Audit and Corporate Governance

Lord McKenzie of Luton Excerpts

Tuesday 23rd March 2021 Lords Chamber

[Lord Callanan (Con)]

The impact assessment, in fact, includes examples of quantifiable benefits that will be refined and developed in further iterations of the impact assessment. I agree that shareholders have a vital role in holding companies to account and the White Paper gives them important new tools to scrutinise audit and corporate reporting.

[Lord McKenzie of Luton (Lab) [V]]

My Lords, from what we have read in the Sunday papers, this is a timely topic for debate and reporting on a long line of corporate failures, going back to Polly Peck, BCCI, Barings, Northern Rock, RBS, Carillion, BHS and, doubtless, many more. Throughout that time the audit market for major companies has been dominated by a few private sector accounting firms—now reduced to four. There is an urgent need to address the quality and effectiveness of audit. I presume that the Government support the proposals for a new profession of corporate auditors. What discussions have taken place with the profession itself on those proposals?

[Lord Callanan (Con)]

Indeed, I have had extensive engagement with the profession, including the big four and a number of smaller companies, as we seek to progress the legislation.

Trade Unions

Lord McKenzie of Luton Excerpts

Thursday 18th July 2019 Lords Chamber

[Lord McKenzie of Luton (Lab)]

My Lords, I congratulate my noble friend Lord Jordan on introducing this debate and on the powerful way in which he expressed the issues. It is welcome to hear about trade union matters in this Chamber; they do not feature enough in our deliberations. I declare my interest as a member of the GMB—although I confess that Price Waterhouse did not have many shop stewards from that union. I shall speak today about health and safety and the vital role which trade unions play in its functioning. I have another confession: it was not until I had the role of Minister for Health and Safety that I really engaged with trade unions for the first time and better understood what they were about.

As our briefing describes, and as other noble Lords have said, health and safety is one of a range of issues where the ILO sets international standards which should be agreed by representatives of the world’s Governments, employers and workers. However, these are basic minimum labour standards—a floor of rights, as my noble friend said. They can be distinguished from EU regulations, which must apply to all EU member states and can be enforced by the Commission. There is an expectation that countries such as Britain should have no difficulty in meeting the ILO requirements and should seek to go beyond them. Unfortunately, I understand that this is not the case and we have refused to ratify a number of conventions which, according to the TUC, include ones relating to asbestos, home workers and occupational health. Will the Government itemise all the conventions not yet ratified, together with the reasons why not? To what extent are these covered by EU regs or other provisions?

The engagement of trade unions on health and safety is of course focused on occupational safety. There is a wider agenda concerning road safety, accidents in the home and leisure pursuits. I am aware that my noble friend is also strongly committed to addressing these matters through his distinguished service with RoSPA.

Great Britain can point to a strong record on occupational safety—we have heard some of the statistics—which is in many ways the envy of the world. Workplace fatalities have fallen by over three-quarters in recent years, but there is still much to do, which is why we continue to need strong trade union engagement. The stats are: 147 workers killed at work; 1.4 million people at work last year suffering from a work-related illness; 2,523 people died from mesothelioma, and thousands more from other occupational cancers; some 70,000 injuries reportable under RIDDOR; 30.7 million days lost due to work-related ill-health; and £15 billion as the estimated cost of injuries and ill-health from current working conditions—so there is much to do. Of course, these matters must be measured not only in terms of pounds or euros but in terms of individual lives blighted and aspirations dashed. However good things are in comparison, we should hold in our minds that 147 people who left home for work last year did not return to their family and friends at the end of their shift.

Since the Factories Act 1937, there has been a general consensus on the need for robust health and safety legislation. Indeed, when Lord Robens produced his seminal report on health and safety, one of its key underpinning tenets was the belief that the involvement of the workforce was crucial to achieving good standards of health and safety. This was reflected in the Health and Safety at Work etc. Act 1974, which gave legal backing to union safety reps. Numerous studies have demonstrated that worker participation, supported by trade unions, is a major factor in reducing injuries and disease at work. In the late 1990s, a group of researchers identified that employers with trade union health and safety committees had half the injury rates of employers who managed their own.

One of the reasons why unions make a difference is that they seek to ensure that safety reps are properly trained, as they do for member-nominated pension trustees. This is sometimes provided on a joint basis with employers. Concerns have been expressed, however, about ineffective consultation processes which miss out on opportunities to draw on the practical expertise of trade unions.

Trade union facility time and facilities are, as we know, negotiated with employers so that trade unions can carry out their duties. Union reps have had a statutory right to reasonable paid time off since 1975; this is governed by the ACAS code of practice. However, in recent times this became a bone of contention as part of the increasing negativity towards trade unions coming from sections of the Conservative Party. We had a Prime Minister, no less—David Cameron—who talked about health and safety as an albatross around the neck of business, although the reality clearly belies this. The Department of Business, as it was then called, assessed the contribution of union reps to improved business performance. It found that savings to employers and the Exchequer from reducing the number of employment tribunal cases ensued; that fewer working days were lost because of workplace injury and work-related illness; and that there were reduced recruitment costs and an increased take-up of training. A TUC survey found that over half of responding HR professionals considered trade unions an essential part of modern employer-employee relations.

The knowledge of trade unions and their members has been brought to bear in developing approaches to some of our more dangerous industries such as construction, agriculture and waste management. My noble friend Lady Donaghy made a significant contribution to the first of those, which has stood the test of time.

Trade unions are not just about ensuring that regulations are in good order. They are nothing if not campaigning organisations: campaigning to expose risks of asbestos, particularly in schools; joining with others to highlight the continuing risks of carbon monoxide; and seeking to ensure that proper compensation is available where harm is otherwise going uncompensated, including effective tracing of employer liability insurance policies. It took too long but, eventually, with the help of the noble Lord, Lord Freud, a proper payment scheme for sufferers of mesothelioma was established.

Trade unions have been practical universities, which has given an opportunity to countless individuals to play a part and serve over the years beyond their union, on a wider platform, whether nationally, in Europe or sometimes in periods of great national crisis. We should value this service and the organisations that enabled it.