Mr. Alun Michael (Cardiff, South and Penarth): On a point of order, Madam Speaker. Are you aware that this morning the Home Secretary joined the Lord President of the Council, the Secretary of State for Health, the Secretary of State for Education, the Paymaster General for Foreign and Commonwealth Affairs and the Under-Secretary of State to launch a Green Paper on drugs? I can appreciate the embarrassment that this has caused the Home Secretary, because the document appears to accept the need for a comprehensive strategy to tackle drugs and drug-related crime--a strategy which he rejected during proceedings on the Criminal Justice Bill.
Would it not be appropriate for a statement on such an important issue to be made in this Chamber, so that we can test the document and question whether there has been a genuine change of heart by the Government? Is this not a discourtesy to the House, and a further example of the sort of behaviour by Ministers that you have deprecated in the past?
Madam Speaker: Does it relate to the same point of order? [Hon. Members: "No."] As the House knows, I am always keen for any important statements of policy made by the Government to be made to this House first. I have seen the document, which is of a consultative nature, as I am sure the hon. Gentleman understands. It is, of course, up to the Minister concerned to decide for himself whether he wishes to make a statement to the House or to use some other method.
I do, however, understand hon. Members' keenness to question question Ministers on this subject. I hope that it will not be too long before the issue comes before the House in such a form that we can all consider it and hear answers to some of the questions that hon. Members are seeking to ask.
Mr. John McAllion (Dundee, East): On a point of order, Madam Speaker. Yesterday, the Home Secretary announced an additional £2 billion expenditure on anti-crime closed circuit television schemes for England and Wales. Today, I repeatedly contacted the office of the Secretary of State for Scotland asking whether he intended to make an equivalent statement for Scotland--only to be told that no one there knows what the position is.
Have you, Madam Speaker, been approached by the Secretary of State for Scotland to be told that he intends to make such a statement to the House about Scotland? If not, is it within the rules of this unitary Parliament that Ministers should be allowed to announce anti-crime schemes, paid for by taxpayers' money, for one part of the United Kingdom but not for another?
Madam Speaker: I have not been informed by any Minister that he seeks to make a statement, but my recollection is that Thursday follows Wednesday, and that Thursday is the day when the Leader of the House
Column 278announces the business. The hon. Gentleman may be lucky then, although I do not promise that he will catch my eye.
Mr. David Winnick (Walsall, North): On a point of order, Madam Speaker. Article 9 of the Bill of Rights protects the right of this House to regulate its own proceedings, including the conduct of its members. There are all sorts of historical reasons for that, and no one is likely to dispute the fact that we, not the courts, should do this. It is also most important for the reputation of Parliament that, in regulating our own procedures and the conduct of Members, everything should be seen to be above board, and that there should be as little secrecy as possible.
The point I want to raise with you, Madam Speaker, is as follows: if a Committee has been duly appointed by the House, as it has been, to look into the conduct of two hon. Members, are we in a position to tell the Committee that we are dissatisfied with its sitting in private, and that we believe that it should sit in public for most of the hearings?
Obviously, when it comes to discuss its conclusions, it must do so in private--no one disputes that--but I for one, and many of my hon. Friends, are deeply disappointed that the Committee of Privileges has decided to sit only in private. Are we therefore in a position to tell that Committee that we believe that most of its proceedings should be public?
Madam Speaker: There has been no official report yet to the House; what I have seen has been from the media. As the hon. Gentleman and the House know, all our Committees, including the Privileges Committee, regulate their own affairs. They must be left to resolve the matter. The hon. Gentleman must not look to me as a court of appeal. We have established very important working Committees in the House, and they must be left to conduct their own affairs in carrying out the task with which they have been entrusted by the House.
Mr. Tony Banks (Newham, North-West): May I draw your attention, Madam Speaker, to written question 222 on today's Order Paper? The hon. Member for Dorset, South (Mr. Bruce) asked the Secretary of State for Education if she will make a statement about Stratford grant-maintained school. That school is in my constituency, and there is a lot of controversy surrounding it. Would it not be courteous for the reply to the question to be given to the constituency Member concerned, rather than his having to wait until it is printed in the Official Report ? It is matter of courtesy, upon which you could advise Ministers.
