Lord Mitchell
Member of the House of Lords · Labour · United Kingdom
“In those days, no one quite understood the long-term dangers of radiation, and protection was rudimentary. For him, it was fatal. In 1998, he was diagnosed with acute myeloid leukaemia, which he knew was terminal. He told me, in his usual blunt way, “I know how this story ends and it is not pretty.”
“My Lords, on 9 October 2000, my parents-in-law, Jack and Ruth Lowy, committed joint suicide. He was dying and she had decided to accompany him on this last journey. Jack was born in Bratislava in what was then Czechoslovakia. The family were Jewish and following the events in Munich in 1938, they fled to Philadelphia.”
“My wife in particular sensed that they would carry out their wishes. After all, they were both intelligent people who had carefully thought this through. There was no one to support Jack and no one on hand to help Ruth in what must have been hell for her.”
“I cannot be certain about my mother-in-law’s motivation to join him, but they both knew that his own suicide at home could well run the risk of her being charged with committing a crime as an accomplice. What I do know is that had this Bill been law, she probably would have chosen life.”
“I always felt that the issue of antisemitism on campus did not emanate solely from the students. It also came from the laissez-faire attitude of the faculty.”
“We kept the brief tight, with no references to the Middle East; we judged that there was nothing we could do or say that could make any difference. Where we could definitely make a difference was through reference to our common UK experiences and our heritage. I think we made progress.”
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“The solution is to make pay transparent and to ensure that remuneration policies are set via the board, in consultation with independent experts and with the shareholders’ explicit approval. The amendment which I am addressing first, Amendment 58BA, deals with the top 10 and bottom 10 earners in a company. This amendment aims for greater transparency on pay across the whole of the company, so that shareholders have more information when they come to make decisions on pay. It requires that the salaries of the top 10 highest earners in a company, outside the boardroom, are disclosed in a similar fashion. No doubt companies would choose to do this in an anonymous form, with lists of pay bands and the numbers of employees who fall into each band. This would be entirely acceptable and is good practice.”
“My party wants fairness and balance. It is worth noting that if the minimum wage had been increased to reflect the average remuneration of FTSE 100 CEOs, the minimum wage would now be at £19 per hour. Instead we have this growing disparity, especially in London where so many leading companies are based and where, in 2011 alone, the top percentile received a 16.5% greater increase than the bottom percentile. Put simply, too many are being left behind and bringing this imbalance back into balance is exactly what my party’s one-nation philosophy is all about. That is the background but let me repeat: we have no problem with high pay. However, we have a problem when this pay is set by a cohort of good old boys who look after each other’s interests.”
“I am not saying that what the FSA has done is disturbing; what it has done is really good, but the practice that was going on is disturbing. When they come back, what do these well paid executives say? “It is a global employment market. If we don’t get top dollar, we will go somewhere else or to some company that will pay us”. You hear that all the time. The FT hints that RBS executives are threatening it. You can use any word you like to describe this kind of behaviour; my word is blackmail. It is what Premier League footballers do. My advice to anyone who is faced with this gun to their temple is to call their bluff. My experience in business is that no one is indispensable. Just below the great man—and now, increasingly, the great woman—you can bet your boots that there is someone who can step up to the plate.”
“This bank, where people have been lucky to avoid criminal prosecution for fixing markets, is one that we own and what is going on is simply wrong. This very day, we read about the very same actions being taken by Barclays, a bank whose record is less than perfect. These executives grab all they can when their company’s trading record is poor and where the shareholder value has remained at rock bottom. Being paid to fail does not sound right to me. In even more disturbing news this morning, the FSA has come out and criticised the mis-selling of complex interest swaps, which particularly hit SMEs that were, in many cases, ill equipped to evaluate their risk and were relying on the good name of the banks that sold them the product.”
