20/06/2012 House of Commons

welcome here in the United Kingdom whatever their Government is doing

The Secretary of State for business, I know that members are going out

of the chamber quickly and quietly. Mr Speaker, I welcome the

opportunity to set out the government's proposals for

directors' pay. This follows an extensive consultation with

business and the investment community. Since I first address

the House on this issue, the government has initiated a broad

national debate about shareholder activism. It has encouraged

shareholders to become more engaged, as owners of their companies during

the so-called shareholder spring. We have also seen companies

engaging constructively in the face of opposition. This is an important

step for encouraging improved pay and discipline. As I said then,

there's evidence of a disconnect between pay and performance in

large UK listed companies, and it is right that the government acts

to address this market failure. Today I can therefore announced a

far-reaching package of reforms that will strengthen the hands of

shareholders to challenge excessive pay while not imposing unnecessary

regulatory burdens. We will give shareholders new powers to hold

companies to account on the structure and the level of pay, and

make it easier to understand what directors are earning and how this

links to the strategy and performance. So, shareholders will

have a bounding vote on pay policy, including their approach to exit

payments. Rather than being or a one-off vote, for the first time

they will have a long-lasting control on pay. A company will only

be able to make payments within the limits that have been improved by a

majority of shareholders. This vote will happen annually unless

companies choose to leave their policy unchanged, in which case it

would happen a minimum of every three years. This will encourage

companies to stick to a long-term pay strategy. It will put a brake

on the annual upward pay movement. The policy should explain clearly

how pay supports the strategic objectives of the company, and

include better information how directors' pay relates to that of

the wider workforce. Increased transparency on employee pay,

including information which would show the difference between rises

in directors' pay and that of their employees. Indeed, employee views

on pay are important, and that is why I propose the company's report

on whether they have taken steps to seek the views of their workforce.

As part of their policy, companies will have to spell out their

approach to exit payments. When a director leagues, the company must

publish a statement explaining exactly what payments the director

has received. Companies will not be able to pay more than the shell out

-- shareholders agree. Alongside the binding vote on pay, there will,

as now, be an annual advisory vote on how the policy has been

implemented, including all remuneration paid in the previous

year. And if a company fails the vote, this will automatically

trigger a binding vote on policy the following year. Both the

binding and the Advisory vote should be as strong as possible to

keep up pressure on companies. I therefore welcome the CBI's call

for the Government's code to be updated to codify best practice.

Companies make a statement when a minority of shareholders vote

against a pay resolution. Bass -- this will hold directors to account.

Companies will have to report a single figure, the total paid

directors receive for the year. They will publish details of

whether they met performance measures. The government is going

to bring forward amendments to the enterprise and regulatory Reform

Bill shortly to introduce these measures.

In tandem, and as a good policy- making requirement, we will publish

for comment revised, simplify regulations setting out what

companies must report on directors' pay. Lasting reform is dependent on

both business and investors maintaining activism and developing

and adopting good practice. The best companies are already leading

the way and acting as early adopters of these reforms. We

welcome the close engagement of institutional shareholders and

their willingness to use their voting powers. We want this to be

sustained and we shall continue to monitor disclosure levels. Evidence

suggests that more institutional investors are disclosing their

voting records and that up to three-quarters of these investors

are now disclosing their votes. We consider further action if the

number of investors volunteering to disclose their voting records does

not continue to increase. In summary, this is a strong package

of reform. It builds on the UK status as a global leader in

corporate governance. It commands wide support from investors and

business. It addresses public concerns about directors' pay.

These proposals restore a stronger, clearer link between pay and

performance. They reduce rewards for failure. They promote better

engagement between companies and shareholders. Overall, they allow

companies to be held to account. We look forward to discussing these

proposals further with the Select Committee on 28th June. Thank you,

Mr Deputy Speaker. I thank the Secretary of State for

site of his statement today. In the last decade, the value of FTSE 300

and could become BA's increased by 80% of the average total earnings

increased by 108 %. This is by chip exhibitors. Many of these awards

are not linked to success of performance. -- disease by chief

One has to go back to 1979 to find things more in proportion, with

executive pay growing by 0.8 % on average. It is imperative that we

all do what we can to address this problem. In government, quite

rightly, we did not rush to legislation. It was right to see if

it could be avoided. When it became clear this was not the case, in

2002 be made it mandatory for companies to publish a directors'

remuneration report, and we give shareholders the right to vote on

remuneration. As the Secretary of State said, the shareholders have

been exercising those rights, to their credit, with some further

this year. Reform must be led by them. The Secretary of State

outline some proposals to assist them. I will can be measures to

increase transparency, but I have a number of consent and questions in

relation to other things he mentioned. First, with regard to

the Annual binding vote on future remuneration policy, I have heard

what the Secretary of State has said, but it is disappointing that

having marched us all up to the hill, he appears to be marching us

back down again by performing a U- turn on his original proposal.