Madam Speaker: I often have to remind Ministers and Back Benchers that there should be a high degree of courtesy in the way in which we deal with each other in the House. I have always thought that, if an hon. Member tables a question that relates to another Member's constituency, that Member should be informed. I hope that what the hon. Gentleman has said has been heard by the Minister, and perhaps he will be sent the typescript answer to the question. We now must move on to the ten-minute Bill.
That leave be given to bring in a Bill to fix the emoluments of chairpersons, chief executives and senior managers of private limited companies and public bodies so that their combined annual earnings do not exceed twenty times the average take-home pay of their non-managerial employees save if the said employees agree through a ballot of their non- managerial employees or through their union to permit salaries of their chairpersons, chief executives and senior managers to exceed a 20:1 ratio.
Before explaining why I think the Bill is worthy of serious consideration, let me clear the ground of three misconceptions that have arisen so far in public discussion of it.
First, it is not aimed at entrepreneurs, the geniuses who invent a new product or service and create companies that make them millionaires. I admire Richard Branson and Anita Roddick. Ms Roddick pays herself £138,000 a year, so she would not be affected by my Bill. I welcome the tall poppies in our business field, and wish that there were many more of them.
Secondly, it is not directly aimed at the scandalous pay-offs to company directors, privatised utility pay-offs, Ministers serving on boards of companies or, indeed, the corruption that The Sunday Times exposed in 10 Downing street in the 1980s.
Finally, my Bill does not proposes a compulsory wage set at any given upper limit. I see a glint in your eye, Madam Speaker, as the boss of all Members of Parliament, at the thought of earning 20 times our meagre salary.
My Bill does not propose to set cash limits, as the Chancellor does with his public pay policy; it represents an effort to a start a national debate about how we pay ourselves as a nation for the work we do and the wealth we create.
The pay that our top executives have been awarding themselves has lost all touch with rationality and the market.
I shall take as an example my constituency of Rotherham. The starting salary for a cashier at Barclays bank there is £7,000 a year; the chief executive of Barclays earns 100 times that amount. At the Rank Hovis plant in Rotherham, the base rate for an operative is £164 a week. Greg Hutchings, the CEO of Tomkins, which owns Rank Hovis, earns £1.2 million a year--145 times that amount. The pay of the chief executive of British Steel is 33 times the pay of a Rotherham steel worker.
Some people may say that, if we do not pay those rates, our top managers will disappear to work abroad; but nowhere in Europe do similar pay ratios exist. The head of Thyssen, Germany's biggest steel firm and a much bigger company than British Steel, earns only 16 times the pay of a German steel worker--half the United Kingdom ratio.
Other people will say that those large salaries are justified because many people are employed and big sales are generated. Yet the chief executive of Volkswagen, Europe's biggest car company, which employs 250,000 workers and makes sales of $80 billion a year, is paid 25 per cent. less than the pay last year of the chief executive
Column 280of British Aerospace, a company with one third the number of employees and one third the magnitude of sales.
If we examine the new growth areas of the dynamic Asian economies, the comparison is even more grotesque. There are eight top managers in Japan with salaries of more than £650,000 a year, compared with the 90 that I have identified in the UK. The earnings ratio between a top executive and an engineering worker in Japan is between eight and 12 to one--compare that with GEC, where Lord Weinstock earns more than 33 times the average male earnings in industry.
That sense of teamwork, that lack of a big gap between top and average pay, is perhaps the reason why Japanese companies have been so much more successful than ours in recent years.
The noble Lord Hanson was quoted recently as saying:
"The labourer is worthy of his hire: but no more than that." I agree with him, because that corporate greed reflects the last great closed shop in the British economic system--the company boardroom. There, men--it nearly always is men--executive and non-executive directors, meet in private, pushing their snouts deeper and ever deeper into the trough: this Government of sleaze with their boardrooms of greed.
In addition to the low-paid in my constituency, two categories of people are being diddled by that deliberate widening of the wealth gap. The first group consists of shareholders. It may be odd for a Labour Member to defend shareholders, but they have their right to a place in the sun. According to a survey carried out by CM Financial Analysis, nearly one third of top UK companies have given their directors pay rises that outstrip the rate of return to shareholders in the past three years.
The second group that is being diddled consists of middle managers, skilled workers and directors of small and medium-sized companies, who are significantly underpaid in comparison to their European counterparts as a price of the overpayment of top bosses. What is needed, and what in part my Bill proposes, is to empower shareholders and all employees, so that they have a genuine say in the firm. If trade union reform was the issue of the 1970s, company boardroom reform is the issue of the 1990s. We need to return companies to their shareholders and their employees if we are to reverse the economic decline of the past 15 years.