“We have spoken about Amazon today but the owner and founder of that company, Jeff Bezos, also receives a basic salary of less than $100,000—that is, less than a Member of Parliament. I know that in those companies, both those entrepreneurs were already wealthy men but for them it was never about raiding the kitty; it was about capital growth and the long term. Does that not send a positive message to their employees? Their priority is the customer, the product and the service. Get that right and the rest will follow. It is with much dismay that I see the very opposite in many other sectors of the business spectrum. This very week, we read that RBS intends to divvy up £250 million by way of bonuses, plus a likely fine of £500 million to the US authorities—this is a separate issue—for the bank’s manipulation of the LIBOR market.”
“To its credit, this month Goldman Sachs responded to the outcry when it agreed not to delay bonus payments in this country in order to gain from the lowering of higher-rate income tax in April. I think that was a good result. Sadly, not all companies have followed the example set by Goldman Sachs. For example, I am told that Tullett Prebon intends to delay bonuses until April. It is on this company’s board that the BIS Minister, Michael Fallon, used to sit. That is not a good example of best practice. As some noble Lords will know, my background is in IT. For all the faults of that industry, I think it is fair to say that instant gratification by way of monster remuneration is not the norm. By and large, it is about share ownership and share options. The late Steve Jobs was famously known for receiving an annual salary of $1 a year.”
“I know it is stating the blindingly obvious but it is the shareholders who own the company and it is they who risk their investment when they buy into a company, yet for too long they have been ignored. I have to recount a ghastly story about Goldman Sachs that I read some time ago before the financial crash. The story goes that senior management in that company in the United States would look at their profits, decide how much reported profit they needed to keep Wall Street and the shareholders happy, and then divvy up the balance between themselves. I do not know whether that story is true but I am sure that some people take that approach: that is, senior executives act as if they own the company and believe that it is up to them to decide how the pie is sliced, but that is not the way things should be done.”
“My Lords, in addressing this section of the Bill, I should like to say a few words. I am very conscious of the fact that this is most definitely not a Second Reading debate, but I want to give a little perspective before I get to the main issue. The amendment deals with directors’ remuneration, a subject which has had a lot of intense coverage in the media. Before we get to the nuts and bolts of the various amendments to which I have added my name, it might be useful if I set out some of the background to our thinking on this issue. I should say at the outset that we are very encouraged that shareholders, particularly pension funds and investment funds, are taking a much more proactive position on this issue.”
“The Minister said that consultation with the investment community showed otherwise, but for all of us who invest in companies, this is key information that we should have. I hope the Minister takes into account what I have said. I beg leave to withdraw the amendment.”
“I thank the Minister for that reply. I think we are not too far away in our philosophy and in what we would like to do in this section of the Bill. What we are suggesting would perhaps give the Bill a little more bite than it has at the moment. It is something we need to think about. My instinct is that we need to pursue these amendments. I shall say one thing in particular. I do not understand why non-financial companies are not part of this. If I were a shareholder, I would like to know this information, even if it were—to name one company—WPP, which is not in financial services. There are many companies out there that pay pretty massive salaries, and I do not understand why they should be excluded from this.”
“What the annual binding vote would do is ensure that whatever remuneration policy is chosen, shareholders have the power to hold it to account. I beg to move.”
“In this case, there was every indication that Vince Cable and the Government initially supported an annual vote, but then performed a U-turn once it became apparent that pressure had been applied to them by large firms—yet another example of this Government talking big and acting small. A Financial Times editorial piece on the subject said of directors: “Annual votes would at least put them firmly on the spot. Mr Cable’s triennial polls, however well-meaning and thoughtful, may not”. This is not to be confused with my party advocating short-termism. We believe that in many cases pay has been thought about with too short-term an approach. The triennial vote actually reflects that to a certain extent, as for many companies, three-year share options are thought of as long-term. However, that is for companies themselves to think about.”
“Having such a vote will ensure that executive pay is a matter that directors have to engage with regularly and will ensure that the issues around it are kept in mind. It would not be a difficult requirement to comply with, and I do not imagine that businesses will find much difficulty in doing so. This is because there are already many reporting requirements on an annual basis. Indeed the triennial approach, while a well thought-out idea, probably loses sight of that fact. The idea of a binding annual vote on pay has broad support. Indeed, it is again the case that the Government’s consultation in March seemed to suggest that it was their preferred approach.”