Having proposed an annual vote, he now seeks one every three years

unless during that three years there is a change to the policy. Is

it not the case that this will simply incentive five boards to

draft policy as broadly as possible to avoid anything other than a

three-year vote? Can he tell us how he would define a change to

remuneration policy, and he will be the arbiter in each particular

company as to whether a change has Bureaucracy has been raised as an

objection to an annual vote, but I am not sure this cold water. With

regard to the majority required for the policy to be approved, I think

the Government should have been bolder and gone for a 75% threshold

rather than a simple majority for approval. The chief investment

officer of Fidelity worldwide investor said it would give

companies a clear mandate and the need for a clear majority would

also encourage shareholders to express their views. Why does he

not listen to this? He says employees use on pay are important.

If that is the case, why does the Secretary of State continued

persistence standing in the way of introducing a requirement for

employee representatives to sit on board remuneration committees. Can

the Secretary of State clarify, when he says it will automatically

trigger a vote on binding policy the the year -- the following year,

if the vote fills, what does he propose in the following year? The

backward Ford, or the Ford photon future policy? Finally, I also

welcome the CBI's call for the it CIC code to be updated. But would

he consider requiring DEFRA seed to carry out an annual report to keep

good pay and remuneration to be on the agenda? -- the FRC. I would

like to thank the honourable gentleman for the comments. I think

it is worth recalling that in the 13 years of Labour government,

there were seven secretaries of state who occupied my job, eight if

we include Lord Mandelson twice. In the seven years that followed the

introduction of an advisory board, none of my predecessors dotted

necessary to introduce a binding vote on pay, despite the fact that

there was a continuing trend for top pay to diverge... If it were a

good idea to combine with the Lords, why did none of my predecessors do

anything about it? Most of them were nominated by trade unions, one

of them was a distinguished general secretary of a trade union. None of

them taking the action to implement the measure he demanded. But I do

welcome employee participation. And as I said, I will expect a report

back from companies on whether or not they have consulted their

employees on pay. Secondly, on the annual vote, there will be an

annual vote of policy changes, he seems to find a problem with the

fact that if nothing changes, it will have begun over a three-year

period. The system encourages companies to think long-term. As I

understand it, he has copied my example in setting up a report on

long-termism. We want companies to think long-term. Should they choose

to do the three-year process, it will put a stop to the ratcheting

of annual pay awards. A three-year system would be a considerable an

improvement. Should there be changes in policy, it will take

place annually, which I have indicated from the outset. I also

believe that in the case of the advisory votes, which will take

place, and the Reporting Council will have a statement to the

markets, I personally think it would be desirable to have a 75%

vote to the threshold. But the Financial Reporting Council is an

independent body, but having a higher threshold in that case would

be desirable. He specifically asks what the Financial Reporting

Council are doing in order to strengthen the overall corporate

governance, they are pursuing investigating a variety of issues.

How companies should formally respond with this it -- if a

significant minority oppose a pay vote. There are also other big

issues, and subject to their recommendations we will have

considerable improvements in the system of corporate governance. In

conclusion, these are very radical changes. I thought it would have

enhanced the reputation of the honourable gentleman if he was

Grace's -- gracious enough to acknowledge when a major set of

reforms has been undertaken. Banks have taken excessive risks for

which we have all played. Treasury Select Committee is now

investigating mad, and has heard extensive evidence that senior bank

executives have been rewarded excessively for taking those risks.

In these proposals, what specifically addresses the problem

of systemic risk in the financial institutions? As he knows, there is

a separate set of regulations introduced by the Financial

Services Authority that deals with the link between the types of pay

packages that are introduced and systemic risk, excessive bonuses,

which has had that effect in the past, and learning from the

experience of the financial crash. Companies will be governed by these

new regulations, and I would imagine that the shareholders of

the leading banks will want to make sure that forward-looking pay

policies take proper account of the systemic risk of their introduce

and. -- of their institution. Can I welcome the minister's statement.