With the accession--as many Members will know--of the new member states of the European Union, Britain has sunk to 11th place in the per capita GDP rankings in Europe. We have the widest wealth gap of any European or dynamic Asian economy. My proposal is based not on the politics of envy, but on the comparative economics of efficiency. Company executives have conflated salaries, performance pay and stock options in a way that disconnects them from their workers and shareholders.
An English writer, a Member of the House but not a Labour Member, wrote 130 years ago of our country being divided
"into two nations between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts and feelings as if they were dwellers in different zones or inhabitants of different planets."
Once again, we live in a divided nation. The vast majority of members of the Cabinet represent constituencies within commuting distance of London-- an
Column 281M25 Administration who know nothing of, and have no sympathy for, the north and other regions. The greed of some top executives has transferred them to another planet.
My Bill is a modest attempt to bring those people back to earth, to return companies to their employees and their shareholders. But it has a deeper purpose. It is an attempt to reduce the wealth and pay gap, which has grown alarmingly wide. It is an effort to help make again one nation in which all may play a part, and all may have a share.
Question put and agreed to.
Bill ordered to be brought in by Mr. Denis MacShane, Mr. Ken Purchase, Ms Margaret Hodge, Mr. Barry Sheerman, Mr. Peter Hardy, Mr. Gerry Sutcliffe, Ms Glenda Jackson, Mr. Nick Ainger, Ms Angela Eagle, Ms Diane Abbott, Ms Dawn Primarolo and Mr. Gerald Bermingham.
Mr. Denis MacShane accordingly presented a Bill to fix the emoluments of chairpersons, chief executives and senior managers of private limited companies and public bodies so that their combined annual earnings do not exceed twenty times the average take-home pay of their non-managerial employees save if the said employees agree through a ballot of their non- managerial employees or through their union to permit salaries of their chairpersons, chief executives and senior managers to exceed a 20:1 ratio: And the same was read the First time; and ordered to be read a Second time upon Friday 2l October, and to be printed. [Bill 163.]
Mr. Michael Shersby (Uxbridge): On a point of order, Madam Speaker. The hon. Member for Rotherham (Mr. MacShane) referred in his speech introducing his Maximum Wage Bill to "this Government of sleaze". Similar comments were made during the previous remarks of the hon. Member for Blyth Valley (Mr. Campbell). Is it in order for Members of Parliament constantly to use that expression? To talk of a "Government of sleaze" is not only bad for the House of Commons, but I question whether it is in accordance with parliamentary convention and the best principles of the House.
Madam Speaker: It is in order to criticise Governments in that general way, but it is certainly not in order to criticise individual Members. However, I am pleased that the hon. Gentleman has raised the matter with me. I remind the House of the wise words of "Erskine May":
"Good temper and moderation are the characteristics of parliamentary language."
We might all remember that at all times, however high our tempers might rise on occasions.
Lords amendments considered.
Lords amendment: No 1, in page 2, line 16, at beginning insert ("Subject to subsection (2A) below")
Mr. Howard: Part I of the Bill provides for, among other things, a new custodial sentence for persistent young offenders--the secure training order. The order may last for between six months and two years, the first half of which would be spent in a secure training centre and the second half of which would be spent under supervision in the community.
Throughout the passage of the Bill, the Government have made it clear that the new secure training centres will be different from anything tried before. They will be centres housing a specific category of persistent offender, and the regime will be tailor-made for them so as to provide the right kind of training and care within a secure environment.
Lords amendment No. 2 and its consequential amendments would allow the courts, when making a secure training order, to choose between local authority secure accommodation and a secure training centre for the custodial part of the order.
Lords amendment No. 4 and its consequential amendments would allow the local authority, when detaining a juvenile subject to a secure training order, to apply to the court for the remaining period of detention to be replaced by a period in other non-secure local authority accommodation, or a period of supervision or a period of detention in a secure training centre.
Amendment No. 4 would also allow the director of a secure training centre to apply to the court for the remaining period of detention to be spent in local authority secure accommodation or other accommodation, or for a period of supervision.
The proposals for the new centres were carefully designed to address the problem of persistent young offenders. The amendments would undermine our ability to respond specifically to that serious problem and would make the operation of the new provisions haphazard, inefficient and much less effective.