“Ten years later it had reduced to three months. It is probably even less today. With that in mind, shareholder protest should be reconsidered. If 40% of shareholders in a company combine to oppose a remuneration report, it is a hugely significant development showing a deep level of dissatisfaction with company policy. Indeed the Government’s consultation in March appeared to acknowledge precisely this problem. Under the proposed rules, however, it would be possible for a company to ignore the report. The amendment would rectify that. I want to address the question of an annual vote, which, of all the issues that I am addressing, we feel very strongly about. Our amendment is also about empowering shareholders. It proposes an annual binding vote for shareholders on a company’s remuneration policy, as opposed to a three-yearly binding vote.”
“In the past 10 years, FTSE 100 executive pay increased by 300%, while the FTSE 100 index has increased by 48% and, more devastatingly, fallen by 8.1% in the past five years. It is far more difficult for shareholders to organise today than it would have been in the past, mainly because ownership is so global. Indeed the Kay review into the effect of UK equity markets on the competitiveness of UK business pointed out that the increase in foreign ownership has made it much more difficult for a disparate group of shareholders to organise and collaborate. In 1981, the percentage of shares in UK-listed companies held outside the UK was 3.6%. Today the figure is 41.5%—a dramatic change. Shareholding is also often a much more short-term affair than in the past. In 1998, the average holding in US and UK banks was around three years.”
“While we welcome the changes, we feel that more could be done. In 2012, at the height of what became known, as the Minister said, as the shareholder spring, there were significant votes against directors’ pay, such as those at Aviva, Barclays and William Hill. The most memorable was the voting down of a 30% pay increase for Sir Martin Sorrell at WPP. However, from 2011 to 2012, there was an increase in executive pay to the tune of 12%. By comparison, the rate at which pay increased for everyone else averaged 2.8%. Only 12% of the country received a pay increase of more than 4%. Needless to say, there was no rise in share price to equate with that 12% jump in wages, and nor would one be expected.”
“My Lords, this group of amendments is about accountability. We will be going over some of the area we have discussed before, but some of the points need stressing. Again, the issue is about putting power back into the hands of the shareholders. Amendment 58BD, where we intend to change the word “ordinary” to the word “special”, talks about the type of resolution that would be necessary to get through any changes in the principle. We feel that a special resolution, which would be 75% of the shareholders, gives it a greater importance as far as the company is concerned and makes any changes to the principles of remuneration that much harder to make. The current arrangements for backward-looking votes have given some power to shareholders, but have not sufficiently empowered them.”
“I do not see any reason at all why there should not be an approval of directors’ remuneration principle and package; it should slot in: one; two; three. I am sure that is the correct way for it to be. It does not matter what companies want to do. It is what we should be telling companies to do, so that those who invest and are stakeholders in those companies can really understand what has been going on in the past 12 months. Having made those points, I beg leave to withdraw the amendment.”
“My Lords, I thank the Minister for his comments. We are perhaps a little further away from each other than we were on the previous amendments. As the noble Lord, Lord Razzall, said, it is some event when the TUC and the CBI come together on such a key issue, but we still feel that the annual side of this is an important issue. I shall deal with the special resolution and the 75%. It is part of what we are saying about the need for this issue to be treated as important. In the next round, we would probably want to keep it as it is, but I will think about it. As for the annual side, and the request that it stays on a triennial basis, every single year at annual general meetings a series of issues go through, such as the approval of auditors and accounts.”
“In effect, it never happened but it is one of the weapons that a company can use to dump shareholders and creditors. I put this down as something that I might come back to. I am not expecting the Minister necessarily to come back on any key points but I just want to make that point.”
“The effect of doing that is that the small creditors, which is the area that I care about because they are generally SMEs, and the small shareholders, get absolutely stuffed, because the company ceases to exist—and it then in its revised form continues with a different name and some of the same shareholders. They have an agreement with their banker. They have dumped all the toxic stuff into the river and moved on and started the company again. This does goes on; I have seen lots of examples of it happening. In fact, I am a minority shareholder in a company and there was a time when the majority shareholder was threatening to put the company into pre-pack, which would have meant me losing my shareholding. This was several years ago but I have experienced the threat of it.”
