amendment of the law

Barry Sheerman Excerpts

Monday 25th March 2013 Commons Chamber

[Mr Pickles]

The hon. Gentleman makes a reasonable point. However, housing prices are at a more reasonable level now, we will be increasing supply and of course there will be a check on the scheme, through the Bank of England, to see that it is renewed every three years. So the worries that he raises are not correct—

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

rose—

[Mr Pickles]

The hon. Gentleman is jumping up and down. I have not said that I will give way, but I will.

[Mr Sheerman]

It is very kind of the right hon. Gentleman, who knows that I love intervening on him because I always get such a good response! It is supply that is wrong in this country; there is a national emergency in the supply of affordable housing. There are 1.5 million people on the minimum wage in this country. The waiting list in Kirklees has zoomed to having 17,500 people on it. These people do not have much money, they have little hope of ever buying their own home and they need a good affordable home now.

[Mr Pickles]

Of course they do, and it is a matter of regret that the number of affordable houses fell by 420,000-odd during Labour’s period in office, and we see a way in which we can achieve a number of affordable houses. As I said, we are well on track to deliver 170,000 and I hope that the hon. Gentleman will be pleased about that. I wish to make this contrast for him, because we have the benefit of the Leader of the Opposition’s remarks on Labour’s housing plans. He says:

“We didn’t do enough... I don’t have a solution for this, but in the end government has to invest in housing, and...it’s a massive challenge”.

I think we can all agree with that—we can all unite behind those principles—so where the last Administration wrung their hands, this Government are stepping in. In the past couple of years, we have made sure that first-time buyers and those looking to buy a brand-new property have been given a helping hand. We also reinvigorated the right to buy, building mixed communities, more affordable homes and giving social tenants a chance to move up the housing ladder. This Government believe in extending opportunity to everyone who works hard and wants to do so.

The Home Builders Federation has said:

“If people can’t buy, builders can’t build”.

It has also said that “people’s inability to buy” has been the biggest “constraint” on house building. That is why in the Budget we announced our help to buy scheme. It is here to help in two ways: it is offering an equitable loan and a mortgage guarantee.

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[Hilary Benn]

My hon. Friend is correct. That is a consequence of the 60% cut.

The number of people on housing benefit has gone up by 300,000, almost entirely accounted for by people in work. When the Prime Minister launched NewBuy, the previous scheme, in March last year, we were told that it would help 100,000 people to get a mortgage. A year on, how many people has it actually helped? The answer is 1,500. Firstbuy, which was slightly more successful, has helped 6,000 people against a target of 16,500.

Then there is the strange case of the remarkably reclusive infrastructure guarantee. It was launched by the Chancellor in the autumn statement. He said that he would set aside £10 billion for investment in housing. It sounded good and we supported it, but we now know that not a single penny of it has yet been used to support house building. The facts are clear: lots of promises, precious little delivered, and not a lot for the Secretary of State to crow about.

[Mr Sheerman]

Many of my constituents are fed up with listening to Punch and Judy debates like this. They are getting tired of hearing, “They did this, but we didn’t do that.” Could we not offer the Government a proper agreement to discuss the way forward to deliver affordable housing now, because it is a national emergency? Is there not a possibility that the parties in this House could get together for a change?

[Hilary Benn]

Well, I have already told the Secretary of State that when he has proposals that will work and succeed, I will support them. If he wants the benefit of further advice from the Opposition, I would be happy to see him in his office, especially if he is buying the tea and biscuits himself.

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[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I am glad I met a man from St Ives on this journey, because I agree with much of what the hon. Member for St Ives (Andrew George) said about shared ownership.

I suppose it is because I have been in this House too long—there is usually a chorus after any Member says that—and because I have heard a lot of Budget and autumn statements that I have become more cynical about them as time goes on, but I want to start by saying that, as co-chair of the associate parliamentary manufacturing group, I believe that some of the concessions and planned changes affecting manufacturing industry in the autumn statement and the Budget were good for manufacturing, and were welcomed by people in the sector.

