Modern Slavery (Transparency in Supply Chains) Bill [HL]

Baroness Butler-Sloss Excerpts

Friday 8th July 2016 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I cannot resist commenting on the speech of the noble Lord, Lord Cormack. First, public Bills put forward by government nearly always need amendment; it is unfair to single out Private Members’ Bills. Secondly, I would support any action the noble Lord takes to abolish acronyms. I spend my life having to ask people what on earth various letters mean, so that would be brilliant. However, I do not agree with his comments about the Bill’s Title, because the noble Baroness, Lady Young, whom I congratulate very much on bringing this timely and necessary Private Member’s Bill forward, quite rightly followed the wording of the Modern Slavery Act in that respect. If I may respectfully say so to the noble Lord, it would be madness to go out on a limb when we have the wording that is already in the Modern Slavery Act, and this Bill is intended to be a very necessary improvement to that Act. The Modern Slavery Act is a very good Act and I share the noble Lord’s view that Theresa May is much to be congratulated on having courageously brought it forward. We are all very indebted to her for the Modern Slavery Act, on which I worked. Noble Lords know that I am much involved in modern slavery elements in both the parliamentary group and the Human Trafficking Foundation.

The Government are to be congratulated on the innovative supply chain requirement in the Modern Slavery Act. However, I wish to make two points. First, a good Act can always be improved. I cannot see why, in principle, the Modern Slavery Act applies to large private companies and not to government procurement, government agencies and local government. An example is procurement by the Ministry of Defence, which is absolutely enormous. There can be no good reason in principle why the Ministry of Defence should not have a similar, but not necessarily exactly the same, requirement as private companies. Why on earth should the Government not have a similar requirement to independent companies to have this transparency made absolutely clear?

The big companies gave evidence to the Modern Slavery Bill pre-legislative scrutiny committee. They were entirely happy to have transparency but they asked for—and I use the phrase that the noble Baroness, Lady Young, used—a level playing field. They did not ask for government procurement to be included but it must have been in their minds. I cannot see why the Government cannot lead and show the world that not only do they expect private companies to do this, but they themselves will get involved. That would be wonderful message not only for the United Kingdom but around the world. I spent some time at the Vatican quite recently, explaining to 22 other countries what the Modern Slavery Act was about but I was not able to say that the Government were intimately involved in this very important part of it, which many other countries are interested in.

I do not think the noble Baroness, Lady Young, would be at all embarrassed by my saying that it is quite clear that Clause 1(2) could be improved, in particular to include—regarding the second issue I want to deal with—what sort of statement should be provided. We could look in Committee at providing a way that would be acceptable to the Government. The fact that this may need to be changed does not mean that we should not have it; that it the really important point of this Bill.

My second point, therefore, is that at the moment there is absolutely no way that we can tell whether companies are obeying the law and making the appropriate return under the Modern Slavery Act. We do not know which companies are obliged to make the return; we have no idea. There is no one to report to. It is very unsatisfactory to have a law where one does not know to whom it applies and whether those to whom it applies are complying. It is an extraordinary situation in the state of law.

There are various ways in which this could be remedied. One could have a requirement to file with Companies House, or a government department could compile a list of companies to which the public have access. I understand that the Government are likely to say that this would be extremely difficult and that it would change all the time, but if the Government bring in legislation that requires companies to comply, they really also ought to be able to know to whom the law is applying. I therefore do not see that that is a very good argument. A government department—not necessarily the Home Office—could receive statements sent officially by a company. We could have a genuinely independent, properly managed website—if one could find it; I take the point of the noble Baroness, Lady Young, about the various organisations offering what look to be really spurious suggestions of how they would manage a website, which would be to their financial advantage. I would be very unhappy about that.

I am particularly worried about not only the big companies that have to give this information but the extent to which they are able to manage and scrutinise the work of their subcontractors and the agents who have other subcontractors over whom the company that sells the product does not have proper control. This is an aspect we need to look at. We need to encourage companies to do due diligence, not just at their own level and that of their subsidiary companies, but at the level of their subcontractors who provide them with the goods that they sell.

