Modern Slavery Bill

Lord Field of Birkenhead Excerpts

Tuesday 4th November 2014 Commons Chamber

[Karen Bradley]

It is a pleasure to open this important debate. Modern slavery in supply chains is an issue that this Government take extremely seriously and have been considering very closely for some time. Tackling modern slavery is not only about catching the perpetrators; it is about making sure that we as consumers and businesses do not inadvertently fuel the demand for slave labour. We do not want businesses in the UK to have any connection to these abhorrent crimes, and UK consumers should not be put in the position where they inadvertently buy goods that could have been produced by individuals who are abused and enslaved.

The Government have been listening carefully to the views of NGOs, businesses and parliamentarians on this issue. I know that many right hon. and hon. Members here today have been campaigning on it for a long time, and their contributions and insight have been invaluable in developing our thinking. I would particularly like to thank the pre-legislative scrutiny Committee on the draft Modern Slavery Bill, who collected such valuable evidence, and the chair of the Committee, the right hon. Member for Birkenhead (Mr Field), for his leadership. I would also like to thank the hon. Members for Slough (Fiona Mactaggart) and for Linlithgow and East Falkirk (Michael Connarty), who have both tabled private Members’ Bills on this topic and have campaigned so tirelessly.

The Government have always been committed to encouraging businesses to take action on modern slavery, but I and the Home Secretary wanted to make sure that any further legislative changes were of real value and would not confuse existing arrangements. Having considered carefully the evidence and calls for change, I believe that we can improve the legislative framework further to encourage business to take action. That is why I am extremely pleased that we have brought forward new clause 11, which will require organisations carrying on a business in the UK above a certain size threshold to disclose each year what they have done to ensure that there is no modern slavery in their supply chains or their organisation. Once businesses are required to disclose what they are doing to tackle modern slavery, consumers, shareholders and campaigners will have a better understanding of what action each business is taking, and can call for more action if they think more is needed.

[Mr Frank Field (Birkenhead) (Lab)]

I am glad that the Minister is introducing this clause. May I ask two questions? When companies report, will the Government comment? Will the new independent anti-slavery commissioner be expected to comment and try to raise the standards of firms?

[Karen Bradley]

I thank the right hon. Gentleman for his questions. Later in my remarks I will come to how we envisage the provision working. I hope that will address his concerns.

Many businesses are already taking steps to eliminate modern slavery. Once it is clear what activity major businesses are undertaking, we expect that public pressure and competition between businesses will encourage those who have not taken decisive steps to do so. Introducing this measure is an important step, and that is why we want to get it right. The provision does not specify the size of business on the face of the Bill. That is because we genuinely want to listen to businesses and stakeholders about the best possible approach and we will formally consult on the threshold level.

Our thoughts are that this provision should apply to large companies in the first instance. We will consult fully on the threshold and then set the threshold through regulations subject to the affirmative procedure, which will ensure that Parliament has the final say on the initial threshold, and can subsequently review and amend it over time, if required. We will also produce statutory guidance to accompany this provision, setting out the kinds of information that might be included in a disclosure, so that companies understand and have the support they need to comply. Again, we will consult on what information should be in the guidance, working with businesses and other interested parties so that they have a good understanding of what information might be used to comply with the disclosure requirement.

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[Karen Bradley]

My hon. Friend, who was such a committed member of the Public Bill Committee, makes an important point. The Government have already legislated to require companies to disclose in their annual reports under the Companies Act that they respect human rights throughout their business. We wanted to ensure that there was a further requirement on slavery, so we ensured that there was full transparency on slavery in supply chains in addition to the requirement that we have already included in the Companies Act.

[Mr Frank Field]

I take the Minister’s point about the Government’s approach being superior to our proposal to amend the Companies Act. One of the advantages of her approach is that the proposed legislation will cover those companies that are large but are owned offshore. We want to bring them within the ambit of the Act, because they are really important traders in this country.

[Karen Bradley]

The right hon. Gentleman makes exactly the right point. This is about ensuring that any company doing business in the UK makes transparent disclosures on the action it has taken on slavery in its supply chains. We want UK consumers to understand what actions have been taken by the businesses they transact with so that they can then put pressure on them if they feel that not enough is being doing. The Government will be able to help those companies through the guidance we issue on the action they may take that would give consumers the reassurance they need. We have also improved on the California model by capturing any commercial organisation that produces not only goods but services.

We are also looking at public sector procurement, recognising that modern slavery could happen anywhere. All public sector suppliers are already required to comply with relevant human rights and employment law, and EU procurement rules require contracting authorities to exclude suppliers that have been convicted of certain offences. Social responsibility information is also sought annually from Government suppliers, including details of the steps taken and planned by suppliers in the areas of ethical procurement and supply chain management.

