Business Standards

John McDonnell Excerpts

1st reading & 1st reading: House of Commons
Wednesday 30th September 2020 Commons Chamber

[John McDonnell (Hayes and Harlington) (Lab)]

I beg to move,

That leave be given to bring in a Bill to establish an accreditation scheme for businesses that meet standards regarding the treatment of workers, the payment of taxes and environmental practices; and for connected purposes.

The pandemic has made us all think about what we value in life and reassess how our society and our economy operate. Of course our main focus has been on how we tackle and get through the pandemic, but there has been a view expressed by many, including the Prime Minister, that lessons should be learned from the crisis, and he and others have said that, as we come through the pandemic, we must build back better. This Bill is part of that process of building back better. Within our economy the pandemic has exposed much of what is good but also, regrettably, some of what is just not acceptable. I want to cite some examples of companies such as Warburton’s and Richer Sounds, and contrast them with British Airways and Amazon.

Two years ago, the bakers’ union and Warburton’s secured a groundbreaking agreement. It provided the workers with job security, ongoing skills development and better wages and conditions of employment and, as the company and the union both said, put people at the heart of the business. The agreement provided the company with the skills and flexible working needed to compete in a tough market. To deal with the crisis, the company has set up a safety committee, involving union reps, to monitor and review safety, and Warburton’s has paid company sick pay to all those shielding—all those who need to isolate. Or take Richer Sounds, whose owner, Julian Richer, has promoted a good business charter and shared its ownership with its employees. Now they are working hard together in a tough environment to preserve jobs while paying a decent level of sick pay to workers shielding. Of course it is tough, but people are working together to get through as best they can.

Contrast that with boohoo. A recent independent report uncovered, in its supply chain factories, people working excessive hours on illegally low pay of £3.50 an hour, working without face masks in cramped conditions that were described as “life-threatening.” Or take British Airways in my constituency, which has taken taxpayers’ money for furloughing and drawn upon Government lending facilities, while it has used the crisis to introduce a policy of fire and rehire to cut wages and undermine terms of employment, and while its parent company IAG is buying up competitors and awarding its outgoing chief executive £800,000 in a golden goodbye.

Or take Amazon, notoriously exposed this month in another independent report for its oppressive, intensive working practices and for endangering warehouse workers put at risk of contracting covid-19, and then retaliating against the workers who spoke out against those working conditions. A fortnight ago, it was revealed that Amazon paid only £290 million-worth of tax in the UK, despite a 26% surge in its sales, up to £14 billion.

If we are to learn the lessons and build back better, as the Prime Minister has urged us to, we need a system that recognises and celebrates good practice in our economy, and one that certainly does not lend support to those that fail to live up to basic business standards and undercut others that do. This Bill seeks to introduce a system for exactly that by accrediting businesses on their behaviour in a number of key areas: the treatment of their employees; their impact on the environment; and their payment of taxes.

The aim of the accreditation process is to enable the acknowledgement and celebration of good business practice and good businesses. At the same time, it will provide the basis for judging whether a business is upholding its responsibilities to its employees and the community.

It is proposed that an independent good business commission should be established, on the model of the Low Pay Commission, comprising representatives from businesses, trade unions, the major environmental voluntary organisations, and the tax justice campaign. The good business commission will have responsibility for determining the criteria by which a business will be assessed as a good business: its employment practices, its environmental policies and the payment of its taxes.

The intention, of course, is that businesses would be encouraged to seek accreditation. The award of good business status has the potential to significantly enhance the reputation of a business and confidence in its standing. The failure of a business to apply for accreditation, or to achieve it, would tell its own story.

In determining good business practice, the good business commission would examine, on employment, for example, whether the business recognised a trade union, paid a real living wage, banned zero-hours contracts, had gender pay parity, addressed equal-pay gaps for all protected characteristics, provided for worker representation on the board, or had a pay ratio between the highest and the average paid. It would assess, on environmental impact, whether the company had adopted a strategy for achieving net zero emissions within 10 years, and on tax, whether the company was paying its taxes or whether it was engaged in the use of tax havens and clear tax avoidance schemes.

The Bill also charges the good business commission with bringing forward proposals for how the business accreditation scheme could be used to incentivise compliance with good business practice and so establish thresholds on business standards that would determine access to Government financial support and tax reliefs—thresholds that would be capable of being drawn upon by other bodies in their award of support, access or status to businesses, such as listing on the London stock exchange.

During the covid pandemic, the Government have introduced a number of schemes to support businesses to cope financially with the downturn in the economy resulting from the lockdown and social distancing protective measures. Across the House, we have welcomed those schemes; sometimes we have argued that they have not gone far enough, but we have welcomed them in principle. However, concerns have been expressed across the House about the lack of conditions attached to much of that aid.

As a result, there has been no attempt to influence the behaviour of companies—in particular their treatment of their employees. The behaviour of some—yes, they may be a limited some—has been unacceptable, as they have used the pandemic crisis as an excuse to implement sometimes long-held strategies of cutting wages and undermining terms and conditions of employment. A business accreditation scheme would be an effective basis for conditionality in the award of Government support, yes for those schemes established for the pandemic, but also in determining future Government support schemes.

This Bill is the start of a discussion about business standards that I think we all recognise, given some of the examples that we have seen, we really need to have if we are genuinely going to build back better. I commend the Bill to the House.

Question put and agreed to.

Ordered,

That John McDonnell, Zarah Sultana, Bell Ribeiro-Addy, Kate Osborne, Claudia Webbe, Apsana Begum, Rebecca Long Bailey, Kate Osamor, Dawn Butler, Richard Burgon, Ian Byrne and Lloyd Russell-Moyle present the Bill.

John McDonnell accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 27 November, and to be printed (Bill 190).