Transparency in UK Company Supply Chains (Eradication of Slavery) Bill

Jacob Rees-Mogg Excerpts

Friday 19th October 2012 Commons Chamber

[Jacob Rees-Mogg (North East Somerset) (Con)]

The hon. Member for Linlithgow and East Falkirk (Michael Connarty) has brought forward a noble Bill that, in its intention and motivation, is of the highest standards this House ever reaches. As he said, it continues in the tradition of Wilberforce’s campaign to eradicate the slave trade and then slavery throughout the British empire. I believe that the Act of Parliament that finally eradicated slavery throughout the empire was passed three days before Wilberforce’s death, so he was able to see that moment.

I hope that it will not take quite so long for this Bill to be passed and that the hon. Gentleman will see very many years go by after his aim of getting slavery taken out of the practices of multinational companies has been achieved.

As a general rule, I am not in favour of imposing extra regulations on business. We need to have a competitive and free market with companies that can trade. I am very suspicious of fair trade as against free trade. Fair trade often means protectionism by another name—choosing one’s preferred people as opposed to those who are most competitive—and cutting out the poorest in favour of those who are good at filling out bureaucratic forms. We should always be careful when we consider doing anything that might encumber free trade or put burdens on business. We must remember that when burdens are put on business, it is not the profits of the multinationals that suffer but the electorate—often the poorest of our electorate—who find that their prices go up.

Within any advocation of free trade there must be some limits. The hon. Gentleman mentioned the proud Christian tradition of opposing slavery in all its forms. Going back to my O-levels, I remember studying the letter of St Paul to Philemon, which sets out the Christian case for opposition to slavery. In the Roman empire, slavery was perfectly legal and legitimate. There was no reason to oppose it; it was part of the status quo. The young, burgeoning Christian community lived within that—they had to. They were persecuted enough already without taking on one of the foundations of the Roman empire. St Paul, writing in prison to Philemon, who is a Christian, about his slave who may have escaped, tells him to treat Onesimus as a Christian brother, not as a slave—not as a piece of property but as somebody of worth and value equal even to a Roman citizen. That has set the path, followed by Wilberforce and others, to ensuring that as a nation we have done whatever we can for the past 200 years—after a pretty shameful history beforehand, it has to be admitted—to ensure that slavery is not part of the system of global trade and not something from which British companies profit.

So what is the right level of burden to put on companies—multinationals—that are facing this problem? First, there is the question of their own consciences. Before legislating, we should always see whether companies already take the view that something is fundamentally wrong and has no place in their supply chains. That is a good starting point. With the growth of international trade, many big companies will have major intermediary suppliers. They will not deal with thousands and thousands of small suppliers across the globe but have intermediaries they are able to go to. Those intermediaries should be able to assure the companies that they themselves do not use any improper forms of labour—slaves or children—in the production of the goods that are sold.

We then need to go to the next stage and look at the companies that are supplying to the intermediaries. There may be many thousands of companies, some of which are very small or in very remote parts. My professional background has been in investing in emerging markets. While I have been doing this, the number of emerging markets that have come into the investable framework has been growing. Countries of extreme poverty are now beginning to come into the global system, and auditing them efficiently and properly would be a pretty onerous task to put on to businesses. However, in relation to slavery, it is almost certainly a right and moral one for us to adopt.

The situation that companies will face is one that I have faced as an investment manager in looking at the companies that we invest in for our clients—that is, going to visit them to ensure that their practices are proper. I confess that in one of my company visits I was suspicious that the company did indeed use child labour. The business was a very attractive one, but I thought that my clients, and the pension fundholders they represented and the charities they served, would be appalled to be making money on the backs of children. The individual conscience of company managers and investment managers is an important starting place, which I think helps to achieve the objective behind the Bill.

The question then remains, what are we to do about people who do not have any conscience? Is legislation appropriate, right and proper? There may come circumstances in which that is the case. Perhaps this is more a point for a Committee speech than for a Second Reading speech, but I believe the Bill needs some adjustment to achieve what it is intended to. That is partly because it is trying to do a bit too much. I would prefer it to concentrate purely on the issues of slavery and child labour, which are specific and clear. Other issues can be harder to define and can therefore place a more difficult burden on companies. I hope that the Government will consider the matter seriously and see whether there is something they can do to ensure that the required standards are met.

[Mr Harper]

My hon. Friend may not be aware that just yesterday, colleagues in the Department for Business, Innovation and Skills laid draft regulations that will ensure that as part of their narrative reporting, quoted companies will have to report on any human rights issues necessary to understand their business. Perhaps we can achieve the necessary reporting standard through that avenue without the burden of the Bill.

[Jacob Rees-Mogg]

I am grateful to the Minister, and I take this opportunity to welcome him to his new post. He is the most civilised of Ministers in the Government, and I am glad that he has moved, because when he was in his last post I opposed practically everything that he did. I sincerely hope that I will now be able to support him more often. In reference to the Board of Trade’s action, the term “human rights” does not necessarily have a very good name in the House. I am slightly cautious of it as a generic term when we have a pretty awful Human Rights Act and a European Court that often gets the wrong end of the stick. There are fundamental principles of humanity in the Bill that we are discussing, not just the woolly words “human rights”. So I am sort of grateful for what the Minister says—more grateful than for a lot of what he said about the constitution when he was the Minister responsible for it—but perhaps not fully grateful.

The Government need to take up the running and take the matter out of the hands of a private Member’s Bill, which cannot necessarily be given the time and resources it needs so that we can get the phraseology as tight as it ought to be. They should find the parliamentary time to introduce a detailed Bill, which could be used to ensure the correct balance between burdens on business and benefits for people at risk.

There is also a twofold economic argument for such a Bill. The hon. Member for Linlithgow and East Falkirk alluded to the first part of it, which is that companies that fail to follow the basics of humanity will be embarrassed in their marketing. They will be brought to shame in front of the nation if it is discovered that they are using child labour or slave labour in the production of their goods. That will bring the crack of the economic whip on their profits, which is a very good means of ensuring that companies behave better.

The other point that is worth making is that companies that treat their employees well tend to be more profitable and successful. Sometimes they are very large employers. I have spoken to Hon Hai, which employs more than 1 million people and is one of the biggest suppliers to Apple. It finds itself employing so many people that it provides an almost governmental style of welfare for them, because it is in its own interests to do so. If it is to employ such large numbers of people in an environment in which there will inevitably be difficulties and disputes, it needs to take care of its employees in the round rather than simply getting the maximum out of the cheapest individual employee.

There is also the argument that if companies move away from child and slave labour, they will be able to mechanise more easily and therefore be more productive and efficient. There is a good argument, which has long been known, about the inefficiency of slave labour. The financial incentive that we talk about when discussing tax rates applies to people in routine jobs in poor countries just as much as to bankers in the United Kingdom. I have no doubt that there are robust economic reasons for wanting to avoid slave labour, and robust moral reasons as well. It is important—the mood of the House is almost certainly along these lines—that the Government should take the matter up.