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15 Oct 2002 : Column 223—continued

Madam Deputy Speaker: I thank the hon. Member for giving notice to Mr. Speaker of his point of order. The House can reasonably expect notice of important Government documents before they are the subject of debate, and Mr. Speaker attaches importance to this principle. The exact timing of the issue or publication of Government documents, however, remains a matter for Ministers, and the Speaker has no power to direct when papers will be provided.

Mr. Gary Streeter (South-West Devon): On a point of order, Madam Deputy Speaker. I seek your advice. Hundreds of schoolteachers in Devon this evening are looking to tonight's debate on local government finance to give them hope in tackling the underfunding of children in Devon and to help them campaign for fair funding for Devon schoolchildren. Now that the Government have squeezed that debate into two hours, how can these issues properly be dealt with by the House? What message can I take back to the people of Devon about the way that this Government have once again sought to sideline the importance of the House?

Madam Deputy Speaker : I have already answered that point of order, I think, which was raised by a Member on the Front Bench.

Mrs. Angela Browning (Tiverton and Honiton): Further to that point of order, Madam Deputy Speaker. I heard your decision and your ruling about the timetabling of business being in the hands of the Government, but I hope that you will bear it in mind, given the representations being made to you about the limited time to debate three very important issues tonight, that we are shortly to consider changing the

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Standing Orders of the House in order that Members can, apparently, swan off to cinema clubs in the evenings. I hope that you will convey to—[Interruption.]

Madam Deputy Speaker: Order. I repeat what I said earlier. We are now discussing the merits. I have already given a ruling on the point of order.

Mr. David Curry: (Skipton and Ripon) On a point of order, Madam Deputy Speaker.

Madam Deputy Speaker: Is this on the same topic?

Mr. Curry: Yes, and it is absolutely relevant, Madam Deputy Speaker. Would it be in order for you to inform the House of how many hon. and right hon. colleagues are seeking to catch your eye in the debate on local government finance, so that the Government may form a view as to how much additional time would be necessary to accommodate those very important views?

Madam Deputy Speaker: May I suggest to the right hon. Gentleman, who is very well experienced in the running of the House, that he approach that through the usual channels?

Mr. Patrick McLoughlin (West Derbyshire) : On a point of order, Madam Deputy Speaker. I take it from the fact that Mr. Speaker has set a 10-minute limit on all speeches that there is considerable demand to take part in the local government debate. Can you confirm that, as the Order Paper stands at the moment, it is likely that there will be debate on a ten-minute rule Bill and then the hour and a half for the Post Office, and if we then come on to the Public Trustee (Liability and Fees) Bill and there is concern about that Bill, it could well be that we have no time to debate local government at all, and the only people we shall listen to will be Ministers? Surely that cannot be part of the way in which the Speaker would condone a debate's taking place in the House on such an important issue, which represents 25 per cent. of public expenditure?

Madam Deputy Speaker: I refer the hon. Gentleman to the point that I made earlier, but say too that the business of the House today is due to finish at 10 pm. It is to some extent in the hands of Members how the remaining time that we have is spent.

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Corporate Responsibility (Environmental, Social and Financial Reporting)

6.20 pm

Linda Perham (Ilford, North): I beg to move,

In recent years—[Interruption.]

Madam Deputy Speaker (Sylvia Heal): Order. Will the hon. Members who are leaving the Chamber please do so quickly and quietly?

Linda Perham: Thank you, Madam Deputy Speaker.

In recent years, many people have come to understand the implications of the size, influence and power of major corporations. Fifty-one of the 100 largest economies in the world are now corporations, rather than countries, and the largest 500 companies in the world control two thirds of world trade. Clearly, business is a large and powerful player on the world stage. We also know of the major problems that companies have caused environmentally, socially and economically in many countries around the world, of which Shell's well-publicised disputes with the Ogoni people in Nigeria and Nestle's continuing marketing of breast milk substitutes are well-known examples.

At home, too, I should be surprised if any Member has not had to deal with problems, brought to them by local people, caused by the activities of companies in their constituencies, such as shock job losses when production is suddenly moved overseas, pollution incidents, planning issues or the latest scandal in many constituencies—hidden mobile phone masts.

To argue that everything done by big corporations is bad would, of course, be ridiculous. Companies are creating jobs, developing products, providing services that we all need and investing in communities, but we need to be sure that they are serving the needs of society at large, not just their shareholders, and many people now feel that that requires changes in the law.