Could I just problem and some of the comments he has made about

institutional investors and their disclosure levels? Currently, only

15% of asset management companies actually revealed their voting

behaviour at company shareholders AGMs. Can he tell me, in the light

and context of the statement, will he consider introducing legislation

to ensure that becomes 100%? already indicated that we are

looking at disclosure levels. There is a very worrying trend, and a big

vote is through the insurance companies. There is a trend towards

disclosure, and I have said we will have cut further measures if this

does not go through that kind of trajectory. Can I very much welcome

these proposals. The three-year Bind and pay policy will help to

constrain the constant upward spiral that we have seen in

directors'' pay in recent years. It has been suggested that the three-

year pay policy agreement may turn out to be deflationary, as growth

in the economy and hopefully the company -- the company improves.

Would he welcome that? That is one of the points that they made when

we discussed it with them. The three-year policy would be helpful

in deflating top pay, and she is right to point out that the problem

we are dealing with is an upward spiral in which pay is unrelated to

performance and in which top executives are simply trying to get

into the top quartile, which they cannot be. Is the singing a

different song from the one he used to sing from the seats -- from the

seat, when used to talk about business on both sides, the trade

unions and bosses. The truth is not the truth, he has come here with a

set of proposals that may have been OK some time ago, but has been tied

by the Tories in the coalition, and he has even got rattled at Question

Time having being asked a decent question by this pleasant shadow

business secretary! I know the honourable gentleman is

indeed very pleasant, but I do not think his questions were very good!

As for my performance when I used to sit there, I did welcome

Patricia Hewitt's changes seven years before the end of the Labour

government. But it was taken as quite a week package, and what

happens to be built on those proposals substantially. Peter Bone.

The Secretary of State's proposals are unnecessary, and should the

Secretary of State not concentrate on his day job? A company has

waited indefinitely for an export licence in my constituency. Should

we have more action? There is only a very small part of British

exports but are covered by the licensing regime. The cover issues

of national security, and we have to be careful with how we deal with

that. Can I welcome much of what the business Secretary has said

today? The proof will be in the pudding in practice. What

difference will this make to the so-called erectors, the vermin of

private-equity world critical for Boots the Chemist five years ago,

and have sold it off to the Americans? How much money have the

screwed out of this, and would he make an announcement about that

today? This deals with public companies not Private Equity.

welcome my right honourable friend taking a decent approach on

directors'' pay, with business and investors. Does he believe that

more power were to shareholders will allow people to participate in

companies and meetings and get involved and buy company shares?

This is surely what we all want, more people, more shareholders and

more the involvement. That is correct. I congratulate the

shareholders who have become actively engaged for the first time

in many years in issues of pay and policy. One of the reasons they

have been active as they know that -- the new this legislation was

coming. The Secretary of State was right to castigate previous

governments and their complacency. Top pay has not a practical issue

it is also a moral issue. But isn't it time that we had a Top Pay

Commission which would begin to look at how we begin the process of

dismantling the obscenely high levels of pay for the top pay when

the poor are getting poorer? I have seen the work of the existing topic

Commission, which made very good suggestions, many of which we have

taken on board. If the community were to come together, to look at

topee, I would take great interest in what they suggest. A welcome the

announcement today, especially after a decade of runaway executive

pay. But would he agree with me that it is imperative that board

members understand that what is done has to be in the interest of

the employees, stakeholders and shareholders, but above all else,

the long-term sustainability and well-being of the business

operating through ethical means? Yes, she is absolutely right, and

that is what the code is all about. It goes hand-in-hand with other

initiatives we are taking to ensure that companies operate on a long-

term basis. British business has been undermined for far too long by

short-term decision-making, and we are trying to move it in the

opposite direction. I broadly welcome the proposals by the

government, but on a more practical issue, for example of some company

was to default on not implement this legislation, what penalties

There is a set of rules already. If companies fail to observe the vote,

they will be making an unauthorised payment. There are considerable

liabilities for companies that do that.

