Second Reading

Part of Companies' Remuneration Reports Bill [HL] – in the House of Lords at 12:03 pm on 24th April 2009.

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Photo of Lord Bradshaw Lord Bradshaw Spokesperson for Transport 12:03 pm, 24th April 2009

My Lords, I endorse what the noble Lord, Lord Puttnam, said about fairness. When I started my working life, I was motivated far more by what I could achieve than by how much I might earn. This situation has drifted. I fairly recently attended a sixth form meeting at a school and I was astounded by someone I spoke to who asked not what the job involved or what he could achieve or contribute but how much he could make. If people at the start of their careers are less interested in what they can give to society than in what they can take from it, then we have come to a pretty awful pass in how we conduct ourselves.

I ask the noble Lord, Lord Gavron, if he is talking about the lowest level of employees or whether he considers the many contract staff and others who work for the company to be within the lowest 10 per cent. Many companies I know are employing people at pretty low wages. It is sometimes difficult to find out what they are paying or whether their employees are employed legally. In fact, many companies that depend on things like cleaning contracts and other service contracts are fishing around the very bottom of the market. What they pay people when they move production or services offshore is perhaps not within the scope of the Bill. However, many companies and company directors have made their large increases by treating those at the bottom very badly indeed.

I will not detain your Lordships for long, but I have an anecdote that the managing director of TNT told me when I was working at a university some years ago. He said that one of the things that motivated him most was that when he drove on the motorway and his company's lorries passed him, he knew that the drivers were the best-paid drivers on the motorway. That reflected not only the fact that he was running a successful company but that the people in the company were participating in it. I know that these things are difficult, but they are extremely important.

On non-executive directors and remuneration committees, I remember a lot of propaganda by an organisation called Pro Neg, which was trying to recruit people to become non-executive directors. One of the golden rules was that you should not be a non-executive director unless you could afford to resign. You had to tell the company when it was stepping over the limits. If a non-executive director is dependent on that company or a closely associated one for money, I am afraid that they fail at the first test.

I wish the Bill well. I am glad that the noble Lord, Lord Gavron, has moved it, and I look forward to the Minister's reply.