“My Lords, I had not intended to talk about what I am talking about now, but it is pertinent, particularly as the noble Lord, Lord Razzall, mentioned pre-pack administration. I would like to say a little more about that. Some pretty awful stuff is going on out there. Pre-pack administration is a situation in which a company is in trouble, particularly with its creditors, and is just about hanging on, when at the very same time some influential shareholders get together with a friendly administrator and say that they will put the company into administration. They suggest that the moment that it is put into administration there will be just a short period of time in which to sell it, then they will come in with company mark 2, which will buy the assets and business from the administrator and start up again, often with a very similar name.”
“My Lords, I thank the Minister for that reply. Today, this Government have been in office for 1,000 days: 1,000 days, and we are teetering on the brink of a triple-dip recession; 1,000 days, and the UK’s credit rating is close to being downgraded; 1,000 days, and our national debt is rising; 1,000 days, and our productivity is falling; 1,000 days, and our trade gap is widening. After 1,000 days, does not the Minister think that this Government should stop blaming the previous Government and start taking responsibility for their own failed economic policies?”
“We have to be right at the forefront in IT technology, but we cannot do it without superconnectivity. Can the Minister give your Lordships’ House assurances on this development?”
“Finally, we have had an announcement on HS2 and HS3, the first and second stages, and no doubt a major announcement on new airports will be forthcoming—if those in government can stop fighting among themselves—although, for the life of me, I cannot understand why it has to wait so long. Of course I know the answer, but why do party politics always have to take precedence over the national requirement? When the Labour Government left office, we were ready to unroll universal broadband to all households by the end of 2012, but the coalition Government failed to make-good this guarantee. As a result, 5 million people are still denied access to even the most basic broadband coverage. Millions of families and thousands of rural businesses are suffering as a result.”
“All these are now converging into a new and very exciting tech revolution, much of it powered by smartphones and tablet devices. Mobile computing is here to stay and is becoming as ubiquitous as the pen and pencil of yesteryear. In addition, we have been swept away in the use of technology. This country does more online shopping than is done in any other developed county. I end my speech today by asking the Minister a question that matters to the sector that I really care about. The Minister has been given the brief to speed up and manage infrastructure projects.”
“I would like to end by referencing my own area of business passion and that is technology. As some noble Lords will know, my whole business career has been in IT services, an area that I really care about. The Prime Minister seems to be captivated by technology, particularly the new business hub at Tech City. I am always sceptical about this. I have seen too many politicians who somehow think that they have become tech-savvy just because they can use the on/off button on their BlackBerrys. It is a lot more than that. We are blessed in this country, especially in London, in having all the constituent parts that are able to feed the new tech revolution—not just in IT but in fashion, media, advertising, pop music, and so on.”
“More than 40% of corporate debt in Germany is channelled through these local savings banks. What impressed me was the long-term commitment that these banks have to their business customers, often going back decades. They stand on the touchline cheering their customers on. What a contrast to banks in our country. How many small companies have even met their bank manager? How many loans are accepted or rejected solely based on an online application, with never a human being in sight? In Germany, when a company gets into trouble, it seldom comes as a surprise and, if a banker is close to his customer, he can make an assessment based on something more than a computer print-out. I know some people say that we have had enough banker bashing, but until I see banks offering a real helping hand to SMEs, I will continue to criticise.”
“Many believe that the commercial banks take a significant cut out of government programmes in order to boost their own balance sheets. It is all so complicated and so difficult to understand one programme from another. To me, it all smacks of insufficient thought. I believe that the Government are making a grave mistake in looking to the high street banks to deliver their programmes. The truth is that the banks have forgotten how to relate to the SME sector. Five years of saying no, of being sceptical, of consigning troubled companies to the intensive care unit, now means that saying yes is hard to do. Last month, I had the opportunity to visit the German Sparkassen banks. I know noble Lords are probably familiar with the German system, but what a contrast.”