I welcome this statement. The Secretary of State is right to

tackle and the rewards for failure. The worst example is that of

Enterprise Inns, who severed a nineties is 0.6 % decline in share

values over five years. -- who suffered a 96.6 decline. And yet

the chief executive rewarded himself �850,000 in bonuses. Our

shareholders part of the answer but only part of it? There are

thousands of businesses being damaged. When he pledged to uphold

the will of Parliament and announced a review in this issue? -

I know that my predecessor was responsible for publishing

extensive debates with the honourable gentleman about the

enterprise in and that model. In relation to the figures today, they

are striking. I can't understand why if there's been such a

divergence between pay, maybe the shareholders would have been more

active. I thank the Secretary of State for

this statement and agree when he says reports will be clearer and

more transparent for investors. Is he not concerned about a potential

unintended consequences that business investors will see this

burden as a key factor requirement for any business they seek to

invest in? Is the concern there may be too much involved, if that has

become the case, for smaller businesses?

That is a correct statement. It is part of the balance we are trying

to strike. We went shareholders to be actively involved. In order to

be actively involved, they need to know what is going on. They need

information. That has some regulatory impact. I acknowledge

that. We are trying to strike the balance. I think we have.

I think the Minister is right to identify the deep public distaste,

not just for rewards of failure but General rewards for those who are

not in a meaningful way risk-takers or entrepreneurs. What I would like

to know is this. How will he judge whether this policy has been a

success over the next, say, three years? In 2015, on what basis will

he say that today has worked? He is right to stress that we are

not just talking about reward for failures. We are talking about the

general escalation of pay which is unrelated to performance. I don't

think it slightly that you can give a simple metric of how the policy

will eventually work through. If what we see happening his annual

reviews, or in some cases three- year-old used, successfully

implemented with well-informed shareholders exercising their votes,

in that way we will see a good deal of restraints and more strategic

thinking in the setting of pay policies. That is what we are

trying to achieve. Three years is a long time to pack

in share options, big bonuses, huge share handouts, long-term incentive

pays. Why not an annual shareholder vote which is binding in order to

stop top executive remuneration ballooning wildly out of control

within the three-year period? If that perverse behaviour does

happen, then of course the existing annual backward-looking advisory

vote will still happen. If shareholders are dissatisfied, the

company, subject to the Financial Reporting Council, will be required

to issue a statement. That will then require a vote the following

year. There are checks and balances in the system in order to ensure

that the kind of abuses you describe do not happen.

Does my honourable friend agree that there is still a role for

remuneration committees, in linking reward with positive performance in

companies right across the country? Yes, there are indeed Rolls or

committees. One of a issues I did not mission was the effort made to

ensure that fees for remuneration consultants are probably declared,

so that there is more transparency there, too.

I welcome the statement, not least because I moved an amendment in the

last Finance Bill. I appreciate the government was not consulted during

this period. The shareholder vote is a binding vote. It is a

straightforward yes or no. But the Secretary of State envisage a

situation where the shareholders can amend the policy, to enable a

ratio between the highest and lowest in comes?

It will be possible to work out the ratio because of the information

that will become available. We suggested it would not be sensible

to make that compulsory as a metric because it can be very misleading.

I described to the House before the anomalies that can happen when you

have a company with a very large number of low-paid -- low-paid

We don't attach overriding importance to that particular

measure. But he is right that it is not just a question of Yes or No.

Shareholders will have to engage with the company. It is a process

not simply an event. I would like to thank the Secretary

of State for the statement. I would be grateful if he could elaborate

on the concept of long-term behaviour, which she has hinted

that. I ran a business for 20 years before I came to this place. Why

would have to say that the best decisions are always made with the

long-term in mind. If we are to tackle mediocre performers, it is

only by taking a long-term view that we will tackle it head-on.

He is right. The Big Issue he mentions, which is essentially a

cultural question in the way that a business has evolved over a long

period. That was why I set up the review under Professor K and others.

They are going to report in July. Some of their proposals will emerge

in detail very shortly. Literally millions of people are

trying to make ends meet. Why should we believe that the existing

massive annual sums given to the heads of the banks, millions

annually, as well as other organisations, is likely to change?

