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Companies Bill [Lords]

I speak to amendment No. 757 tabled by myself and my hon. Friends the Members for Great Grimsby (Mr. Mitchell) and for Hayes and Harlington (John McDonnell). It does not entirely surprise me that my right hon. Friend the Minister is unable to agree to it, but there is none the less recognition by the official spokespeople for all the main parties that it relates to a serious issue—I look forward with interest to the views of Plaid Cymru. In the past, the type of amendment that I propose would have been dismissed out of hand as something that would better belong to the North Korean ““Down with Imperialism”” day that has been playing on our television screens all afternoon. The matter is much more serious; we live in a society in which the divisions of wealth and power are probably greater than at any time in our history over the last 100 years. There is a proper market in the directing of companies—in corporate control—in which the company’s employees are entitled to have some involvement. It is important to point out that my amendment does not say that directors, contracts and remuneration would have to have the approval of employees, merely that employees should be consulted, which is just about the weakest possible formulation of the proposal. However, the point is undeniable and has indeed not been denied from the Treasury Bench or from the Front Bench of the main Opposition party. The attempt to say that the issue can be dealt with entirely by remuneration committees is completely mistaken. Of course, my hon. Friends and I welcome the fact that there is more active consideration of such issues inside companies. We welcome the strengthening of the power of non-executive directors and the fact that remuneration committees are considering the issues, but the company’s employees, whose employment experience is becoming less secure in today’s flexible labour market, are entitled to have some right to the expression of an opinion about such matters and about the policies that might be involved in the appointment of directors, the extension of their contracts and their remuneration. During our debates on the Bill we may have missed an important moment, when for the first time a representative of British workers was elected to the supervisory board of a German company with a presence in the UK. That is an important moment in the extension of European ways to our wonderfully Anglo-Celtic system—as there is a representative of Plaid Cymru in the Chamber, I shall use that Australian term rather than the words ““Anglo-Saxon””. It reminds us that globalisation is a two-way traffic; there are new practices to learn about all around us. At present, the average annual pension of a director of a quoted company is said to be about £167,000. That is a fabulous figure. In the United States, there is increasing concern about how pension rights and stock options are exercised. In the UK, there has been a dramatic fall in final salary pension schemes for employees in the private sector, but there has been no such fall in final salary pension schemes for directors. Such inequity cannot survive. It will become a matter of public debate and public controversy, and the first and right place for that is within the confines of the company itself. Of course, at present there is no set way for a company to consult its employees, and our amendment does not attempt to specify one. However, that, too, is something a sensible company ought to consider; it should not require the intervention of laws and Governments to force a company to think about how to consult its employees on this or other matters. Perhaps the amendment will serve a purpose by reminding people, in the context of how we take decisions in companies, that companies must have some regard to the issue.