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5.59 pm
Mr. Jim Dowd (Lewisham, West): Thank you, Mr. Deputy Speaker. I speak somewhat earlier than I had expected, after the Minister's sparkling introduction.
The orders are the result of the periodic review of election expenses and, as has been stated, could hardly be more straightforward, particularly the Northern Ireland one. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) pointed out, they are the product of an almost automatic process, and are before us this evening to ensure that they have effect in time for the electoral festivities, which are but a few weeks away.
The Northern Ireland order merely repeats exactly the provision for the rest of the United Kingdom according to the different procedure. I did have a couple of questions, assuming that a Minister with responsibility for Northern Ireland might be here. Although one is not, I shall read them anyway, and perhaps the Minister could arrange for the responses to be sent on.
Mr. Sackville
indicated assent.
Mr. Dowd:
I see the Minister nodding. I am grateful for that.
The questions relate to giving some indication of when and how the other remaining regulations relevant to elections in Northern Ireland--the Representation of the People Act (Amendment) Regulations and the Northern Ireland Local Elections (Amendment) Regulations--will be processed. If I could have that information, I should be grateful.
Despite the slight lapse into hyperbole by my hon. Friend the Member for Huddersfield (Mr. Sheerman), I am sure that the Huddersfield Labour party is an
excellent fighting machine. It is certainly a consistently successful one, as his presence here this evening and over many years representing Huddersfield testifies, but he strikes at some pertinent points. The limitations for expenses are a fiction, because they control nothing but individual candidate expenses.
To some degree, the whole legislative framework under which we operate our elections, both parliamentary and local, fails to recognise anything other than candidates. It fails to recognise the existence even of political parties and the machinery they have, whether they are genuine political parties or the inventions of rich individuals.
Although the order calculates in considerable detail the theoretical maxima allowed to be spent by individual candidates at the general election, the whole world knows that they give little indication of the amounts that will actually be spent, particularly during a general election. Taking the 362 county constituencies and the 297 borough constituencies in the UK at the time of the next election, and an average electorate of about 67,000, as my hon. Friend the Member for Newcastle upon Tyne, North (Mr. Henderson) said, that would imply maximum expenditure of £5.5 million in total, if a party were to contest every seat in the UK, and I do not think that that is entirely probable.
However, it is authoritatively reported that Sir James Goldsmith, the well-known grocer who has been mentioned, plans to spend some £20 million on his Europhobic adventure at the general election. In addition, today we have read reports, again alluded to already--I will not elaborate on them, lest I incur your wrath, Mr. Deputy Speaker--of £40 million from a variety of highly dubious sources being deployed by the Conservative party in a frenzied last-ditch effort to buy an election that it richly deserves to lose.
Only one small part of that money will appear on official returns to returning officers--although it is a failed effort, anyway--but, as my hon. Friend the Member for Newcastle upon Tyne, North has already stated, the whole issue of party funding is a source of continuing scandal and shame to the Tory party. Our action to date in refusing donations from overseas nationals and in
revealing the source of all donations of more than £5,000, together with our commitment to review the regulations governing the funding of political parties, stands in marked contrast to the Tory party's disreputable conduct in this matter, where we have also witnessed the questionable use of official overseas visits, paid for by taxpayers, to raise money for the Conservative party.
Mr. Sheerman:
Did my hon. Friend read the reports in the McAlpine memoirs this morning that the Prime Minister himself played an active role in that fund-raising activity?
Mr. Dowd:
I did indeed, as did many other people. The revelations by the former treasurer of the Conservative party--this is not just some minion at central office, but the person who was responsible for spearheading the fund-raising campaign--add to the shame and scandal that attach to the Conservative party. It is grossly out of touch with public sentiment. The public want more openness, transparency and honesty in relation to the funding of political parties and where those funds come from.