An important point must be made. When companies behave badly in ways that affect the richest and most powerful in society, there is a clamour for new rules and regulations. One has only to look at the readiness of the American Government to strengthen laws on financial processes after the collapse of WorldCom and Enron to see how fast we act to protect wealthy investors. That response is not wrong, but we should be equally determined to act when company activities affect the least well off, bearing in mind that the environmental and social impacts of companies' activities usually hit the poorest hardest.

When I introduced a similar Bill earlier this year, it had the backing of Amnesty International, CAFOD, Friends of the Earth, the New Economics Foundation and Save the Children. Since then, support has grown enormously. Major unions have come on board—including, I am pleased to say, my own union, Unison. More development agencies have joined, such as

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Christian Aid, and Traidcraft—a business that has led the way in trading ethically and has taken care over the environmental and social impacts of its activities—also now supports the Bill.

The Bill that I hope to introduce today has four key principles. Its first requirement is for mandatory reporting on social and environmental impacts. Experience has clearly shown that a voluntary approach to reporting is ineffective. Three quarters of the FTSE 350 companies that were challenged by the Prime Minister to produce environmental reports in October 2000 completely ignored the call. There is a business case for mandatory reporting. The few companies that have responded to the Prime Minister's challenge would like the playing field to be levelled, as their competitors, who can currently undermine the better standards for which the best companies strive, would come under the same pressure from investors.

Embracing the corporate social responsibility agenda is likely to have a positive effect on staff recruitment, productivity, costs, innovation, quality, brand and reputation. It also protects the integrity of the free market, which is only possible when information is freely available to investors, customers and suppliers. The Bill would also change the basic duties of company directors, requiring them to minimise the environmental and social impacts of their activities.

Another major strand of the Bill is the requirement that companies must consult affected people on major projects, and all the best companies already do so. Indeed, many Government supported schemes already require such consultation, before export credit guarantees are given, for example. The Bill would spread what is currently best practice and make it common practice.

Finally, the Bill would allow stakeholders to challenge companies on the content and accuracy of their reports and on any impacts a company might have on its environment or its community. The Bill includes measures to prevent malicious complaints, but it is right that it should be possible to challenge companies' claims of environmental righteousness if they are clearly false—greenwash, as it is often known.

To protect reporting standards further, the Bill would require greater transparency and the setting up of a standards board. The board would include representatives of business and experts on the impacts of companies' activities, and would be charged with drawing up a framework of standards, ensuring that it provides appropriate information without being burdensome. The board could also carry out occasional checks on performance—perhaps examining a handful of reports each year—and assist with complaints about companies' reports.

The Government have accepted many of those principles in the White Paper on company law. The draft clauses already require an operating and financial review, which would have to include some environmental and social reporting, and would also widen the duties of company directors. Although the principle of those changes is right, the detailed wording currently leaves too many loopholes. For example, the proposals apply only to economically significant companies, leaving most businesses untouched.

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The White Paper estimates that about 1,000 companies will be required to produce an operating and financial review, with a total turnover of around #1 trillion—roughly a third of the total turnover of United Kingdom business. My Bill, with its #5 million turnover threshold, would capture about 85 per cent. of economic activity by requiring just 2.5 per cent. of companies to report.

The Government's proposals also require reports on the environmental and social impacts that are relevant to the company, not necessarily those that are relevant to society—a crucial difference. I am also troubled that the proposed law requires reporting only on the company's policies on environmental and social issues, so a bad company with no policies need not report at all. Although a future companies Bill will recognise and include important points and accept the principle of mandatory reporting, it is unlikely to achieve significant environmental and social benefits. By winning the arguments for corporate social responsibility, we will secure the changes needed to protect the environment, defend human rights and safeguard the interests of shareholders, investors, workers and consumers across the world.

A wise man said recently that we are at our best when we are at our boldest. The Bill is bold; it would deliver measurable improvements to people's lives in Britain and abroad, and it would challenge other nations to follow our lead.

I commend the Bill to the House.

Question put and agreed to.

Bill ordered to be brought in by Linda Perham, Mr. Barry Sheerman, Mr. Martin O'Neil, Dr. Vincent Cable, Sir Teddy Taylor, Ms Glenda Jackson, Mrs. Jackie Lawrence, Mr. John Horam, Mr. Frank Field, Mr. Tony Colman, Sue Doughty, Mr. Simon Thomas.

Corporate Responsibility (Environmental, Social and Financial Reporting)

Linda Perham accordingly presented a Bill to establish and provide for the functions of the Corporate Responsibility Board; to require certain companies to publish reports on environmental, social and economic matters; to require those companies to consult on certain proposed operations; to specify certain duties and liabilities of directors; to provide for remedies for aggrieved persons; and for connected purpose: And the same was read the First time; and ordered to be read a Second time on Thursday 14 November, and to be printed [Bill 193].

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