“Employment figures have been pretty constant over the past five years and so too have export achievements. It has been large companies and the public sector that have shed their workforces. It should never be forgotten that SMEs contribute more than half of the UK’s GDP. This sector should be promoted and helped and it is here that I have some of my greatest concerns. It is absolutely true that this Government have spawned a multitude of financial initiatives to help SMEs. At one point, it seemed like a monthly occurrence that one programme or another was being announced to a baffled world. Although the Government may feel that they are doing well, the fact is that, in the SME sector, the situation is dire. No matter what programmes are announced, very little financial assistance seems to be getting through to the sector.”
“Our economy is static; our people are suffering; our businesses lack confidence; the banks are not lending; companies are sitting on piles of cash instead of investing; and our trade gap is widening. It is a total disaster, much of which could have been avoided were it not for the obsessions of the Chancellor of the Exchequer. My Front Bench brief is SMEs, an acronym, by the way, that I loathe. Combining small businesses with medium-sized businesses shows how out of touch people are. Small and medium-sized businesses have very little in common, except for the fact that they are not large. But as everyone else uses this definition, I guess I will have to live with it. Interestingly, SMEs have held their own during this economic crisis.”
“The facts in America, as they are in our own country, are that, when the financial crisis hit, the economy went into a tailspin, tax receipts fell and unemployment benefits rose. However, unlike us, the Americans held their nerve, re-invested and, as the economy recovers, the deficit as a share of GDP is falling. It is really easy economics to understand, so why does our Chancellor take a totally different position? If our economy were recovering, perhaps it would all have been worth the pain, but it is not. Everything is heading south. Indeed, in America, recent forecasts suggest that the federal deficit will be below 3% of GDP by 2015, a number that I am sure we, too, could live with. So, where are we on the 999th day of this totally misguided policy?”
“Indeed, the Nobel laureate Paul Krugman, in a notable column in the New York Times last week, totally debunked the deficit hawks in his own country. The United States did not pursue a policy of austerity, but instead chose stimulus through massive public investment while interest rates were kept at rock bottom. The result is that deficit and public spending as a share of GDP have started to decline of their own accord. Contrast this with George Osborne, who slashed public investment and raised taxes on families. In doing so, he has killed business confidence and growth and we know the result. The deficit has increased as a share of GDP and is up more than 7% on the equivalent period last year.”
“We are heading for a triple-dip recession—unheard of in modern times. It is no wonder that the Prime Minister was anxious to distract attention with his speech on Europe. I know that the Government get tetchy when my right honourable friend the shadow Chancellor talks about flat-lining, but with only 0.4% growth over the past couple of years, what else can we say? Noble Lords should compare this with Germany, which has experienced growth of 3.6% over the same period, or better still, the United States, where the figure is 4.1%. America is a very pertinent comparison. In many ways, the American economy and ours are parallel. Yet, while we wallow, the Americans are experiencing improving growth. There is no need to take my word for it. Noble Lords should look at the Dow Jones index, which is racing ahead.”
“My Lords, I am afraid to say—yet another businessman. It is getting rather dangerous. In many cases anniversaries mean little— just dates in the calendar—but sometimes they are useful moments to take stock. Tomorrow will be the thousandth day that this coalition Government have been in office and it is a good moment to take stock of the economy. I must therefore thank the noble Lord, Lord Deighton, for securing this debate. As one of his sponsors at his recent introduction, I feel that I bear a personal responsibility, because for him it is going to be very tough to defend this Government’s record. Any way we look at it, the scorecard on this thousandth day is lamentable. Last week, as has been mentioned by several speakers, we received the GDP figures for the final quarter of 2012. As we all know, growth was minus 0.3%.”
“My Lords, on behalf of these Benches I welcome the noble Lord to the Dispatch Box. Even though our politics are different, he and I both come from a business background, and both of us are from north-west London. We also shared the same profession when we studied at night school—we were both waiters. He worked on Kilburn High Street, I worked in Greenwich Village, and I bet I had the better social life. I want to come back to the BRIC economies—that is, Brazil, Russia, India and China. This country exports more to Ireland than we do to all those countries combined. I ask the noble Lord: what further action we can take to improve our exports to these BRIC countries?”