The Budget was supposed to be about aspiration. I would like that aspiration to be lifted much higher. Our country is changing fast, and my irritation with Budgets and autumn statements is that there seems to be no time for politicians to get together in a sensible way and think strategically about policy making and the direction of our country. Our country is changing fast. The social and economic structure is changing rapidly and fundamentally within my lifetime. I was talking recently to students at Northampton university, and their knowledge of the social structure of Britain is amazing. I asked them what percentage of people worked in manufacturing and some of them said 30% or 40%. They had no idea that about 9.5% of people work in manufacturing; it is 10.5% in Huddersfield. Some 30% work in what people call public services—education, health and local government —and roughly 60% work in private services.

Working in early years or later years care in private services means earning minimum wage or minimum wage plus. Working in retail and distribution also means earning minimum wage. No one can live the good life on minimum wage. I came into politics so that my constituents could live the good life. We all know the good life: we can put food on the table and have a nice house or flat, whether it is rented or bought through a mortgage. We all know the essential ingredients for a good life, but many of the good jobs that provided it, including in manufacturing, for example, have gone. They have been replaced by minimum wage jobs in retail and distribution, and in caring for patients.

Universities, apprentices and education were mentioned only once in the Budget, and that is a real worry. I care passionately about giving young people jobs and opportunities, and 90% of firms do not take on apprentices. That is a real concern and it was not addressed enough in the Budget.

Manufacturing is important in our country. My vision is of a high-skilled, high-paid Britain, but at the moment many of our people are heading towards a low-skilled, low-paid economy. In fact, those two can live side by side, and as Lord Heseltine told us, there is a grotesque change in our country that should be worrying every Member—the way in which London and the south-east are sucking the life out of our great towns and cities. The Budget has not addressed that, but we must address it if we are to get strategic policy right. This Budget did not do enough in that direction.

[Mr David Ward (Bradford East) (LD)]

Does the hon. Gentleman also agree that demographic changes and the rising numbers of young people in certain communities make it even more important to have specific policies targeted at them in order to get them into workplaces and apprenticeships?

[Mr Sheerman]

The hon. Gentleman knows of my passion for skills training and apprenticeships. We should abolish unemployment until the age of 25. The Netherlands did it, so why cannot we? There was not enough in the Budget to address youth unemployment. When I was a shadow Home Affairs Minister, I knew the importance of putting money into deterring young people from crime. If someone is not a criminal by the age of 25, they do not become one, so if we keep young people in employment, training or education until then, they never get into inter-generational worklessness.

Those are the sorts of bold policies I wanted in the Budget. I wanted higher aspiration and for my constituents to see us not lobbing insults at each other, but finding common cause to get the country ready for the 21st century and to make ours a society of high skills and high pay.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 29th January 2013 Commons Chamber

[Mr Osborne]

My hon. Friend has described the comments of the right hon. Member for South Shields as a speech. I think we could describe them as an audition.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor of the Exchequer is being lobbied heavily by the Mayor of London, Boris Johnson, for a massive increase in infrastructure spending in London. Does he realise that if he really wants to get our economy going, he should be investing in the infrastructure of the towns, cities and regions of our country, particularly Yorkshire and the north-west?

[Greg Clark]

The hon. Gentleman may not have been aware of it, but an announcement was made yesterday that was germane to his point: the announcement of the extension of High Speed 2 to Leeds, Sheffield and Manchester, which, in 13 years in government, his party never got around to delivering.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

The first thing I would say is that we reduced the small companies rate—which would have gone up to 22% under the plans put in place by the last Labour Budget—to 20%. We have now introduced a £250,000 annual investment allowance for small and medium-sized businesses for the next two years. The right hon. Gentleman says that the Labour party had been calling for this. It had 13 years to introduce a £250,000 annual investment allowance. There were all those Budgets that the shadow Chancellor wrote and he did not put it in place.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

The Chancellor will know that the all-party parliamentary groups on Yorkshire and North Lincolnshire and on manufacturing welcome the change in attitude towards the capital allowances. However, businesses in Yorkshire are saying that they are looking for some leadership and some light at the end of the tunnel, and they ended up feeling thoroughly depressed after watching the autumn statement. When is the Chancellor going to show more leadership? Let us see some light at the end of the tunnel.