Ms Hilary Armstrong (Durham, North-West): I intervene because it is proposed to locate one of the new centres in my constituency. How long would it take to implement the Home Secretary's proposals, and how long to implement those in the amendments?
Column 283The amendments are based on the assumption that local authority secure accommodation would be used instead of secure training centres. I remind the hon. Lady of the attitude of Labour local authorities in her part of the country. At a meeting with directors of social services in the north-east on 19 February 1993, it was agreed that firm proposals to provide the additional 12 secure places assessed as being required would be brought forward by the end of April 1993.
By the end of July 1994--15 months later--no commitment had been forthcoming from those Labour-controlled authorities. At that point, the Department of Health had to make the decision to transfer the resources elsewhere. I trust that the hon. Lady regrets getting to her feet to ask that question.
Mr. Howard: It is obvious from my remarks that I can give no indication when local authority secure accommodation would be available, because Labour-controlled local authorities, including those in north-east England, have not presented proposals, despite giving firm undertakings to do so. That is a complete answer to the hon. Lady's question.
In accepting the amendments, much was made in the other place of the alleged flexibility that they would bring to the secure training order. Although that argument has superficial attractions, it does not stand any scrutiny. Secure training centres, in their design and their regime, will be tailored to a specific type of offender of a relatively narrow age range. Only in such a dedicated institution will it be possible to provide the specialised regime needed to tackle the behaviour of that group and the range of educational and training programmes that will meet their individual needs. In contrast, local authority secure accommodation cannot provide that focused regime. That accommodation caters for a variety of difficult and disturbed juveniles in a wide age range. Some are serious offenders, others are on remand, and many are not offenders at all. With such a group to cater for, local authority units cannot provide the concentrated, specialised regime that is the aim behind secure training centres.
Mr. John Greenway (Ryedale): Does my right hon. and learned Friend agree that, for any 12 to 14-year-old to be made subject to a secure training order, it is almost certain that he would already have been the subject of a supervision order? In fact, that is a requirement of the legislation. That would have meant that he would have been in local authority secure accommodation. That would still be available to the court, even with the secure training order--so why do we need this provision?
Mr. Howard: My hon. Friend is entirely right when he says that the Bill requires, as a condition of eligibility for the secure training order, that someone should have been subject to a supervision order--and, indeed, had failed to comply with its requirements. So the logic of the situation is that attempts would have been made to improve the
Column 284behaviour of offenders in that category, without obliging them to be detained in secure accommodation, but that those attempts would have failed.
Mr. John Sykes (Scarborough): Is my right hon. and learned Friend aware that householders in Scarborough are fed up with the activities taking place at the Stepney road children's home, which range from mindless vandalism and theft to arson? Is he further aware that the county council social services department has shown itself utterly incapable of controlling that establishment? Quite apart from the fact that that establishment should be closed down now, does not that case show the importance of my right hon. and learned Friend's amendment?
Mr. Howard: My hon. Friend will forgive me if I do not comment on the particular example he cites, because I do not have any detailed knowledge of it, but the general point made by him shows that, once again, he is the authentic voice of North Yorkshire. He speaks for his constituents and represents their views, in marked contrast, on these matters particularly, to those who contribute to the debates from the Opposition benches.
Dame Jill Knight (Birmingham, Edgbaston): May I assure my hon. Friend the Member for Scarborough (Mr. Sykes) that that area of North Yorkshire, vital though it is, is not the only area in Britain that is gravely concerned about the misdemeanours of young people who are not properly controlled in local authority homes? I have one such home in my constituency, about which I have battled for at least two years, and all the residents have a long list of problems. In the latest incident, a young girl was let out at half past two in the morning; she was involved in a car accident and lost a leg. But no child of that age should be able to roam around outside a home at that hour while in the care of the local authority.
Mr. Howard: I have great sympathy with the views of my hon. Friend. Indeed, there are many examples in Birmingham of the large number of offences that have been committed by a very small group of persistent young offenders, for whom the sentence is particularly designed.
Mr. Gunnell: Should not the Home Secretary make it absolutely clear that there is a distinction between the local authority homes, which have just been mentioned, and local authority secure accommodation? Will he acknowledge that Leeds has secure accommodation for 27 children, and that there are plans for its expansion, as he knows? Does he agree that no person has ever got out of that home? Indeed, the Minister of State commented in Committee on the very good standards there. Will he not draw a distinction between children's homes and secure accommodation?