We cannot oppose the orders. They are self-evidently sensible. As I have said, I have great sympathy with the point of the hon. Member for Roxburgh and Berwickshire about whether this is the best use of parliamentary time, given that all we are doing is taking the last orders and multiplying the figures by the retail prices index. The House can be confident that, if the British people give us the opportunity in a few weeks' time to form the Government, the Labour party will take the whole question of party political funding far more seriously than the Government ever have.
Question put and agreed to.
Resolved,
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor):
I beg to move,
The Government believe that a statutory disclosure requirement continues to be necessary for all companies to safeguard the interests of shareholders. The purpose of the regulations is to bring the schedule 6 requirements into line with best practice in this sector, as set out in the recommendations of the study group on directors' remuneration chaired by Sir Richard Greenbury.
Hon. Members will recall that the Greenbury study group was asked to make recommendations on the determination and disclosure of directors' remuneration and to prepare a code of practice for use by the United Kingdom's larger listed companies. When the report was published in July 1995, it was welcomed by the Government as a very helpful contribution towards improving the accountability of directors to their shareholders. We particularly welcomed the report's emphasis on aligning the interests of directors and shareholders by linking pay to performance.
The Greenbury report focused on listed companies and its main recommendations were aimed at listed companies, investor institutions and the London stock exchange. Its key recommendation on disclosure of directors' remuneration was that a report should be sent to shareholders each year explaining the company's approach to executive remuneration and providing full disclosure of all elements in the remuneration of individual directors. The London stock exchange incorporated that recommendation into its listing rules in December 1995.
The Greenbury report also made two specific recommendations to the Government on disclosure of directors' remuneration: that the Government should remove from companies that make full disclosure of their directors' remuneration the obligation to show it in £5,000 bands and that the Government should review the present requirements for disclosure of information on directors' pensions. The regulations implement both recommendations. They also meet the commitment given to the House by my right hon. Friend the President of the Board of Trade that the provisions in the Companies Act relating to disclosure of directors' remuneration would be amended so that they were consistent with the listing rules.
The regulations lay down a basic disclosure rule, which is set at a level appropriate for unlisted companies, leaving it to the listing rules to require more detailed disclosures by listed companies. For example, the regulations require disclosure of aggregate emoluments and those of the highest-paid director, whereas the listing rules require disclosure of the remuneration of each director.
The Government accept that it would not be appropriate for unlisted companies, whose shares are not publicly traded, to be subject to the very detailed disclosure recommended for listed companies by the Greenbury report. This applies particularly to very small companies, where frequently all the shareholders are also directors of the company; indeed, the regulations propose a specific exemption from many of the disclosure requirements for such companies.
I deal now with the details of the new disclosure requirements in the regulations. The first substantive regulation covers the aggregate emoluments of directors. The new provisions retain the present requirement on all companies to show the aggregate amount of directors' remuneration, but they follow the Greenbury recommendations by requiring companies to provide information on each element of directors' remuneration.
Companies are therefore required to disclose figures on basic pay, annual bonuses, share options, long-term incentive schemes and company contributions to money purchase pension schemes. This will provide more useful information to readers of company accounts by allowing them to see how companies structure their directors' remuneration packages, but should not mean extra work for companies since the individual figures are needed to compile the overall total.
That the draft Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1997, which was laid before this House on 11th February, be approved.
Resolved,
That the draft Local Elections (Variations of Limits of Candidates' Election Expenses) (Northern Ireland) Order 1997, which was laid before this House on 12th February, be approved.--[Mr. Sackville.]
3 Mar 1997 : Column 665
6.5 pm
That the draft Company Accounts (Disclosure of Directors' Emoluments) Regulations 1997, which were laid before this House on 6th February, be approved.
The Companies Act 1985 requires all companies registered in Great Britain to provide information on directors' remuneration in the notes to their annual accounts. The information that companies are required to provide is set out in schedule 6 to the Act. The purpose of the disclosure is to permit shareholders and other users of the accounts to satisfy themselves that the directors, in setting their remuneration, are acting reasonably.
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