[Mr Osborne]

I have to say that the reaction to the autumn statement from the business organisations of Britain was very positive. It was warmly welcomed because we are maintaining control of the public finances, which is a prerequisite for stability and recovery, and because we are taking steps to cut the corporation tax rate and increase the annual investment allowances. I still do not know whether Labour supports the cut in corporation tax. Its Front Benchers have been sending out confused messages on that over the past couple of days. Perhaps we will hear from the shadow Chancellor when he gets to his feet.

Bank of England

Barry Sheerman Excerpts

Monday 26th November 2012 Commons Chamber

[Mr Osborne]

My right hon. Friend has read out an extremely distinguished group of individuals. What he did not say was that, as I understand his position, he would like the banks split entirely in a Glass-Steagall-like separation. Over the past couple of years we have constructed a consensus on ring-fencing. We appointed John Vickers and his very experienced commission to do the job, and they looked explicitly at ring-fencing and came forward with their proposal. That proposal has now been discussed in this Chamber and commands consensus across the system. If we were suddenly to back away from it now and say that we wanted to start all over again with some other approach, that would delay everything. That would not be the right approach, and it would destroy the consensus that exists on ring-fencing.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I do not want to strike a dissonant note, but is it not a little surprising that in practically the leading banking nation on earth we could not find a British candidate for the job? We have chosen a Canadian, who I am sure was a good candidate. Normally, the overlap between the retiring Governor and the new one would be longer. Is that not a worry, even with Dr Bean staying on an extra year?

[Mr Osborne]

As I said, there were excellent British candidates, any of whom would have made a good Governor. In my judgment, though, Mr Carney was a better candidate. He was the only one who combined central banking experience, economics, experience of financial regulation and experience in the private sector. It says something about Britain that we have the self-confidence to go and get the very best in the world to serve as our Bank Governor.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 6th November 2012 Commons Chamber

[Sajid Javid]

The one policy that brought the coalition Government together was our determination to deal with the record budget deficit we inherited. When the Government came to power, the previous Government were borrowing £300,000 a minute. We have cut the deficit by 25%, which has brought confidence and jobs back to Britain.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

As an English and a Yorkshire MP I have a great interest in how the Heseltine review, “No Stone Unturned”, will help my region. Some of us in Yorkshire are very pleased with the report, because there is a glimmer of hope for more jobs and more investment in Yorkshire. What will the Treasury do to follow up the report that it commissioned?

[Sajid Javid]

This Government rightly commissioned the report because we believe that Lord Heseltine has a lot of experience in that area. We will study it carefully and will respond in due course.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 11th September 2012 Commons Chamber

[Greg Clark]

I am grateful for my hon. Friend’s question. He knows what he speaks of because he is an ex-manufacturer himself—appropriately enough, as a Staffordshire MP, in the Potteries. One of the early successes of the funding for lending scheme is that banks are now targeting manufacturing firms. Just yesterday, RBS said that the scheme would be used for mid-sized manufacturers. RBS has cut interest rates from 3.45% to 2.75% and is looking to increase lending to mid-sized manufacturing businesses, which have so much potential.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

May I push the Minister on this issue and what is happening in the real world? As even Boris would explain to him, the fact of the matter is that we have low interest rates, but people cannot get mortgages to get into the housing market and my constituents, along with people in business across Yorkshire, cannot get decent loans to start businesses or, more importantly, expand their businesses. In the real world, it is not working. What is the Minister going to do about it?

[Greg Clark]

The hon. Gentleman will know, because he has studied the figures, that mortgage lending has actually been increasing. The point of the funding for lending scheme is precisely to make more funds available. When he studies the detail—I am happy to meet him and go through it with him—he will be able to promote the scheme in his constituency, because his constituents, whether they are businesses or households, can benefit from it.

Business and the Economy

Barry Sheerman Excerpts

Monday 14th May 2012 Commons Chamber

[Vince Cable]

I think that I can deliver the spirit if not the letter of the hon. Gentleman’s intervention. I do not think that we can override European legislation in quite that way, but I do agree that there is a lot of unnecessary and burdensome European regulation, and I am working with what we call like-minded Ministers in other European Governments to get rid of it as much as possible.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have great admiration and respect for the Secretary of State because he is one of the few leaders of the coalition Government who has ever had a proper job. What does he say to the Foreign Secretary, a man who has had very little experience in the real world, whose message to business people is that they are lazy and should work harder?