There is of course an argument about the burden of regulation but it was, in my view, utterly destroyed in the Joint Select Committee on the Draft Modern Slavery Bill by the biggest of the companies that came to talk to us saying that it did not object to doing this. Interestingly, John Lewis, for instance, has a document that shows that it is complying with human rights, which is of course already a requirement for companies, and is putting a requirement to deal with modern slavery in that same document. That seems a perfectly sensible way of doing it but it may not suit other companies. So the burden of regulation is not a good argument. I do not think that it matters which way companies do it, so long as it is set out in a company document that is the responsibility of the main board and not of someone subsidiary. We need a consistent approach by industry, including government procurement. The wording of Clause 1(4) could be improved; it does not need to be in an annual report and accounts so long as it is in an appropriate document. Business could probably tell us what would be the more appropriate phraseology to use.

I end by saying that, next Wednesday afternoon, the Human Trafficking Foundation will hold a meeting to talk about transparency in the supply chain, at 5.30 pm in Committee Room 3. We will be discussing what large companies are expected to do and among the companies coming are John Lewis, Primark, Tesco and the British Retail Consortium. Am I really going to have to say to them that we held this debate, thanks to the noble Baroness, Lady Young, and that, at the end of it, the Government resolutely refused to have anything to do with it and were not prepared to involve government procurement as part of what big business is expected to do? That would not, I suspect, go down very well next Wednesday.

--- Later in debate ---

[Lord Keen of Elie]

I am obliged to the noble Lord.

The noble Baroness, Lady Hamwee, raised a number of issues. One of them was how we identify those corporate entities or partnerships that have an obligation under Section 54. The obligation was designed to coincide with the definition of large companies under the Companies Act in the context of registration. I am not saying that that takes us very much further forward, but there is at least a litmus test that one can have regard to in that context. I do not seek to ignore the other points that she raised, but I hope I have covered them in the course of this reply.

The noble Lord, Lord Kennedy, asked about public bodies. Again, if I may, I repeat that they are subject to a parallel provision—albeit not identical, for obvious reasons—and that is being developed under reference to the code that I mentioned before.

In conclusion, I thank the noble Baroness, Lady Young, for raising this important topic. The Government have listened and reflected carefully on the topics raised by her Bill. We are determined to lead by example on this issue and do everything that we can to prevent modern slavery in both the public and private sector supply chains in this country, and indeed overseas. While the Government are not persuaded that further legislation is the right approach at this stage, we welcome the ideas in the Bill. We will want to examine some of them in more detail and, as I have said before, I will be happy to meet with the noble Baroness again to do so.

[Baroness Butler-Sloss]

Before the Minister sits down, may I ask two questions? First, as I understand it, it is being suggested that in the public sector the human rights requirement meets what is needed for modern slavery. If that is correct, why on earth was it necessary to have a modern slavery requirement for the private sector? Secondly, it is all very well for the Secretary of State to have the power to go to the County Court, but what he needs to know is, first, who the companies are and, secondly, whether they have in fact not complied. From what the Minister has said, I do not understand at the moment how the Government are going to find either of those points.

[Lord Keen of Elie]

On the first point, the private sector is not subject to Section 6 of the Human Rights Act 1998, which is what I sought to explain earlier. On the second point—

[Baroness Butler-Sloss]

The independent private companies are also caught by the Human Rights Act under the current legislation because they have to do a human rights report every year. I do not quite understand why the Government think that that is good enough for the Government but not for private companies.

[Lord Keen of Elie]

As I say, the public sector is subject to Section 6 of the Human Rights Act; that was merely one aspect of my explanation as to why it was not considered appropriate to extend this legislation to the public sector. The other issues concern the Public Contracts Regulations 2015 and the codes and guidance that apply in that context.

As regards the Secretary of State having resort to the courts to bring a penalty, we will see consumers, NGOs and peer pressure bringing out the question of who is complying and who is not. I will give one simple example. If a retailer on the high street discovers that their competitor is retailing T-shirts at 50p each when they know perfectly well that they cannot be produced for anything like that sum, and they persist in doing so, they will detect that something is amiss. As the large corporate retailers observed in the consultation period, they want a level playing field and their one way of doing that is to ensure that their competitors comply with Section 54 and, if they do not, to bring that to the attention of the Secretary of State.