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Baroness Symons of Vernham Dean: Yes, my Lords, I believe that there is and that we can give them reassurance. I assure the noble Baroness that the decision on those closures was not taken lightly; it has been thought through. Kiribati will continue to receive the €11 million attributed to it from the ninth European Development Fund, of which the United Kingdom supplies nearly 13 per cent.

Last year saw community projects on protection of children's rights, for example, books and teaching aids and a radio equipment upgrade. There was also a BBC project. There is no reason why similar projects should not happen again next year. It is not about trying to cut those projects; it is about the savings that accrue from shutting the deputy high commission, not the money in the way that the noble Baroness suggested.

Baroness Hooper: My Lords, does the Minister not agree that because of the distances involved—there are some 3,000 miles between Christmas Island, to the north of the island group of Kiribati, and Tarawa, the capital—it will be almost impossible to cover the whole area adequately without a locally placed individual? Does she not also agree that the current deputy high commissioner and his wife, who are based in Tarawa, have been doing a first-class job and will be sorely missed?

Baroness Symons of Vernham Dean: My Lords, I am sure that the individuals will be sorely missed. As I said to the noble Baroness, Lady Gadrner of Parkes, a moment ago, the decision has been taken after a great deal of thought. Our high commissioner in Suva, in Fiji, is already accredited to Kiribati. When the deputy high commissioner departs, we plan to reinforce the staff at Suva to ensure that we maintain the United Kingdom's links with the Government of Kiribati. The high commissioner and his staff will make regular visits to Tarawa and will continue engaging at the same level with the government of Kiribati.

Lord Wright of Richmond: My Lords, will the noble Baroness confirm that the deputy high commission in Kiribati, like most missions, as I understand it, has had available a heads of mission fund, for which it is not
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necessary to bid to the Foreign Office, as it is money available for small projects at the discretion of the high commissioner or deputy high commissioner? Will the high commission in Suva still be able to draw on similar funds on behalf of Kiribati?

Baroness Symons of Vernham Dean: My Lords, that is a rather different question. It involves DfID funding for small projects. A number of our embassies are finding that that money has been realigned. That is going on throughout the Foreign Office, and that question is not strictly related to what is going on in Kiribati. It is an issue for our high commissioners and our embassies in general.

Lord Wallace of Saltaire: My Lords, we all recognise that it is difficult for the British Government to continue to fund missions in all 190 other member states of the United Nations. Have the Government taken a position on proposals for a European Union action service that could maintain collective missions in some of the smaller countries in which there is, in combination, sufficient European interest, even if there is not sufficient individual interest to justify a resident mission from any one EU member state?

Baroness Symons of Vernham Dean: My Lords, I know that the noble Lord is fond of reminding your Lordships that that is an important issue. It is important in several areas, but I do not believe that it is under active consideration at the moment with regard to the countries in the south Pacific.

I regret to say that I mentioned the BBC a moment ago in relation to a project in Kiribati. I am afraid that I misread part of my brief: there is no specific BBC project there. I misread something about the books fund.

Lord Blaker: My Lords, I declare an interest, in that I was responsible for organising the independence of Kiribati in 1979. Trying to cover Kiribati and the other islands from Fiji is no substitute for having a British deputy high commissioner in place. My noble friend mentioned the immense distances between the different parts of the islands. That is true of some of the other islands as well.

Can the noble Baroness reassure me about the economy of Kiribati? Has the proposal pushed in 1979 to license fishing fleets from other countries in the Pacific been successful?

Baroness Symons of Vernham Dean: My Lords, I am afraid that I cannot answer the specific point on the fishing fleet. However, I shall write to the noble Lord about it.

We have been talking about Kiribati—a collection of islands—as though that collection of islands were closely packed. The fact is that it is not. I understand the points that noble Lords make about the distances, but I say to the noble Lord and to the noble Baronesses, Lady Hooper and Lady Gardner of Parkes, that the distances that will be covered from Fiji are not hugely different from the current position in terms of the planes that might be used to cover those journeys.
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It is a difficult question, but ultimately we must decide the strategic priorities for expenditure in the Foreign Office. There are hard questions to answer, and we are facing up to them.

Directors' Remuneration

2.53 p.m.

Lord Smith of Clifton asked Her Majesty's Government:

Lord Davies of Oldham: My Lords, the Deloitte report demonstrates the effectiveness of the Government's action in subjecting directors' remuneration to closer scrutiny by shareholders. As a result, the Government do not believe that further legislation in the area is necessary at this stage. However, there remains no room for complacency. The challenge for remuneration committees is to develop packages that effectively link remuneration to the creation of long-term value for shareholders.

Lord Smith of Clifton: My Lords, I thank the Minister for that Answer. I am sure that he will recognise—if I can borrow his favourite verb—that it is a rather shallow report. In the attempt to sample investors' opinion, only 24 institutional shareholders—the major ones—were sampled. No attention was paid to individual shareholders or smaller investors, perhaps because the DTI's specification did not include it. Why did it not include it? It is perhaps because it was meant to be a cheap piece of work.

The report reveals that there are poor criteria bearing on the relationship between success and remuneration. Many studies have shown that there is no correlation between performance and reward—indeed, in some cases, there is a negative one. Will the Government take up that vexed question in the near future?

Lord Davies of Oldham: My Lords, I note that the noble Lord is critical of the report, but the report has given rise to regulations that are working effectively. All British companies, whatever their size, are complying with the regulations effectively, meaning that there is greater transparency and that we have a better system for ensuring that companies are open about their annual reports than any other country in the advanced world. That is why the Government recognise that some minor improvements to the regulations might be effected. That is why we are open to consultation on that. But the main thrust of the report has been translated into regulations that are proving effective.

Lord Barnett: My Lords, does my noble friend agree that what the institutional shareholders said in response to Deloitte indicated that, although they did
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not want any more regulations, they wanted additions and extensions to existing regulations, to let shareholders, including small shareholders, know just how obscene are some of the salaries paid to some directors of companies that are actually making losses?

Lord Davies of Oldham: My Lords, the regulations have meant that the 350 major FTSE companies have given their reports in all openness to shareholders. It is for shareholders to make their judgment on the information provided.

I recognise what my noble friend says: there are areas in which we could make some improvement. However, the broad thrust of the regulations means that, if shareholders wish it, a vote is taken at the shareholder meeting about remuneration packages. We insist on and receive full disclosure about that. As I said, our company regulation is an example to the developed world.

Lord Marsh: My Lords, I have a cri de coeur to make on this subject—about which the Government seem almost as enthusiastic as they were about fox hunting. Does the Minister not believe that it is the easiest thing in the world to tell shareholders that, if they do not like what is happening in their company, it is a simple thing to sell those shares and buy some in a company that they like? Nowadays, most companies of any size publish the range of salaries.

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