[Vince Cable]

I do not think that the Foreign Secretary actually said that. He works extremely hard with me and my colleagues promoting British business around the world. A large part of his job is commercial diplomacy and he is doing it extremely well.

One key proposal in the enterprise and regulatory reform Bill is legislation for the UK green investment bank, which will drive the transition to a green economy. The Bill will set the bank’s purpose, ensure its independence and make funding provision. The bank will be formed as a public company under the Companies Act, with initial funding of £3 billion to March 2015. It will operate independently from Government, but will agree its strategic priorities with the Government. Until formally established, the Government are making investments, on commercial terms, in green infrastructure through a specialist team in my Department. I reported to a Standing Committee of the House two weeks ago on its progress.

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[Vince Cable]

I recognise that there are particular problems for small companies in adapting their work practices, but of course many of the most successful small companies have flexible practices. The idea of creating a two-tier labour market in this respect has many practical difficulties, but we can debate that as the Bill goes through Parliament.

[Mr Sheerman]

Before the Secretary of State moves on from that point—I can see from his papers, I think, that he is coming towards the end of his speech—I would like to point out that he has not once yet said anything about innovation, he has said little about entrepreneurs and enterprise, and he has said something complacent about the levels of unemployment, which include 1 million unemployed young people. What is in the Queen’s Speech about that and what is he going to do about that?

[Vince Cable]

That sounds like the basis of a speech in the debate. The hon. Gentleman will know that we are pursuing forceful policies in respect of innovation, including the establishment of the catapults across the country—something entirely new and positive in the innovation sphere—without the need for legislative approval.

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[Mr Umunna]

I will come to that. As I have said, the primary authority scheme that the Secretary of State has mentioned was something that we introduced when we were in government, and I support the proposal to extend it.

[Mr Sheerman]

Before my hon. Friend leaves the pronouncements of the Foreign Secretary, I want to ask him whether he heard Lord Digby Jones speaking on Radio 4 this morning of the Government’s decision to “decimate” and “cut” UK Trade & Investment—the trade and investment arm of the Foreign Office. Is not that a reflection on the Foreign Secretary, who is not working very well or very hard himself?

[Mr Umunna]

I think that UKTI needs to do a hell of a lot better, as my hon. Friend suggests. Actually, I think that this Government need to work a hell of a lot harder before they start lecturing others. It is not that we disagree about the need to increase our exports, but let us take a step back. The Government’s economic policy is one of expansionary fiscal contraction. Their idea is to hack off parts of the public sector and take away things that the Government do, and they expect the private sector automatically to step in and fill the gap. I do not think that telling business people that they are whingeing and not working hard enough is a way to inspire them to do what the Government expect of them.

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[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I have been a Member of the House long enough to have heard quite a few Queen’s Speeches. Some were good, some were bad and more were indifferent. I do not say that on a party political basis, as some of Labour’s Queen’s Speeches did not live up to all their glister when they were first heard. I tend to take Queen’s Speeches with a pinch of salt. With the experience of two years of this coalition Government, however, I have noticed—I might even have said this to you when you were one of my students at university, Mr Deputy Speaker, although there was no recent experience at that time—that coalitions seem to sacrifice leadership and imagination. There is not enough boldness to lead with the necessary imagination. When we look back at this period, I suspect we will find that there was not enough leadership or imagination in this Queen’s Speech.

After all, here we are in the most turbulent period economically in not just European but global history. We might all be swept away by something that is mainly outside our control in the eurozone. Nobody really knows whether something dreadful might happen in the Greek economy and then move across to Portugal, Spain and all the rest. We know that some of the scenarios are very grim indeed for our country, which is not just a little island on its own. There was nothing in the Queen’s Speech that said that we are in such a perilous situation that we need to batten down to face a turbulent and difficult future. Something like that should have been acknowledged.

In the short time available, I shall centre my remarks on what I would have expected this Government, dominated as it is by the Conservative party, to know about—manufacturing and small business. Conservative Members often say that they understand manufacturing and small business very well, but I do not think they do. I talk to small businesses all the time. I find that they feel—and I think they are right—that the people who lead this coalition Government spend a great deal of time talking to big businesses in the FTSE 100 but do not talk to the small companies in which our future lies, although all the research suggests that it is small and medium-sized enterprises that will provide the employment, give us the apprenticeships, and keep us moving and developing as a successful country.