I will now turn to new clause 5, tabled by Opposition Front Benchers, which would require the Secretary of State to make regulations under section 416(4) of the Companies Act 2006 so that quoted companies and certain large private companies are required to include in their directors’ reports information relating to modern slavery and forced labour in the supply chain. It is fair to say that we are all trying to achieve the same aim—ensuring that the supply chains of UK businesses are free from slave labour—but the ways in which we are seeking to do that may well differ. In considering this important issue, we have looked at a number of approaches, including amending the Companies Act and, in particular, the Companies Act amendment proposed by the pre-legislative scrutiny Committee.

I believe that introducing a specific provision in the Modern Slavery Bill, rather than in the Companies Act, sends out a clear signal that the UK will not tolerate any form of modern slavery. It also explicitly raises the profile of the issue by ensuring that the provisions are front and centre of what the Bill and this Government are trying to achieve: to stamp out modern slavery in all its forms. I think that all of us in this House are trying to achieve that. Those who disclose little or no action risk their reputation and, ultimately, their profits.

New clause 14, tabled by the hon. Member for Foyle (Mark Durkan)—he, too, served on the Public Bill Committee—would ban the import of any product produced by slavery, forced or child labour or human trafficking. As I have said, I believe that slavery in all its forms is abhorrent. The provisions we have brought forward to increase transparency in supply chains are both effective and proportionate. It would simply not be feasible for UK agencies to police the import of goods on the basis of whether they had been produced using slave labour. We need those trading with companies in other jurisdictions to apply due diligence and take decisive action where they believe that slave labour is being used. Waiting until the point when products are being imported into the UK is simply too late. That is why it is for businesses to take action to check their supply chains and for the Government to influence and encourage other Governments to do more, such as by improving the application of their employment laws or their approach to human rights issues.

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[Karen Bradley]

My hon. Friend is right to say that this process does not need to wait for the legislation to come in. Businesses can start to make these disclosures now; there is nothing to stop them doing that. The point of the Bill is to make sure that there is a level playing field and that all are crossing the line together. He makes some very interesting suggestions that I will reflect on.

[Mr Frank Field]

Will not successful disclosures involve some companies that, having found they are guilty of having slavery in the supply chain, rather than just sacking the suppliers, work with them on paying the workers proper wages? I would not want this measure to perpetuate poverty by pushing slavery further underground. If the public are to take a really rounded view on these reports, they should praise companies that find they are using slave labour and then go on to say what they are doing about it.

[Karen Bradley]

The right hon. Gentleman is absolutely right. This is about getting transparency in supply chains. On the very first day I started as a Minister, the first thing I was lobbied on was transparency in supply chains, and it became clear that this is all about finding out what is going on—shining a light. As he says, there may well be slavery within these supply chains, and if so action can be taken to deal with that.

I would add that in my experience of meeting Governments overseas where there may be concerns about human rights abuses, one of the strongest and most powerful tools to convince those Governments that they need to take action is that their businesses will not be able to trade with businesses here in Britain because we expect to be sure that there is no slavery in the supply chain, that human rights are not being abused through the supply chain, and that when consumers buy goods in Britain they can be confident that all action that possibly can have been taken has been taken to eradicate these practices from the supply chain. That is what transparency does—it shines that light and gives that clarity to the consumer.

New clause 15, tabled by the hon. Member for Foyle, seeks to require the Secretary of State to lay regulations to ensure that individuals who have benefited from modern slavery that has been perpetrated by a third party are criminally liable where their lack of supervision made the modern slavery offence possible. We do of course want business to take action to eliminate modern slavery from supply chains, and, as we have discussed, the Government are bringing forward a legislative measure to achieve this. However, I am not persuaded that a potentially very broad criminal liability in this area is the best approach. I want these provisions to drive a change in behaviour. That is why I firmly believe that the Government’s amendment to introduce a bespoke provision into the Bill is the right one. As I said, it goes much wider than the provisions in the California Act by including all sectors, not just retail and manufacturing, and the provision of services, as well as goods, but it does so in a way that does not create undue burdens for business.

I fully acknowledge the good intentions behind right hon. and hon. Members’ amendments. However, in the light of discussions and the work that the Government have undertaken in this area, and the effective provision that we are proposing today, I hope that they will feel able to withdraw them.

