Clause 53 - Links between directors' pay and

Water Bill [Lords] – in a Public Bill Committee at 11:00 am on 16 October 2003.

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Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to take amendment No. 89, in

clause 53, page 67, leave out lines 37 to 43.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

We are galloping along this morning, which should warm the cockles of the Minister's heart. [Interruption.] Apparently he has warm cockles, but he may be the only one.

The purpose of the amendments is to withdraw large chunks of the Bill that deal with remuneration and standards of performance. Again, I want clarification from the Government. I want to know why certain chunks have been included in the Bill. The text states:

''(a) whether or not there are in force in respect of the financial year during which the statement is made arrangements falling within subsection (3) above; or

(b) if not, whether the company intends that such arrangements will be in force at some time during the financial year''.

I find that slightly muddling. I hope that the Minister can clarify what is going on.

Photo of Norman Baker Norman Baker Liberal Democrat, Lewes 11:15, 16 October 2003

I must part company with the Conservative spokesman on this point. We appear to have a fat cats' charter: an attempt to let people be paid what they want and to cover it up by removing freedom of information provisions in the clause. I can only think that the amendment was drafted by the Institute of Directors, because it certainly was not drafted by consumers. The hon. Member for Leominster is a jolly good chap. I can only assume that he did not understand his amendment when he tabled it.

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

The amendments relate to the duty to publish links between directors' pay and standards of performance that clause 53 places on the undertakers.

They would remove the duty to include in statements the arrangements that are planned for the current financial year. The hon. Member for Lewes made that point.

The amendments would mean that the statement would be retrospective. That goes against the concepts of openness and transparency, and would considerably reduce the value of the statement. We have been talking about holding companies to account, being open and transparent, and making information available. I am not clear that the amendment progresses those objectives because it restricts the information by making it retrospective. Following that explanation, I hope that the hon. Gentleman will withdraw his amendment.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I am grateful to the hon. Member for Lewes for his compliment, but he should have stopped there instead of putting the boot in later.

This was a clarifying amendment. I am not sure that I agree with the hon. Gentleman about the fat cats' charter. We must ensure that there is a proper incentive for all workers in the sector to work as hard as they can, and that they are remunerated properly. The probing amendments sought to do that. Sometimes we go too far in the interests of transparency, and that was what I was probing. The Government have not done a great deal to change my mind, but I do not wish to press the amendment at this stage. If necessary, we can always bring it back on Report. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I beg to move amendment No. 90, in

clause 53, page 68, line 6, leave out from 'it' to end of line 8.

The amendment relates to the provision that states that the statement

''may be published by the Authority in such manner as it may consider appropriate.''

That is not the right sort of freedom to allow. If the Bill specifies that the authority must publish a statement, we should at least guide the authority about the way in which to do that. I know that the Minister will say that the authority could publish the statement on its website, but I hope that we will be a little more prescriptive, or remove the provision and not be prescriptive at all. We should be one or the other.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

I respect what the hon. Member for Leominster has been trying to do, but he goes too far in this case. How can transparency be taken too far? I just do not accept that as a principle. The information is vital. Consumers pay their water bills—we want them to do that, of course—and therefore there must be a sense of trust and an exchange of information between the consumer and the water company. One of the central parts of that must be that when I pay my water bill I know what remuneration the director is getting compared with their standards of performance during that year. In Wales, we can do that in a slightly different way because Glas Cymru is a different sort of water company.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I think that we have moved on from that debate. We are now discussing amendment No. 90, which concerns publication of the authority's statements. I am sure that the hon. Gentleman is making helpful points, but he may find that it is too late, although it is not for me to decide that.

Photo of Mr Simon Thomas Mr Simon Thomas Plaid Cymru, Ceredigion

My understanding of amendment No. 90 is that the hon. Gentleman is absolutely right.—[Laughter.]

Photo of Elliot Morley Elliot Morley Minister of State (Environment and Agri-Environment), Department for Environment, Food and Rural Affairs

That is a first for the day.

There is a general issue about transparency. Amendment No. 90 relates to the duty to publish information about links between directors' pay and standards of performance. The intention is to go a little further than the hon. Gentleman is assuming in the publication and availability of that information. It is also the intention to publish statements so that it is easy to compare the arrangements with the performance of each company. The amendment would make it much more difficult for shareholders and customers to hold companies to account, because they would have to approach each company separately to collect the necessary information. The purpose of the provision is to make it easy to compare the information and have it available, and to provide the authority with the flexibility to do that.

Photo of Bill Wiggin Bill Wiggin Shadow Minister (Environment, Food and Rural Affairs)

I am grateful to the Minister and to the hon. Member for Ceredigion (Mr. Thomas), and for the interventions. I hope that the hon. Member for Workington (Tony Cunningham) will ensure that his Minister has a good lunch so that when he returns this afternoon he is in a more charitable mood. I know that the Minister is generally a better bloke than he has been this morning. That apart, I am more than willing to show my charitable side by withdrawing my amendment, because I have no wish to prevent information from being published. However, the provision is not as clear as other parts of the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 53 ordered to stand part of the Bill