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Lord Clinton-Davis: My Lords, I know that the noble Lord was a politician, but I do not know what exhortations he made, although I heard him from time to time. Of course we have no intention of introducing a statutory regulation on wages. What is important is that we should have an objective and sensible debate on the whole question of corporate governance. It will take place, I am sure, in the foreseeable future.

Baroness Blatch: My Lords, in order to understand what the Government mean by "being paid excessively", does the noble Lord regard that as applying, for example, to the chairman of a public company who is paid £200,000 when over the trading period the company loses, let us say, £12 million and subsequently goes into receivership? Would that prove to the Government, in their assumption about what is fair or unfair, that the director's salary was at the expense of the shareholders and the workforce?

Lord Clinton-Davis: My Lords, what an extraordinary question. It is based on one hypothesis after another--I believe there were four, but I shall check that tomorrow in Hansard. I shall not go into that range of supposition and speculation which engaged the noble Baroness so eloquently.

Lord Razzall: My Lords, is the Minister prepared to indicate in what way, when we see the Green Paper on Hampel and company law reform, the Government will

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reconcile their overall support for the Hampel report, as indicated yesterday, with their determination to legislate for another method as set out in their manifesto?

Lord Clinton-Davis: My Lords, again I indicated that all relevant considerations will be taken into account by my right honourable friend in the assessment of the position. She will make her Statement in the spring. I cannot give a specific date at the present time but I am sure that it will be reconciled with whatever it has to be reconciled with.

Lord Pearson of Rannoch: My Lords, does the Minister accept that the average increase of 13 per cent. for employees is in itself satisfactory when viewed against the rate of inflation for the period? Without going into too many hypotheses, does he accept that a number of employees might not have achieved that satisfactory rate of increase had not their highest paid director received an increase of something of the order of magnitude set out on the Order Paper?

Lord Clinton-Davis: My Lords, it is not easy to follow the correlation in the noble Lord's question. What is important is that there has been a tremendous gulf over the course of many years in the pay of employees and directors. That is a relevant consideration and will be taken into account. I shall not say anything more because I do not want to pre-empt my right honourable friend's assessment of the position.

Lord Monkswell: My Lords, surely there is ample evidence that there is no correlation between excessively high pay and performance. We can take that from the period of the last 18 years of Conservative government when the rich got richer but the country as a whole sank in the league tables of world wealth.

Lord Clinton-Davis: My Lords, there is something in that.

Lord Annan: My Lords, the noble Lord rightly said that the Government have no intention of introducing statutory regulations about increases in directors' pay. However, does he not feel that, when something scandalous has taken place, the time has come for the Government to consider how to express some mark of contempt? I say that because, when the noble Lord, Lord Marsh, says that this is a matter about which the shareholders should express their disapprobation, we all know that in the majority of cases the shareholders are the institutions, who are bandits in the same game.

Lord Clinton-Davis: My Lords, there is something in that too.

Lord Gisborough: My Lords, does not the Minister feel that the remuneration of the legal profession and other professions should be taken into account along with that of directors?

Lord Clinton-Davis: My Lords, I had a vested interest in that matter. When we are reflecting on pay

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we should reflect generally in relation not only to directors but also to the professions. The professions operate in a different way from public and private limited companies; they are partnerships. However, their remuneration reflects generally upon the situation as perceived by the public. The noble Lord is right that it is a factor to be taken into account.

Fisheries: Quotas

3.24 p.m.

Lord Campbell of Croy asked Her Majesty's Government:

    What progress has been made, since the exchange of letters between the United Kingdom Government and the European Union Commission last June, in removing the anomaly of foreign fishing boats registered at British ports being allowed to catch fish within the quotas allocated to the United Kingdom.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Lord Donoughue): My Lords, a consultation paper was issued to the industry in July containing proposals for ensuring that all British registered fishing vessels maintain a real economic link with those populations in the United Kingdom dependent upon fisheries and related industries. Those proposals have since been the subject of extensive discussions with all sectors of the fishing industry. Those discussions have been completed and the Commission's views are now being sought on our proposals. Once those views are known, an announcement will be made on the way forward.

Lord Campbell of Croy: My Lords, I am grateful to the Minister for that reply. It is now seven months since the Government stated that they would introduce conditions for new fishing licences "with all speed", to use the Prime Minister's words. How fast does the noble Lord consider the process that he described as a disincentive to quota hopping, which was stated to be the objective, is going? Is there any assurance that the European Court will not again rule that that is illegal, as it did in the case of the register in the Merchant Shipping Act?

Lord Donoughue: My Lords, it has taken a few months, but we stated at the beginning that we would consult fully with the industry. We were criticised for consulting too quickly on beef bones; on this matter we consulted fully. With his knowledge, the noble Lord is aware that our fishing industry is diverse in its interests and even conflicting. It therefore took time to consult and reconcile the position. The position is now with the Commission. When we reach an agreed view with the Commission, we shall announce our plans and hope that that will be quite soon.

Our action is based upon a suggestion from the European president, who is the guardian of the European treaty. It is being finalised with the European Commission on the basis that it will be compatible with European law. We are therefore reasonably confident

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that we have done everything possible to make sure that it will not be overturned, as the noble Lord fears, by the European Court.

Lord Mackie of Benshie: My Lords, does not the Minister agree that the trouble was caused by fishermen selling their quotas overseas? That happened because there was no decent decommissioning scheme, and to obtain proper value the fishermen had to do that. Do the Government now intend to introduce a much more generous and widely embracing decommissioning scheme which will solve the problem?

Lord Donoughue: My Lords, I agree with the noble Lord. Many of our problems derive from what one might call the negligent or careless handling of fishing policy a decade ago. I agree also that decommissioning must be at the heart of any future solution to our problem. We have spent money on that and, in the light of the current spending review, are considering what funds will be available.

Lord Pearson of Rannoch: My Lords, can the Minister inform the House whether the eventual decision from Brussels as to whether it agrees with the Prime Minister's view of the matter will depend on the dreaded qualified majority vote? If so, can he give the House any indication as to how those votes stack up at the moment?

Lord Donoughue: My Lords, that is a view that is being considered by the European Commission. When we obtain its response, that will be the policy. I cannot speculate on what will happen with majority votes, but that is not a relevant factor.

Lord Stoddart of Swindon: My Lords, can I press my noble friend on that? Although the Commission may take the view that the British Government have a case, is it not the case also that any such agreement will have to be agreed by all the other member states, including Spain? If that is so, does he believe that Spain will agree to the alteration which suits them so well, in that it gives them virtually a free hand to fish exactly as they wish in British waters?

Lord Donoughue: My Lords, when we have an agreement with the Commission, that will be the agreement. I should point out to my noble friend that other member states--for instance, Belgium and France--are already implementing similar regulations.

Lord Mackay of Ardbrecknish: My Lords, will the Minister accept that the triumphant exchange of letters--"Dear Tony" and "Dear Jacques"--last June was supposed to herald the end of this problem? It is now seven months since that exchange and nothing has happened. The discussions with the Scottish Fishermen's Federation took place last August. It is coming up to five months since those discussions were completed. When are the Government going to do something about this--or am I right in thinking and

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being suspicious about the fact that the solution is not half as easy as "Dear Tony" and "Dear Jacques" supposed?

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