[Robert Flello]

Is not the Sunday Trading (London Olympic Games and Paralympic Games) Act, which was rushed through the other day, a good example of the Government listening only to big business? It will help the big supermarkets, but harm the small businesses which normally make some money on Sundays when the supermarkets are closed.

[Mr Sheerman]

I believe that my hon. Friend and I voted in different Lobbies on that occasion, so I will not develop the point any further.

What are small and medium-sized enterprises in this country looking for? They are looking to the Government to promote innovation. All the research shows that we must invest in small companies, which are often in the high-tech sector. They will be the new employers; they will be the organisations carrying out the innovation. After all, our country was built on innovation and on entrepreneurs, and my town of Huddersfield was built on people who understood that. It is true that they had free energy, which, as was pointed out by the right hon. Member for Wokingham (Mr Redwood), is extremely important in a world of automation. Although we can substantially increase the number of people working in manufacturing, it will not return to the 20% or 30% level. The fact remains that it is to the small companies that we must look for the future.

There was not enough about banks in the Queen’s Speech. Here they are, with all this taxpayers’ money, and we still cannot persuade them to lend to new businesses. What on earth is going on? The banks have all that money, but they are still reluctant to invest in new ventures. The Government should have done something about that. Let us see better finance for the productive sector from the banks, and let us also expand our manufacturing exports. We hear time and again that we are not taking advantage of the markets in China, Brazil, Russia and India.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

I was interested to hear the hon. Gentleman mention countries such as Brazil, China and Japan, and also banking. Given that the debate is about the Queen’s Speech, what piece of legislation would he seek to introduce to achieve his very sensible goals?

[Mr Sheerman]

Everyone knows that we could have had legislation that strengthened the Government’s power to force banks to lend to small businesses.

It was me, in an intervention, and not the shadow Secretary of State, who drew attention to what had been said by Lord Jones this morning. He said that the trade and industry outreach of the Foreign Office had been decimated in recent months. We need to expand our manufacturing exports, and the small and medium-sized enterprises will do that as well.

If we are to rebalance the economy, we must recognise what the Queen’s Speech does not recognise: London and the south have become totally out of proportion in terms of infrastructure investment, resources and everything else that we can think of. To those who come down here from Yorkshire, the north-west or even the midlands, this part of the world is a foreign country. There is no recession here, but there has been a recession for three years in the regions of our country. The fact that the Queen’s Speech makes no reference to that is a disgrace.

[David Mowat (Warrington South) (Con)]

Will the hon. Gentleman give way?

[Mr Sheerman]

No. I will not be given extra time if I give way again.

Finally, let me say something about skills and management. I am the chair of the all-party parliamentary group on management, which recently received a report from the Chartered Management Institute showing that 43% of managers in this country are not very good and 23% are awful. Whether it involves running a hospital, running Parliament, running a school or running a business such as an SME, good, skilled management is underrated in this country.

What we needed in the Queen’s Speech was a proposal to abolish unemployment among young people for good. We should have a system like the Dutch system, under which no one under 25 is unemployed. Everyone below that age is in a job, in education or training. No one is allowed to stay at home receiving an income and doing nothing. That is the way in which to repay, for years and years, the great debt that is owed to individuals and to heal the scars that they bear, and to deal with the cost of it all to our country.

We must do something at a time when—I do not know whether anyone has seen the figures—there are 6.9 million unemployed graduates in Europe today. That means 6.9 million wasted talents, but what did the Queen’s Speech do about that? Nothing.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 24th April 2012 Commons Chamber

[Danny Alexander]

My hon. Friend makes an important point. The investment in High Speed 2 will not affect the amount of investment in the traditional rail network. It will allow us to go forward—for example, with the investment in the Oxford to Bedford rail line, which I know will affect his constituency, create 12,000 jobs and give a boost of £38 million to that area’s economy.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Does the Minister realise that those of us who represent the squeezed middle in this country—the northern and midland regions—are sick to death of seeing London and the south-east getting all the infrastructure investment, all the cranes, while we are waiting patiently for investment in our part of the world, where we have been in recession for three years?

