My Lords, first, I have to correct an error I made in the last group of amendments. I referred to the HBOS Reading scandal when I was talking about the Promontory report, and of course I should have been talking about the RBS GRG scandal; I am afraid I got my scandals wrong. My apologies for
that—there really are too many to choose from. I hope that one day I find there are no choices; that would be a very good situation to be in.
I find this group of amendments wonderfully refreshing and a very important change of direction. Amendments 108, 109 and 110 in the name of the noble Lord, Lord Hodgson, build on the concepts that we already have in the UK Stewardship Code but take that further. In many ways, one can see a relationship with the duty of care amendments that we talked about earlier in this debate. That duty of care was focused on customers but in many ways that is now extending that perspective to employees. I find that exciting and worthwhile.
I and my colleagues in the Liberal Democrats have long talked about the need for a very different social contract between employers and the workforce. Very often that workforce may not be an official workforce in the formal sense; it may be people who are self-employed and working freelance but who in effect are working very closely with an organisation. The whole of that workforce needs a very different social contract as we go forward into a different era.
I think we both have different standards about how we treat each other and different expectations. However, we are also about to go into a period of transition to the digital age. That will be disruptive. It creates real issues for a large swathe of people and we cannot passively step back and look at a group of people just as collateral damage as we make that transition. The obligations to the workforce have become far more significant than they might have been in a fairly steady and static era when everything was expected and was not changing very significantly.
I have long been a fan of what is loosely called triple bottom line accounting—and have probably talked about it too often in this House—whereby issues such as the environment and the social impact along with the financial impact are measured when we look at both individual accounts and when we look globally at a nation’s accounts. We had earlier amendments around the issue of well-being, which are well related to all that.
I was excited to hear the example of New Zealand that the noble Lord, Lord Knight, detailed to a fairly significant degree. Nearly 20 years ago I spoke to a conference in Auckland around these issues as New Zealand was making its decision to revisit the way in which it managed its national accounts and looked at corporate accounts. I notice that very often, when we look at an English-speaking country with close ties to the UK, we find it much easier to absorb the examples and to treat them in a sense as a pilot from which we can learn. I therefore hope very much that the principles in these amendments will be enhanced.
Like the noble Lord, Lord Hodgson, and my noble friend Lady Bowles, I am a great believer in employee share schemes. There is always a downside to be aware of. If something goes wrong in a company, you want to make sure that employees have also built other pension resources, have diversification and all those kinds of opportunities. A principle that is held as very important for senior management ought to be extended down throughout the employee base. Where you have ownership, you have a voice, and having a voice is
important both in empowering people in their everyday life as a workforce and in making sure that they drive the direction of the company they are working for. We all know that the old-fashioned view that all that matters is the shareholder is essentially part of the past, and I very much welcome all these amendments as part of the future.
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