Question

To ask the Secretary of State for Business, Innovation and Skills, what steps his Department plans to take to ensure that companies are held responsible for labour conditions throughout their supply chains.

Companies are held accountable by investors, consumers and civil society as well as governments for the way in which they conduct their operations, including labour conditions, and how they report on their actions in this regard.

Since October 2013, quoted companies have been required to provide information in their Annual Report about social, community and human rights issues, including information about any policies of the company in relation to those matters and the effectiveness of those policies.

The Department has negotiated at the European level to strengthen current human rights disclosure requirements and make them more specific. Provisions have now been agreed that will apply across all EU Member States from 2017 to large quoted companies and Public Interest Entities. My Department will shortly be consulting on the transposition of these measures into UK law.

Additional disclosure requirements will be introduced in the Modern Slavery Bill. Big businesses will have to publicly state each year what action they have taken to ensure their supply chains are slavery free. This requirement goes further than any similar legislation in the world by applying to businesses regardless of the nature of a company or what it supplies, whether goods or services.

In September 2013, the UK was the first country to publish a National Action Plan implementing the UN Guiding Principles on Business and Human Rights. The Action Plan underlines the duty of businesses to respect the human rights of their employees and those in their supply chains. My Department is taking action to develop guidance for businesses reporting on this obligation, beginning with the retail sector.

In order to toughen up our enforcement of the National Minimum Wage my Department has made it simpler to name and shame employers that break the law on the National Minimum Wage and has increased the financial penalty that employers pay for breaking the law from 50 per cent to 100 per cent of the unpaid wages owed to workers. The maximum penalty has also increased from £5,000 to £20,000 and will be applied per worker not per firm.