We are in a very unfair society. There's no indication that is going

to change as a result of what the Secretary of State has told us to

read. This proposal is not designed to

solve all the problems of income and wealth distribution. But it is

designed to ensure that public listed companies to operate

responsibly and a properly policed by their shareholders. He raises

issues of tax policy, which I am sure we will debate on another

occasion. I welcome the statement. But are we

actually giving shareholders enough power, and is it fast enough in

order to stop companies providing a lot of executive pay for poor

performance? The measures in the Bill are strong

measures. Whether they take place fast enough depends on how quickly

this House proceeds with legislation. I expect to see it

come into effect soon. In welcoming the statement, can I

caution against weather presenters claiming credit for the spring. Can

I also ask the Secretary of State in relation to D3 yeah binding pay

policy reported by the petitioner investors, can he ensure that such

policies do not have undue head room built into them? -- in

relation to three year binding pay Well not proposing changes to the

financial services bill. -- we are not. The question of whether

there's a Leicester that -- Alastair city in the bill will

depend on the shareholders. -- The prospect of legislation has

helped. What I would say is that by passing these measures, we ensure

that this spring is not a one-off event, that it is sustained.

I would like to welcome the Secretary of State's measure

proposals to give shareholders, who, after all, own the businesses in

which they have shares, greater control over top pay. Further to

the question, would he agree that the best way to increase activism

is to increase the number of shareholders? What is the

government doing to increase the number of private shareholders?

He is quite right to stress the point that shareholders do own

companies. It has often been overlooked. Clearly a widening of

shareholding would be a desirable objective. We are looking at a

variety of ways of doing that, not least encouraging employees to have

shares in their own company. My colleague and I will be looking to

see that that is brought into effect in the Royal Mail.

There's evidence that a number of contributors to pay is the role of

remuneration committees. Be there are concerned about the narrow base

from which remuneration committees are drawn. -- people are concerned.

There's been recommendations to widen membership. The Secretary of

State has indicated his support for having an employee on remuneration

committees. If he does not make it mandatory, will he make it

mandatory that we have a wider membership from which to draw

committees? I take his broader point, that

diversity in directors is absolutely critical to changing the

culture of companies. The bid to delay issue we are focusing on the

moment is which in relation to women. -- of the particular issue.

It is part of a wider picture. More directors, more diversity,

including employees. A large proportion of the

population have a stake in the stock market. Does the Secretary of

State believe that there's a link between poor performance in the

stock market over the past 10 years and the increasing share of

corporate wealth that has been taken out by directors and senior

managers? It is precisely the divergence

between those two things which we are endeavouring to correct in this

way. It may well be that... It is true in the banking system that

very large levels of salary and bonus have been at the expense of

dividends. This series of reform should help to correct that.

The measures are welcome, but it should not just be a question of

trying to stop the upward spiral of directors' pay. Something needs to

be about it at the moment. Will the Secretary of State urge companies

to look at existing levels of directors' pay, and if it does not

result in dealing with some of the existing excesses, we look at

coming back to drive down existing levels where it is excessive?

We recognise that there's an important distinction between

existing pay arrangements which the government has by contract and

future pay policy, which will be subject of the binding vote. But

there's a restraint on existing pay through the Advisory vote. As I

have said out, I envisage the disciplines will be strengthened.

As an employee and the union rep at ITV, I was dismayed to see the then

boss of ITV receive millions of pay, perks and bonuses were making a

series of catastrophic business decisions that boarded company to

its knees and saw the share price plummet. I am dismayed to see he is

sacking workers at Labour Party HQ. Would my honourable friend agree

that the work force Bosman views should be considered in executive

pay? Can I congratulate my right

honourable friend on having secured this measure through the coalition

government? Can he assure me that this is not going to drive UK-

listed companies out of the United Kingdom, and what is it going to do

to encourage more companies to get listed in the United Kingdom?