Column 285secure accommodation is not appropriate for the group of persistent young offenders for whom the secure training order is particularly designed.
The secure training order will be a sentence of the court. It is Parliament's responsibility to ensure that the effect of any sentence is consistent for all cases. If the amendments are accepted, the secure training order could be served in a wide range of institutions, with varying regimes. Many of the local authority secure units are very small, with places for as few as eight or 12 young people. Persistent offenders will simply not get the training they need if they are dotted around the country in twos and threes in such units. In contrast, if all secure training orders are served in secure training centres, the courts will have confidence in the regime involved, as it will be underpinned by statutory rules and set out in the contracts with the individual operators.
Mr. Michael Stephen (Shoreham): My right hon. and learned Friend makes a very important point. It is a question not only of locking youngsters away, but of giving them proper education while they are there. Is he confident that, if the Lords amendment were allowed to stand, the children would receive adequate education tailored to their particular needs?
Mr. Howard: Not only am I not confident that that would happen were the amendments to remain in place, but one of my principal points of opposition to them is that it would be almost impossible to provide the high calibre regime of education and training for those young offenders that it is our intention to provide in secure training centres.
An additional difficulty with the amendments is that they provide the courts with no guidance on which cases should go to secure training centres and which to local authority accommodation. It would be impossible to predict how the courts would use the power to choose between secure training centres and local authority accommodation, or what portions of sentences would be served in custody. It would be necessary to provide accommodation in both centrally provided secure training centres and local authority accommodation, but the proportions would be unforeseeable and there would be a huge element of risk of either under or over-provision in either case.
As a result, the measures would be rendered unnecessarily expensive and wasteful of resources. Further pressure would also be placed on the local authority stock of secure accommodation, which, even with the planned expansion to take account of other measures in the Bill, will be insufficient to meet the increased demand created by the need to accommodate juveniles subject to the secure training order.
Mr. A. J. Beith (Berwick-upon-Tweed): Is the Home Secretary really saying that he needs to provide guaranteed numbers in order to get the private sector to provide training centres? Is that not the real motive for resisting the Lords amendment, which would not stop the
Column 286setting up of training centres, but might introduce some doubt about whether they would secure the numbers they would require to be economically viable?
Mr. Howard: I have just dealt with that point. As I said, the uncertainty that would arise if the amendments were allowed to stand would mean that the measures would be rendered unnecessarily expensive and wasteful of resources. We know that the Liberal Democrats do not give a fig for resources or for expense, and that there is no responsibility in their attitude to these matters; Governments, however, must approach them rather differently. Beyond the practical issues in the amendments are important points of principle that concern the Government. As I said a moment ago, the secure training order is a custodial sentence, subject to the Criminal Justice Act 1991: in other words, the length of the sentence should reflect primarily the seriousness of the offence, which is a decision for the court at the point of sentencing.
To allow the courts, in effect, to adjust the length of the custodial part of the sentence at a later date--presumably on account of some change in behaviour or circumstances--would be at odds with that principle. Indeed, it is extremely doubtful whether the courts would welcome such detailed involvement with the future treatment of a young offender after the point of sentencing.
There may be very rare cases in which a juvenile serving the secure part of the secure training order clearly needs to be moved to other accommodation- -when he or she develops a mental or physical illness, or when there are grave concerns about his or her ability to cope with the regime.
That is partly why the Bill already contains, in clause 2(4), a power for the Secretary of State to transfer an offender
"where the circumstances of the case require".
It is not intended to use the power routinely, but it provides an avenue to allow the moving of juveniles in exceptional cases, and goes some way towards meeting the aim of the amendments.
The Opposition parties have scaled new heights of double dealing during proceedings on the Bill. Both parties abstained on Third Reading, to avoid the public opprobrium that they richly deserved; yet in debates on the detail of the proposals, they have sought to wreck those proposals at every turn.
The official Opposition, in particular, voted against giving courts the power to lock up persistent young offenders--young people who, as my hon. Friend the Member for Ryedale (Mr. Greenway) pointed out, have been given every possible chance to reform and have refused it. The public must be protected from them, and the Conservative party would provide that protection; the Opposition would leave the courts with no power whatever to act. By their actions on this part of the Bill,
Column 287the Opposition stand condemned as totally out of touch with public feeling, and we shall make sure that the public never forget it.