“Companies do it, particularly those in media and marketing, where young people are willing to sacrifice their pay just for the glamour. It also exists here, in this Westminster village. How many MPs and members of your Lordship’s House have unpaid young people working for them just so that they can put this placing on their CVs? It is wrong; it must change, and change quickly; and we should set the example. This digital age is presenting new opportunities in so many ways, but the most successful of all has been social networking. If we can use this technology to help solve the iniquity of youth unemployment, we will have achieved a lot.”
“They answer questions such as, “What is it really like?” and, “Can I believe what I’m being told?” Instant Impact places graduates with small and medium-sized companies—in particular, paid interns. I want to say a little about this before I finish. Competition for jobs is very high and every applicant is doing his or her best to make their CVs seem as interesting as possible. Internships really matter and the sad fact is that many young people believe that it is necessary to take unpaid positions just to show that they have a track record. Students doing holiday jobs are one thing, but people having to work for nothing is simply wrong. Many of the worst offenders are in the NGO or charitable sector. To be honest, charities that I have personally been involved in have also done this, so I am not without guilt.”
“It is free, so why is it not used by more young unemployed people? In my family two young people have set up companies, by coincidence, in the graduate recruitment sector. I need to declare this interest. First, my own nephew, Keren Mitchell, is a founder of the JobCrowd, and my son, Felix Mitchell, is a founder of Instant Impact. Both are relevant to these points. Sometimes family gatherings are interesting. The JobCrowd is the graduate recruitment equivalent of TripAdvisor, which provides anonymous references for hotels and restaurants. In this case, the site enables job applicants to get inside information from their peers who already have jobs.”
“Digital presence is very important, from the wording used in an e-mail to what they put on their Facebook page. Employers look on Facebook and it is not helpful if silly videos, or worse, are on their sites. CVs need to be better. I am associated with a wonderful organisation called the Amos Bursary, set up by my noble friend Lady Amos and her sister. This charity helps young black men find their way to full-time employment. For some of these young men, university can be very daunting, and for one reason or another they lack personal networks. Mentors can help. Social networking sites offer young people the opportunity to link in with the outside world. I believe that much more can be done. LinkedIn is a good example. Many of us use it and it seems to be geared to the professional classes, but why should it be just them?”
“I know it seems blindingly obvious, but those looking for a job need to know that they must turn up on time—indeed, before time—for an interview. To be five minutes late and flustered is unacceptable. They should look attentive and dress appropriately. Young people need social skills that may not come easily to them: how to present themselves and how to speak on the telephone. Most of all, they need to do their homework. In a world where information is so easy to come by, why is it that some interviewees do not research the organisation they are hoping to join? In my view, it is because the education system has failed them. Schools and universities need to do more in instructing young people how to prepare for job-seeking and interview technique. Young people also need to be aware of the perils of the digital world.”
“Some 87% of those surveyed suggested that candidates “like” a Facebook page of companies that they are interested in. I listened with interest to what the noble Lord, Lord Chadlington, said about his work on programmes to give school leavers the skills they need to go out and find a job. One area that needs to be addressed is personal presentation and interview technique. I know it seems old-fashioned, but too many young people do not have a clue how to present themselves. Even in the digital age, this matters. Maybe peer-to-peer contact would help. I want to address some of this as I proceed. My mantra on job applications is that you never have a second chance to make a first impression: so make a first impression.”
“There are downsides to this, of course, but there are also benefits. Equipped with digital skills, young people are in a better position to help companies, many of which are falling behind in their adoption of digital technology. One programme started last November in the United States catches the eye. It is called the Social Jobs Partnership, a collaboration between Facebook, the US Department of Labor and the National Association of Colleges and Employers. It uses five of the biggest job-listing sites in the United States to gain access to 1.7 million vacancies on Facebook and builds upon research from the National Association of Colleges and Employers which shows that companies want to use social media better to contact potential recruits.”
