redwood)—would defend a pay-out of £3 million to a director of a utility selling water to a captive consumer market while failing to meet customer standards and having some of Europe's poorest leakage records. I would not defend that, and I do not know anyone who would.