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Earl Attlee: My Lords, does the Minister intend to grant biomass power stations extra development time

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under future NFFO rounds in order to allow the first harvest to coincide with the power plant coming on-line?

Lord Clinton-Davis: My Lords, I believe that that matter will be dealt with under the review to which I have just alluded.

Directors' Remuneration: Disclosure

2.47 p.m.

Lord McCarthy asked Her Majesty's Government:

    What steps have been taken to implement Recommendations 3.8, 3.9 and 3.10 of the Greenbury Report on directors' remuneration.

Lord Clinton-Davis: My Lords, action has been taken to implement the recommendations made to the Government by the Greenbury Committee. In particular, Schedule 6 to the Companies Act 1985 has been amended so that the legal requirements relating to the disclosure of directors' emoluments are consistent with the disclosure provisions in the Greenbury code of best practice and the Stock Exchange listing rules.

Lord McCarthy: My Lords, I thank my noble friend for that Answer. If I understood him correctly, he seemed to be saying that all three of Greenbury's recommendations have been implemented by successive governments. That prompts one to ask, "What about the 30-odd recommendations of the Greenbury Committee and other similar bodies which were directed at British industry?" Do the Government have any evidence of whether British industry has implemented the other recommendations?

Lord Clinton-Davis: My Lords, our information is that generally the recommendations are being applied. If my noble friend wishes to refer any specific cases to me, I hope that he will do so.

Baroness Miller of Hendon: My Lords, is the Minister aware of the recent flotation of Computacenter, following which 30 managers who helped their company to grow by taking shares and share options in lieu of salary increases became paper millionaires while about 700 other members of staff received shares with an average value of £314,000? Does the Minister regard those people as stakeholders or as fat cats whose loyalty to their companies will single them out for disadvantageous tax treatment?

Lord Clinton-Davis: My Lords, I do not know whether they are fat cats, or whatever. The fact is that they were advantaged by what happened. The Government's case in relation to all this is whether the advantage gained by share options or increased pay and remuneration is related to performance. Even if it is related to performance, is it excessive in all the circumstances having regard to the interests of the

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company concerned, its workforce and so on? Those are the essential criteria that we seek to apply in line with both Greenbury and the subsequent report.

Baroness Miller of Hendon: My Lords, can the Minister inform the House whether he regards these individuals as stakeholders because their work benefited the company and they took shares or share options? Their value depended upon the work that they put into the company. Are they stakeholders or just fat cats?

Lord Clinton-Davis: My Lords, the noble Baroness can have her choice. I shall not go into the specifics of a particular company. I do not believe that that advances the argument other than when applying the criteria to which I have just alluded. It does not help to describe them in any way whatever. I should like to know more about the company, as indeed should the noble Baroness before embarking on this line of questioning.

Lord Dormand of Easington: My Lords, does my noble friend support the recommendation of both the Greenbury and Hampel committees that the reports of remuneration committees be voted upon each year by shareholders? Can my noble friend inform the House when the government paper on company law, whether white or green--perhaps my noble friend can clarify that--is to be published? Is there not now a compelling case for its early publication?

Lord Clinton-Davis: My Lords, the Government have just issued a Green Paper on the governance of companies. This matter is to be looked at. Representations will be made to the Government. We shall consider the position very carefully in due course. I regret that I have forgotten my noble friend's question.

Lord Dormand of Easington: My Lords, I asked whether the Government's paper was a Green or White Paper. I hear my noble friend say that it is to be a Green Paper. I am informed that it is the first question that he has forgotten. Do the Government support the recommendation of both the Greenbury and Hampel committees that reports of remuneration committees be voted upon each year by shareholders?

Lord Clinton-Davis: My Lords, those recommendations have been noted and there is a great deal of force in them. The Government are considering these matters. The Government prefer this aspect of governance to be dealt with on a voluntary basis rather than by enshrining it in legislation. I refer back to the somewhat confusing situation, for which I am entirely responsible. It was not a Green Paper; it was a consultation document.

Lord Razzall: My Lords, does the noble Lord agree that the real problem that prompts this continuing debate, as the Minister indicated in his last answer, is that despite the fact that over a year has elapsed since the election and the publication of the Labour Party manifesto, the Government still have not made up their mind whether they wish these matters to be dealt with

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voluntarily by the Stock Exchange implementing its listing particulars or by the more restrictive legislation enshrined in the manifesto?

Lord Clinton-Davis: My Lords, I have already stated that the Government prefer the matter to be dealt with by way of the application of a voluntary code that is adhered to, not one to which people merely pay lip service, rather than go down the more restrictive route of legislation. We have made that very clear in this House and in the other place on a number of occasions.

Lord Monkswell: My Lords, bearing in mind that the minimum wage will be determined on the basis of a rate per hour, can the Minister inform the House whether the Government have any intention of ensuring that directors' remuneration should also be reported on the basis of a rate per hour?

Lord Clinton-Davis: My Lords, I shall not be led down the byways of the national minimum wage because that matter will be debated at Committee stage and perhaps in the course of a Statement to be made in the very near future. I do not believe that it is helpful to judge the matter in the way that my noble friend suggests. I have already set out what I believe to be the critical criteria which essentially are based on performance. That does not excuse totally excessive remuneration which has sometimes been the case.

Lord Chesham: My Lords, can the noble Lord expand slightly on his last answer? Who is to determine what is excessive? Is it the Minister?

Lord Clinton-Davis: My Lords, certainly it is not a matter for me. I have no responsibility within the department to do that. Mine is a collective responsibility. I do not decide this matter. We believe that the performance criteria should be judged by the companies themselves in the first place, applying objective standards which measure up to them. I believe that that is the right way to proceed. Companies know instinctively whether what they are doing is in their interests, the interests of the nation as a whole and their workforce. All these matters must be taken into account.

Lord McCarthy: My Lords, do the Government agree that the aim of Cadbury, Greenbury and other committees was to try to arrest and control the ever-higher levels of bonuses and salaries and fiddles of various kinds being paid out to top executives? As the Minister accepts, we still do not have any information as to whether the recommendations have been carried out and whether the trend has been reversed. All the signs are that the trend is getting worse year by year.

Lord Clinton-Davis: My Lords, I do not accept the last assertion. These matters deeply concern the Government, the CBI and others in seeking to apply

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fairness. This matter is kept very firmly under review. I am perfectly happy to return to the House in due course and report on the matter when the Government have had reasonable time to make a proper assessment.

Baroness Blatch: My Lords, can the Minister explain why he and his colleagues in the department are so exercised about the top salaries of business people who after all create economic activity and jobs when, for example, Geri Spice, who left the Spice Girls yesterday, is reputed to have earned £10 million in the past two years?

Lord Clinton-Davis: My Lords, I think that she has enough problems without my adding to them!

Prisons: Strategy for Tackling Drug Misuse

2.57 p.m.

Lord Harris of Greenwich asked Her Majesty's Government:

    What action they propose to take on drugs following the report of the Chief Inspector of Prisons on HM Prison Featherstone.

Lord Hoyle: My Lords, the Prison Service published its new strategy Tackling Drugs in Prison on 12th May. The strategy has been informed by a full review, including independent research. The strategy builds on a record of success in reducing drug misuse in prison in recent years. It will maintain an appropriate balance between control measures and treatment and rehabilitation and will enable access to voluntary testing for all prisoners who request this.


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