“That is not very impressive. I shall put it more strongly. The Government have a habit of announcing shiny new policies, each of which grabs a quick headline, but because they have been ill thought through they wither on their implementation. This is just another example. I must emphasise to your Lordships that, for my party, youth unemployment is very high up on the agenda. My right honourable friend Ed Miliband has said that the real jobs guarantee would give six months of paid work to anyone aged under 25 who has been out of work for more than a year, and that it would be paid for by a tax on bank employment. Social media provide opportunities for us to help find jobs for more young people. In today’s world, young people no longer get their news from print, but from their screens.”
“Given that long-term unemployment for the whole population stands at 1.3 million, we need to do everything we can to ensure that our unemployed young do not find themselves out of work for extended periods or even for the rest of their lives. The demise of the Future Jobs Fund is to be regretted, especially since the DWP impact analysis showed that for each person it contributed £8,000 to the economy. The Work Programme, which was designed by this Government to replace the Future Jobs Fund, appears to have been rather badly named because it is not a programme and it does not create very much work. Of the 785,000 people who have been referred to the programme, only 18,000 have achieved what could be a called a job outcome. Essentially, in its first 12 months, the Work Programme has placed only two in every 100 participants into work.”
“But the other side is slightly more reassuring. A whole generation has grown up with the skills needed in the 21st century. What we need now is to channel those skills. I contend that with better recruiting methods, the young unemployed can be matched with dynamic companies, particularly smaller ones. I turn, first, to the challenge. Currently, almost 1 million young people are unemployed in the UK, with 430,000 claiming jobseeker’s allowance. Of particular concern is the number of young people who are finding themselves in the very difficult position of being unemployed for a long period of time. Almost a quarter of a million are currently among the long-term unemployed, which is at its highest level since 1994.”
“The devices we first used were laptops and even desktops. They were heavy, expensive and, in the case of the desktop, clearly not mobile. Today we have a new world. Again, the iPad in front of me demonstrates how it has all changed and how the technology today fulfils the criteria we were seeking: powerful, small and mobile. When I read that over the Christmas period, iPads and other tablets were the hottest consumer presents, it comforts me that the objectives we set at the e-Learning Foundation are now close to being met. In a few years’ time, no young person will be without a tablet, much the same as very few are without their smartphones. When we come to youth unemployment, it seems that there are two sides to the picture. First, as the noble Lord, Lord Chadlington, has already stated, it is an extremely discouraging situation.”
“Today, this iPad that I am reading from at this very moment has many thousand times the power and internal storage memory of those massive machines—and I can fit it into my briefcase. In 2000, when I was first introduced into your Lordships’ House, I founded a charity called the e-Learning Foundation. Its remit was to ensure that every school child in this country had their very own computing device which they could use at school as well as at home. We thought then that the computer should be as ubiquitous as the pencil and we recognised that, in the 21st century, IT skills were critical. Most of all, we were concerned about the problems associated with the digital divide, which the noble Lord, Lord Ramsbotham, has just mentioned, that occurs when the population is segmented into those who are IT literate and those who are not.”
“My Lords, I, too, will start by thanking the noble Lord, Lord Chadlington, for securing this debate. Youth unemployment is an incredibly important issue, and it is to his great credit that he raises it today and has spoken so knowledgeably and passionately on this subject. I will also pay tribute to the work he has done in equipping school leavers for the jobs market. I would like to set out my own background in this area because it is pertinent to what I have to say. I have been involved in information technology for most of my adult life. I started my business career in an environment where data were stored on punch cards and massive mainframe computers were water-cooled.”
“A tech company, for example, could have a low turnover but a high market share, particularly in a locality, and as a result the CMA might want to take a look at a merger between it and a dominant company in that market, or there could be some form of geographical dominance. I find myself sympathetic with the thinking behind this because, as far as I am concerned, the more competition the better at all times, and I am also sympathetic with keeping red tape away from small businesses. However, it appears that when it comes to mergers, such protections are already offered, and this amendment could damage something even more important to SMEs—a strong competition environment. We definitely want to think about what has been said today; some important points have been raised. We will wait for the next round at Report.”