accused of socialist tendencies by colleagues banning me, but I think

the promotion of shareholders as a strange definition of socialism. --

by colleagues behind me. In many quoted companies, highly paid

employees earn more than directors. With the Secretary of State

consider extending the transparency aspects of the legislation to

employees as well as direct as? -- as well as directors. In some banks,

and traders, they are paid more than their directors, and that will

be covered. I think there are probably very few public listed

companies outside the banking sector where what he describes his

real. Would it be worth considering adding the fee structures and

mechanics for fees, for executives search companies for those

positions? I would happily give more information on the detailed

work being done on the rules governing transparency in that

sector. The one he mentions his new, we will have a look at that. The

principle of more transparency is correct. Can he assure the House

that the Government is a major investor in some of the country's -

- as a major investor and some of the country's largest banks is

going to be a major investor... will have seen that the pay and

bonuses to senior executives reflected the Government's concerns

about excessive pay in general. he confirm that high performing

individuals and successful companies that perform within the

proper corporate governments have nothing to fear from these

proposals, but those companies that do not follow best practice clearly

have something to fear? And as the government proposing some form of

guidance as to what would be a best practice? There will be guidance

issued on the disclosure and what requires to be disclosed, and I

think the starting point of the question is correct, I want to make

it clear that we have no objection to people being rewarded if their

company performs well. Can I say that the Secretary of State is

absolutely right to focus on the long-term perspective, opting for a

three-year vote. Can he also emphasised the other issue in terms

of company performance but often the issues company relative

performance. When times are good, it is often good to reflect if

companies are doing well because all companies are doing well, but

this legislation is aiming for something different. Yes, that is a

very helpful point. The analysis shows quite clearly that the

overwriting -- overriding motivation changes with relative

performance. Thank you. I welcome this because power to shareholders

and business owners is how capitalism is a poster work. Yet it

is essential that shareholders are able to exercise their votes in

practice. Can the Secretary of State tell us what action he has

taken to make sure brokers communicate to their nominees and

shareholder owners that they have the right to vote at board meetings

and are able to execute it? What else -- what action will he take to

stop lending it is often used to steal away votes from the real

owners so other people can exercise it? Taking specific action -- I'm

not taking specific action on brokerages, but it is clear that

the participation of shareholders reflect good practice and a

favourable trend. We are talking about capitalism working well and

working properly, and she could have a word with his colleague

about the difference between capitalism and socialism. Point of

order of. My constituent is languishing in a Greek prison in

clearly unacceptable conditions, without no standard of due process

being followed. I have correspondent with the foreign --

corresponded with the Foreign Office, and was told I would

receive a reply on Friday. I did not. I called on Monday and was

told I would have a reply by yesterday, which I still do not.

This is incredibly Argent, but I have had no reply to three letters

or acknowledge from -- acknowledgement from the Secretary

of State. I think he has got the message, I am sure everyone will

have heard the point of order, and this will be taken very seriously

after raising it on the floor of the house. This morning's Guardian

newspaper carried a report of the announcement by the Deputy Prime

Minister that the government is to introduce mandatory carbon emission

reporting by large companies. DEFRA wrote a statement on the issue, but

it was not available for members to read until after 10am this morning.

I know you take a dim view of ministers who make announcements to

the media rather than the house, so have you received any indication

from either the Secretary of State or the deputy prime minister of

their intention to make a statement to the house? Or can your -- can

you recommend which newspapers to buy to keep track of the

Government's think in. He is correct, we do take a dim view. We

now come to preliminary business. The presentation of bills. The

first being the Bank of England appointment of governor. Thank you.

Bank of England appointment of Governor Bill. 6th July. No. Two.

Scrap-metal it -- scrap-metal dealers bill. Friday the 13th July.

Number three. Social care, local efficiency and identification of

carers bill. Pray the 7th September. -- Friday 7th. Number four. Mental

health discrimination number two. Friday 14th September. Mobile loams

bill. Friday 19th October. -- mobile homes. Family justice

transparency accountability and cost-of-living bill. Friday 26

October. Neil Carmichael. Antarctic Bill. Friday 2nd November. Sir Paul

Beresford. Prisons interference with wireless telegraphy bill.

Friday 6th July. Prevention of social housing fraud bill. Friday

13th July. Mr Mike Weir. Winched to fuel allowance payments claimants

bill. -- winter fuel allowance. Friday 7th September. Mr Stuart

Andrews. Prisons property bill. Friday 14th September. Cheryl

Murray. Marine Navigation bill. Friday 19th October. Lynsey Roy.

Off-road vehicles Registration Bill. Friday 26 October. John Glenn.

Prevention of death build. Friday 2nd November. -- Prevention of Des

Price marking Consumer Information Bill. Friday 2nd November.

International official development assistance target Bill. Friday 13th

July. Simon Kirby. Disabled Persons parking by just bill. Friday the

6th July. -- Disabled Persons parking badges. Michael Meacher.