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We want to ensure that the Bill leads the way internationally and is world-class, as the Home Secretary has said. The Companies Act approach gives it portability across different legal systems. New clause 11 is important, but it relates to our country’s legal system in the relief that it provides through injunctions. The Companies Act approach would allow other corporate governance ways to ensure that our lead is followed internationally. At the very least, we now have consensus, and I appreciate the direction in which the Government have gone.

[Mr Frank Field]

Could not other countries follow our lead by simply taking new clause 11 into their legislation?

[Mr Burrowes]

Other countries could do that, but they have different means of enforcement, which cannot be simply transferred. However, they could certainly take a lead by adopting much of what new clause 11 says.

[Mr Burrowes]

I do not want to understate my praise—this is a huge step forward—but we, as legislators, want to ensure that what we approve is really fit for purpose and has the necessary teeth. There are other elements that can be done without legislation: the issue of international corporate governance goes beyond legislation, and it can best be dealt with by sharing good practice internationally.

I will finish on a very positive note. Today, we can say that British law is no longer just concerned about the sustainability of the wood in our furniture, but is more concerned about the freedom and safety of the millions of men, women and children involved in making that furniture.

[Mr Frank Field]

I, too, want to pursue the theme just followed by the hon. Member for Enfield, Southgate (Mr Burrowes) in congratulating the Government, but drawing attention to just how important new clause 11 is. The Home Secretary made it very plain in her first article in The Sunday Times that she wanted a clause on supply chains in the Bill. I therefore congratulate her, her very able Minister and the person in No. 10 who changed his mind at this very late stage in the Bill’s passage. Heaven rejoices at the sinner who repents even at the eleventh hour, and some credit should go to the Prime Minister for changing his mind on this matter.

My hon. Friend the Member for Kingston upon Hull North (Diana Johnson) has played a valiant role in spearheading our approach to the Bill and has borne all the heat of the day on it. However, I think we all accept, whatever efforts we have put in, that the legislation is the easy part of the process. The next part will be very hard—to get a genuinely mass consumer movement of people who do not buy goods if they are not kitemarked as being free of slavery.

As we draw stumps on this House’s proceedings on the Bill, it is important to commend it, as the hon. Member for Enfield, Southgate has just done—it will not just be a good Bill, but a world leader when it leaves the other place—but the real work will be on enforcement and on convincing consumers that they have the vital job of not buying goods that are tainted by slavery.

[Mark Durkan (Foyle) (SDLP)]

In following the right hon. Member for Birkenhead (Mr Field), I want to acknowledge the Minister’s efforts in making good the serious deficit in the Bill, but also those of the right hon. Gentleman and many other colleagues during the pre-legislative scrutiny, on Second Reading and ever since. Those efforts by him and the many others who spoke on Second Reading and in Committee have reflected the very strong concern of some of the groups that have worked so hard to support and promote the Bill and that understand the issue so well.

I am one of those who can take yes for an answer, now that the Government have made good on this matter. However, I would say, “Yes, up to a point, but maybe it could be improved.” I believe that the Bill could go further. The hon. Member for Kingston upon Hull North (Diana Johnson), who tabled new clause 5, has shown that there are important issues. The headings given in subsection (3) are clear and useful, and it is right for them to be in primary legislation, rather than left to remote chance by way of secondary legislation.

New clause 5 is also important in what it would do with respect to the Companies Act. I understand what the Minister said about not only using that Act as the way to deal with the problem, but how it brings in very clear corporate responsibilities. In that context, it also highlights relevant professional obligations, which would give real meaning to what the Government and others are trying to encourage in relation to ethical investment, and in relation to the understandings we should all have about any investments—all the new pension provision and everything else—for which we are the source of the money.

The hon. Member for North East Cambridgeshire (Stephen Barclay) has referred to financial services legislation. We have said that more and more needs to be done to ensure full and due transparency in that context. We should complement such provisions in the Bill. I therefore hope that the Minister—I support her new clause 11—can see her way to accepting new clause 5 as well.

I tabled two of the new clauses in this group of amendments. The Minister has addressed new clause 15, but let me point out that throughout the gestation of the Bill, we have been told that it is meant to be world leading. New clause 15 is an attempt to bring in the clear standards in EU directive 2011/36/EU on preventing trafficking in human beings. If the Government are at pains to consolidate and codify much existing law in the Bill and to present it as world-leading legislation, the question arises whether we should not also use it to show that we are at least matching and adhering to international standards and obligations, including EU ones. My clause on the legal liability for the beneficiaries of slavery would be consistent with the EU directive, and I see no reason why we should not explicitly ensure that our legislation is up to that standard.

