Investment Industry Exposure to Modern Slavery

(Limited Text - Ministerial Extracts only)

Tuesday 26th October 2021 Westminster Hall

[The Parliamentary Under-Secretary of State for the Home Department (Rachel Maclean)]

It is a huge pleasure to be here serving under your chairmanship, Mr Robertson. I very much thank my hon. Friend the Member for Grantham and Stamford (Gareth Davies) for securing this vital debate and for bringing with him a wealth of experience from his distinguished career in the investment industry, which informs us all and helps us all to move further.

I also thank my predecessor, my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley). I really do feel that I have very big footsteps to follow in. I thank her for all her work in bringing the world-leading and groundbreaking Modern Slavery Act 2015 on to the statue book. Without her work, I certainly would not be here today talking about this subject, and it is absolutely right that we are. Thanks to her work, and that of others, last week we were able to mark Anti-Slavery Day and reflect on the trauma that victims suffer, the cruelty of those who exploit them and the bravery of survivors attempting to rebuild their lives. That was also a moment to reaffirm our commitment to confronting the evils of modern slavery, wherever and whenever they occur. They are utterly appalling crimes that have no place in our society. I very much welcome the interest shown by my friends today, including the hon. Member for Strangford (Jim Shannon), so that we can stamp out these crimes.

It is nice to pause and reflect on what we have already done as a Government. We have taken some very important strides forward in recent years, but of course there is more to do. These crimes continue to evolve and we must continue to evolve. As my friends have said, modern slavery is a global problem. We continue to provide global leadership to tackle it. During our G7 presidency, G7 members agreed to joint action on forced labour in global supply chains, and reaffirmed their commitment to upholding human rights and international labour standards. That is why we continue to invest heavily in tackling modern slavery. We have funded a new five-year modern slavery victim care contract to support victims to rebuild their lives. That new contract is worth £379 million over five years and will deliver a much-needed service that is based on need and better aligned to the requirements of individual victims. As we know, victims present with incredibly complex needs, and it is right that we have the support tailored for them.

The Home Office has invested a further £1.4 million this year to support the police’s response to modern slavery, bringing the total investment in policing to £15 million since 2016. That funding in the round has helped us to pursue perpetrators and drive an increase in modern slavery investigations and operations. Following our recognition that the nature of modern slavery has evolved over the years, the Home Secretary announced a review of the 2014 modern slavery strategy, which builds on the considerable progress, by adapting our approach and maintaining our position as an international leader in this area.

We will publish a new strategy next spring, which will set the strategic direction for years to come. Through the Modern Slavery Act 2015, the UK became the first country in the world to require businesses to report on the action they were taking to address modern slavery risk in their operations and supply chains. That legislation acts as a call to action for businesses, investors and the international human rights community—no doubt the businesses that my hon. Friends were involved in before they brought their expertise to this place.

Following the recommendations of the independent review of the Modern Slavery Act and a consultation, the Government committed to introduce an ambitious package of measures to strengthen our world-leading legislation on transparency in supply chains. We will extend the reporting requirements to public bodies, to leverage public procurement and address risks in public supply chains.

We will mandate specific reporting topics that statements must cover, set a single deadline for reporting, require organisations to publish their statements to a new Government registry for modern slavery statements, and introduce financial penalties for organisations that fail to meet their reporting obligations. Those changes require legislation, but I want to reassure colleagues that this Government remain committed to legislating on modern slavery and will implement the measures as soon as parliamentary time allows.

In addition to the changes we have already committed to make, we will consider our future approach to transparency in supply chains, as part of our modern slavery strategy review, including how we can best utilise the unique power—and pockets—of the financial sector, to tackle modern slavery.

Let me now turn to some of the specific points referenced in the debate. Individual organisations must focus on preventing harm in their practices. We do not believe that physical remoteness or being several steps away from the supply chain is an excuse. Investors do need to hold their organisations to account, as my hon. Friends so eloquently set out. People who are saving for their pensions or retirement should not be exposed to criminal activity.

I am grateful for all the work done by my hon. Friends the Member for Grantham and Stamford and for Totnes (Anthony Mangnall). Through their convening power, they have brought together financial institutions and organisations. I am also grateful for the work of the Independent Anti-slavery Commissioner, highlighting the role that the financial services sector has to play. It is clear that there is more to do, but investors can help to drive this change by fully harnessing their leverage. I highlighted that message this week at a meeting jointly hosted by the Home Office and CCLA, a fund manager, to discuss how Government, businesses and investors can work in partnership to tackle modern slavery. There are some really good examples of investor-led initiatives, with investors taking collective action, such as the CCLA-led Find It, Fix It, Prevent It and Rathbone’s Votes Against Slavery project.

However, we know that there is more to do here. While I am encouraged by the positive initiatives already under way, we need to make sure that we continue on the right track and that investors scrutinise their investment portfolios to engage and challenge companies on their response to modern slavery.

As hon. Members have said, when it comes to those environmental, social and governance issues, we know that businesses and investors have responded well to the environmental challenges they face. As we look to accelerate progress on tackling modern slavery, the Home Office is working with investors to understand what more we can do to encourage and incentivise businesses and investors to place the same emphasis on social issues. This issue is now, rightly, rising up the agenda.

[Jim Shannon]

I thank the Minister for her excellent response. Minister, last week in the press over a hundred MPs had signed a petition and a letter of concern about investment in Chinese companies, some of which are using Uyghur Muslims as slave labour. Is the hon. Lady able to give us any guidance on how we can take that further to try to make that stop?

[Rachel Maclean]

I thank the hon. Gentleman for that. It is an egregious example of abuse of human rights; just because it is happening overseas does not mean that we should turn a blind eye to it. We in the Home Office are looking closely at all of these issues as part of our review of the modern slavery strategy. I would be very happy to continue in discussion with the hon. Gentleman to provide further reassurances on what can be done. However, I want to make very clear from this Dispatch Box that companies have a responsibility to their consumers and shareholders to do the right thing and not enable slavery in the pursuit of profit.

As we look to accelerate progress on tackling modern slavery, it does seem very challenging. However, we do know that the business and investor community has taken huge strides, and it has succeeded in making better, more informed green choices. We should hold and demand those same expectations for modern slavery. We should not walk by. We should not ignore the crimes that are hiding in plain sight.

My hon. Friend the Member for Grantham and Stamford called for the legislation to be extended to financial services so that they address modern slavery in their investment portfolios. I have taken close note of that. Legislation is important, but it is not the only factor driving responsible behaviour. Many organisations already report voluntarily under the Modern Slavery Act and publish modern slavery statements. I would strongly encourage any responsible organisation to do the same, and I would encourage shareholders and consumers to ask those questions about where they are putting their money and their investment.

I have noted very carefully the points that my right hon. Friend the Member for Staffordshire Moorlands and my hon. Friend the Member for Totnes made. I reassure them that we will consider extending the scope of section 54 as part of our strategy review.

In closing, let me once again express my thanks to my hon. Friend the Member for Grantham and Stamford for securing this debate on such an important subject. It is a real tribute to him to have brought forward a debate on a topic that is sometimes hidden, but should not be. I thank him for shining a light on all the work that the Government, many NGOs, my right hon. Friend the Member for Staffordshire Moorlands, the Anti-Slavery Commissioner and many others are doing. Modern slavery is utterly abhorrent, and I can assure hon. Members that this Government remain steadfast in our determination to root out such crimes, protect the vulnerable and support victims.

Question put and agreed to.