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Lord Hunt of Kings Heath: My Lords, the estimate was given because I could not find my note at the time. The figures I have state that there are 120 NHS clinics in the UK and the number has been growing. That has reflected the growing identification of the problem.

Lord Walton of Detchant: My Lords, is the Minister aware of recent reports in scientific literature suggesting that it may in future be possible to grow peanuts lacking the specific allergen that has been the cause of the problem? Does he know of any research that has been carried out on this topic in the UK which may ultimately prevent the condition from occurring at all?

Lord Hunt of Kings Heath: My Lords, I was not aware of that but I would be happy to take the information given by the noble Lord back to the department.

Earl Howe: My Lords, is it more dangerous to eat nuts or beef on the bone?

Lord Hunt of Kings Heath: My Lords, all I can recommend is that the public should follow the advice of the Chief Medical Officer.

Baroness Carnegy of Lour: My Lords, can the Minister remind me in any case whether food labelling is devolved to the Scottish Parliament?

Lord Hunt of Kings Heath: My Lords, that is a good question. I shall ensure that the noble Baroness receives a proper response to it.

11 May 1999 : Column 1083

Executive Pay

2.48 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

    Whether they are considering legislation to deal with excessive pay awards to company chairmen and chief executives.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, the Government have made it clear that they want listed companies to comply with both the spirit and the letter of the Greenbury recommendations on directors' remuneration. The Department of Trade and Industry has invited tenders from external consultants to monitor compliance with Greenbury best practice. The Government will consider further, in the light of the results of that monitoring, whether legislation is necessary to deliver greater accountability, transparency and linkage to performance in this area.

Lord Dormand of Easington: My Lords, in legislating on this matter, does my noble friend agree that the three major reports of Cadbury, Greenbury and Hampel have had little or no effect on the packages being given to chairmen and chief executives, particularly as the recent award to the chief executive of Smithkline Beecham reached the incredible level of £90 million? Does my noble friend accept that those payments are bound to affect trade union attitudes at a time when trade union demands are so reasonable? That could cause the Government considerable difficulty.

Lord Simon of Highbury: My Lords, I am not sure that my noble friend is right in statistical terms that pay has not been in line with performance. That is precisely what we are trying to monitor more carefully in the next step of the programme. As I said, accountability, transparency and the link to performance is what we are trying to achieve in setting out the framework for good governance in general, which has improved since the three reports were published.

First and foremost, it is for the shareholders of Smithkline Beecham to decide whether or not an executive is worth the level of award offered. In my view, based on my 39 years' labouring in my previous company's vineyard, they certainly would not have thought it appropriate.

Lord Marsh: My Lords, will the Minister tell the House whether the studies that are being undertaken--given that the employees concerned produce jobs to a large degree--will include publicly quoted football clubs and people who play football?

Lord Simon of Highbury: My Lords, the studies will examine the results of the top 350 FTSE companies. I am not sure, considering latest results, whether any of the companies quoted have that status any more.

Lord Renton: My Lords, is the Minister aware that many humble shareholders, of whom I happen to be one,

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are appalled by the inflated incomes of some of the fat cats? Is it not a matter which should be dealt with by the business community rather than inflicting legislation upon Parliament?

Lord Simon of Highbury: My Lords, I agree that we want to do all that we can, as a government, with shareholders and their representatives to ensure that reward packages are in line with performance. I agree--if that is the implication of the question--that self-regulation in this instance is better than legislation. That is exactly what we are trying to encourage in promoting the three excellent reports on this matter.

Lord Razzall: My Lords, will the Minister help the House by telling us whether the statement that he made indicates a change of policy? When Mrs. Beckett was the Secretary of State for Trade and Industry she indicated--rather in line with the Question of the noble Lord, Lord Dormand of Easington--that the Government would legislate if there was no improvement in this area. I appreciate that we have now had two more Secretaries of State for Industry, but does the Minister's statement today represent a change from the policy set out by Mrs. Beckett?

Lord Simon of Highbury: My Lords, the statement I made today is entirely consistent with statements made by all three Secretaries of State who have spoken publicly on this matter. As I said in my Answer, we would like to see those issues that were raised in the Greenbury report in relation to accountability and performance-related pay being enacted in terms of the best governance we have available. All three Secretaries of State have made that point and said that we will monitor the situation closely to ensure that improvement is made. We will keep open our options as to whether to promote self-regulation or to regulate if the required results are not available.

Lord Clinton-Davis: My Lords, does my noble friend accept that there is complete consistency because I recognise every word that he uttered today as words that I uttered not so long ago?

Lord Simon of Highbury: My Lords, with one addition: I do not believe that my noble friend was present when we agreed officially to monitor the results coming forward in the annual reports. That step has now been taken to ensure that progress is made.

Lord Mackay of Ardbrecknish: My Lords, does the Minister recall multiple-choice questions from when he was at university? If so, will he help me with this one? Which of the following Labour supporters or sympathisers should I tick as being a fat cat: the football manager who is paid £1.5 million a year plus bonuses; the Goldman Sachs director whose £25 million shares went up to £33 million on the first day of trading; the supermarket director who was paid £36 million in directors' dividends; or none of those?

Lord Simon of Highbury: My Lords, my feeling is that, whatever advice I give to the noble Lord, he will

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find it difficult to tick the appropriate box because he always found multiple choice at elections difficult to manage.

The Earl of Listowel: My Lords, rather than more legislation, will not this Government consider encouraging chief executives to become more involved with voluntary organisations? For example, will the Minister consider giving a reception which would introduce chief executives in commerce to a mentoring scheme for chief executives of voluntary organisations such as the scheme set up by Business in the Community?

Lord Simon of Highbury: My Lords, I am afraid that I missed the first part of the noble Earl's question. If he wants to write to me about whether or not mentoring schemes can be made available to help voluntary organisations, I shall be happy to receive such a letter.

Lord Mackie of Benshie: My Lords, does not the Minister agree that it would be simple to introduce a piece of legislation which said that all awards to executive chairmen and so forth had to be passed by a show of hands at the annual general meeting?

Lord Simon of Highbury: My Lords, I thank the noble Lord for that suggestion. It is clear from statements made by the Secretary of State that one of the options we are considering is an annual formal vote at shareholders' meetings to accept the report of the remuneration committee. It would require either a change in the Stock Exchange listings or at least secondary legislation. As I said, we are still considering the options, but it is a good suggestion.

Lord Marlesford: My Lords, does the Minister agree with the late J. Peter Grace, who used to tell his most highly paid executives, "I have no problem paying you these sums; but just remember you have a problem earning them"?

Lord Simon of Highbury: My Lords, that is excellent advice.

Lord Annan: My Lords, does the Minister agree that in most cases the shareholders are the institutions--and the institutions have no interest in keeping down the remuneration of the chief executives? It is one lot of fat cats supporting another lot of fat cats.

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