[Danny Alexander]

In that case, the hon. Gentleman ought also to welcome the substantial investment, for example, in the northern hub rail project. He ought to welcome the substantial investment in the electrification of the trans-Pennine railway. He ought to welcome the substantial investment in the capital infrastructure around ports to enable the north and the north-east of England to benefit, particularly from the investment in renewables that we will see over the coming years. A fair picture would represent those things too.

Oral Answers to Questions

Barry Sheerman Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Speaker]

I remind the House that Members ask the questions and Ministers answer them.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

2. What fiscal steps he is taking to assist women facing high child care costs.

[The Chief Secretary to the Treasury (Danny Alexander)]

The Government do not assume that high child care costs are an issue for women only, but we have increased the provision of free child care for three to four-year-olds to 15 hours a week, and extended that commitment to about 40% of two-year-olds by 2014-15. The Government support low to middle income working families directly through the child care element of working tax credits. We also provide support through employer-supported child care vouchers.

[Mr Sheerman]

But what does the Minister say to young women who are professionals and managers and who, according to the Daycare Trust, face the double whammy of a 30% increase in the cost of nursery provision over the past four years and the loss of their child benefit? What does he say to those young women?

[Danny Alexander]

I say that the Government are increasing the entitlement to free child care for three and four-year-olds from 12.5 to 15 hours a week, and introducing a new entitlement for disadvantaged two-year-olds, so that 40% of two-year-olds will have 15 hours of free child care per week. That represents substantial support for those families, in addition to which there will be tax credit support—depending on income—and access to employer-supported child care vouchers, which were taken up by 500,000 people in 2011-12.

Banking (Responsibility and Reform)

Barry Sheerman Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Umunna]

We have said that, if we had known then what we know now, we would not have knighted Fred Goodwin. However, I say to the hon. Gentleman that the future of the banking sector is bigger than the individuals who have featured in the headlines of late. It is important that we debate what happens in the sector as a whole rather than focusing on Fred Goodwin and other individuals, important though it is to make points about them.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

As we are examining history—some Government Members do not like to hear accurate history—I point out that Lord Burns was the Chairman and I was the deputy Chairman of the pre-legislative Joint Committee that considered the financial services Act. I remember that very clearly indeed, because it took us many months and was the first time there had been a joint Lords-Commons pre-legislative inquiry. The context was bitter resentment from the banks, which tried to water down the Bill, and no help from the people who led the Conservative party.

[Mr Umunna]

I presume that my hon. Friend is referring to the Joint Committee that considered the Financial Services and Markets Act 2000. The consensus at the time was shown in the approach instilled in the Act, and we are now revisiting the regulation of the sector.

The crash was global in nature, and the causes cited by the Independent Commission on Banking include declining underwriting standards, the mispricing of risk, a vast expansion of banks’ balance sheets and rapid growth in securitised assets—in short, gross irresponsibility. The commission also stated in its report that one problem was that some bank employees were remunerated

“on the basis of reported profits that were neither time-adjusted nor risk-adjusted, and led to employee incentives that were not always aligned with the long-term interests of the bank.”

The US financial crisis inquiry commission established by President Obama, which reported last year, went further, stating:

“Compensation systems—designed in an environment of cheap money, intense competition, and light regulation—too often rewarded the quick deal, the short-term gain—without proper consideration of long-term consequences. Often, those systems encouraged the big bet—where the payoff on the upside could be huge and the downside limited.”

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[Mr Umunna]

I agree with my hon. Friend. First, an employee understands what is going on in the business—perhaps, in some respects, better than a non-executive director—and, secondly, employees have a stake in the business, and if the business fails, they ultimately pay the price, as thousands of RBS employees going through the redundancy process are now realising.

[Mr Sheerman]

I am certainly not against this sensible proposal to put employees on boards, but as I understand the Walker review and its recommendations, it does not meet the situation now. Instead of innovations, we need something so dramatic that we change the culture in our banking system and its understanding of what is right and wrong, as was mentioned earlier. The culture is what matters, but I see nothing coming from the Government that will fundamentally change the culture that motivates the people working in the sector.

[Mr Umunna]

rose—