General anti-tax avoidance principle bill. Friday 14th

September. Transparency in UK companies supply chains,

eradication of slavery bill. 19th October. Mr Douglas car as well.

European Communities Act repeal bill. Friday 26 October.

We now come to the main business. Liam Byrne. Thank you. Once upon a

time the party office -- the party opposite like to tell us we are all

in this together. Those words ring hollow today, after a Budget in

which we have the granny tax capped and a tax cut for millionaires, we

can assume the Chancellor was taking us for a ride. Yesterday I

saw the man who introduced the Secretary of State to Easterhouse.

He said he had so much confidence in the belief of did Secretary of

State that he thought he should resign. Today's debate is about

many of the people that he has stood up for. They are the one in

four of her fellow citizens who are not all in it together with the

Chancellor and the Prime Minister, they are not part of the Chipping

Norton said, they do not get to go to kitchen suppers. They are

Britain's disabled sufferers, parents of disabled children, and

they now find a government determined to to renege on a deal

they believed in. I hope this will be a consensual motion, and there

will be interventions from the Treasury bench is asking about cuts

and what cuts the side of the House of Lords. It is a perfectly

reasonable line of argument. It's set out was wise. We warned of the

risk of cutting too far and too fast. We warned of the risks of a

double-dip recession and now we have one. The cost is astronomical.

That is why the Chancellor had to explain to this house that he had

to borrow �150 billion more than Labour would have borrowed. In the

sector to stay's own department, the bill for jobseeker's allowance

and housing benefit is now running out of control as a consequence of

his failure to get people back to work. �9 billion extra is now

projected to be spent than was originally forecast. Someone has to

pay this bill. The Government, the Cabinet, this front bench has

decided the people who should pay I'm glad you mentioned the disabled.

Why did the Labour Party's support encourage apartheid for the

disabled? Are they not full members of society, too?

I welcome his intervention. The need for welfare reform is long

overdue. Can the Minister explain when his party was in government,

the shadow minister explain that when his party was in government,

why did the government not get to grips with this? There was a

transparency about where money was headed. The previous Labour

government have plenty of opportunity to reform welfare but

failed to do it. Can he explain why?

The Labour government introduced some of the biggest reforms of the

Labour -- welfare system that we have ever seen. York Freud,

reviewing the changes, said the change was remarkable. -- York

We have to return to the point but who pays for this government's

failure. We have to take a decision about how the load is carried. This

government has decided so much of the load must be carried by

Britain's disabled people. New research shows that over the course

of this Parliament, disabled people in our country will pay more than

Britain's bankers. Indeed, in the final year of the parliament,

disabled people will be paying 40% more than the banks. That, I'm

afraid, tells you everything you need to know about this

government's value is. This House should be grateful to Cerys UK and

the AIDS charities who have done us a service by fitting out the impact

of these movements. -- VII and charities. It is a scandal that

people are being let down. The situation is not going to get

better, it is going to get worse. Scope remind us that credit, if it

is introduced, will hit disabled people 30% harder than non-disabled

households. Reducing support for children will cut �1,300 from

families with disabled children. The government's arbitrary cut De

De La risks plunging half a million people, half a million families

into a financial black hole. Perhaps we will hear how he would

reform the Budget. Perhaps he can tell us how many factories were

shut down and closed during the time that Labour were in power.

I would like him to intervene again will come on to that in more detail.

It is an important part of our motion. I assure the honourable

gentleman I will let him have his say at that stage. We believe that

the allowance needs reform. But we believe that you need an

independent assessment. The point is, you should design the

assessment first and in cabinet the savings. What this government has

done is set an arbitrary, top down financial cuts and then it tried to

scramble around to find out what kind of assessment will deliver the

cash. So little thought has gone into this reform that disabled

people now face being tested for the allowance, and for other

benefits. The testing costs alone for reform will cost the taxpayer

in this country �710 million. Surely we should be thinking about

this harder. Surely we would be thinking about what is the right

assessment for the allowances. There are different things,

different benefits. How can we bring them together in a way that

is more convenient for disabled people, and help them to secure the

support that they need to live an independent life. Actually, that is

a reform that would save money. When I was at the Treasury, it was

costed as saving �350 million by 2015. It to this bleak picture, I'm

afraid there's more. Cuts to social care and housing benefit will make

the situation worse. �1 billion has been cut from local council budgets

for social care since this government took office. Ministers