New clause 14 seeks to go further on questions of the supply chain and sourcing, and the possible use of slavery or exploited labour. We are meant to be discussing world-leading legislation, but the new clause reflects legislation that was introduced 84 years ago in the United States of America. We hear a lot about Californian legislation on supply chains, but the Tariff Act 1930 in America gave power to prohibit the importation of

“goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country…by forced labour.”

The new clause is therefore hardly a radical view or innovation, and the Californian legislation—referred to often in debates on the Bill—exists in wider US legislation.

New clause 14 does not just rely on language in the 1930 legislation, which puts responsibility on the Secretary of State at the Treasury to prescribe the necessary regulations, but it also reflects the essence of the code of federal regulations in the United States, which establishes the process whereby anyone can petition the Department of Homeland Security. That explicitly provides for:

“Any person outside the Customs Service who has reason to believe that merchandise produced in the circumstances mentioned is being, or is likely to be, imported into the United States.”

The United States legislation does not guarantee that the state will fully police all those issues, but it indicates that it will respond to legitimate petitions or legitimately presented evidence that gives rise to concern, and that it will act. Legislators in the US have ensured that the state reserves that power to act to prohibit the import of a good.

In the Government’s new clause 11, the onus is—understandably—on companies, which have to be able to show what they are doing regarding their supply chains. We wanted supply chains included in the Bill not as a badge for companies, but as a shield for workers in developing countries and other places—including the UK—who could be exploited. The difference is between this measure being a corporate badge or a shield for human beings. If companies have only to present what they say they are doing, and consumers then make their judgment and choice, why—if we are legislating for company responsibility but also for consumer responsibility and activism—is there still no rule for the state or Government?

New clause 14 clearly states:

“The Secretary of State shall have the power to prohibit the import at any point of entry to the United Kingdom of any good, ware, article, or product mined, produced, or manufactured wholly or in part in any foreign country that can be demonstrably shown to have been produced by slavery, forced labour, child labour or with the involvement of human trafficking.”

By rejecting that new clause we are saying that even if exploitation can be demonstrably shown, we do not want the state or any Secretary of State to be able to act against that. Whether in relation to the T-shirts that were in the newspapers recently, or anything else, we are saying that when such issues are raised, we do not want anybody or any part of the state to have responsibility for saying, “The nature of those products in terms of the quality of the supply chain is clear, but it is nobody’s job to move to do anything other that what companies are inspired to do, or what consumers are mobilised to do.”

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[Mr Frank Field]

I also wish to speak on that theme, Madam Deputy Speaker. I know you will be pleased to hear that we will not press the matter to a vote, but we hope that the Minister will pick up the idea and translate it into effect in the other place. The change involved would be quite simple. The whole House agrees that we want to get more money back from these evil people. At the moment, we can start the process of freezing assets on the day the investigation begins. However, we have to prove that the person with the assets is likely to dissipate them around the world. The proposed change would mean that any agency attempting to freeze assets under the provisions of this Bill—which I hope will soon become an Act—would not be required to meet any threshold of proof that the person would otherwise dissipate them. That would make a huge difference to the number of people we hope will be prosecuted, as they could then have their assets frozen. There would then be a ready source of moneys with which the Government could make good on their wish to compensate the victims of slavery. Also, as my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay) —as I call him on many of these occasions—has pointed out, those moneys could be used to help to pay for the policing involved, which would make the provisions of the Proceeds of Crime Act 2002 more effective.

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Before I call Mr David Burrowes, I must ask him to bear it in mind that we have one more speaker on this group of amendments. If he and Mr Durkan could each speak for about four minutes, that would give the Minister time to reply before 4 o’clock.

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[Mr Frank Field]

I underscore that last comment, which is immensely important. This has been the most open conversation on a Bill that I have experienced in my time in the House.

Fifteen months ago there was no talk of this Bill, and tonight there are a few scratchy comments about whether it could be an even better world-class Bill—it will be when it leaves the other place. There are three tasks to do, and they are the difficult tasks as opposed to getting a world-class Bill. One is about victims, and that immensely difficult task will take time and resources. There is also the question of how we educate a new consumer movement, so that consumers enforce the Bill by refusing to touch goods and services made by slaves. The Secretary of State will have a world-class Bill, so I hope she will take it to the Commonwealth and enliven that body. Many of the supply routes to this country for slavery are from Commonwealth countries. Since the overthrow of apartheid, the Commonwealth has lacked a huge moral task with which to get involved, and I think this issue will be that. I thank the Home Secretary for her openness. Some of the concessions that she made, such as on supply chains, are ones that she wanted to give anyway.

Question put and agreed to.

Bill accordingly read the Third time and passed.