Mr.
Djanogly: Hon. Members can probably tell from that list
that the amendments in this group are somewhat more significant than
many of the amendments that we have discussed so far. We are moving on,
of course, to shareholders’ and non-members’ rights to
inspect and require copies of the register of members.
It of interest that when the
matter was first discussed in Grand Committee in the Lords, the
question of denying access was not raised from the point of view of
extremist activity. That is because the Opposition took the decision
that that was a political issue that should be dealt with by this
House, not least because the topic is one on which I have corresponded
with the Government for several years in the interests of my
constituents who work at Huntingdon Life Sciences. Subsequently,
however, several thousand shareholders of GlaxoSmithKline, the
pharma-group, received threatening letters from animal rights
terrorists. Suddenly, on Report in the Lords, Lord Sainsbury, on direct
orders from above and urged on by a chorus of vocal peers, promised to
go away and reconsider the Government’s position before Third
Reading, when amendments were indeed produced and added to the
Bill.
Having demanded increased
protection for shareholders for many years now, and the Government
having rejected my amendments to the Serious Organised Crime and Police
Bill to do that, I am pleased to see that the issue is now being
addressed. I am aware, however, that reactive and on-the-hoof law can
often turn into the worst law in practice. That is why we need to spend
some time on the clauses.
The overriding concern of my
hon. Friends is to ensure the protection of shareholders from violence
and intimidation.
Kitty
Ussher (Burnley) (Lab): Does the hon. Gentleman agree that
the violence and intimidating behaviour is the offence and that we
should deal with that, rather than restrict the centuries-old
established convention that owning a share in a company means that the
information should be
public?
Mr.
Djanogly: No, I disagree. If a person accesses the
register of members for the purposes of using it for violence, that
must be controlled.
Paul
Farrelly: Does the hon. Gentleman agree that any measure
that is enacted in legislation such as this has to be proportionate and
should not cause wider harm, in particular to corporate governance?
Throughout the corporate sector in the UK, we have striven for greater
disclosure and greater transparency in corporate behaviour. The danger
is that his amendments will set that back
substantially.
Mr.
Djanogly: The hon. Gentleman is absolutely right. There
must be a balance and proportionality between access to a register and
security for those on it. We totally accept that position. He talks
about our amendments inhibiting that access, but he will hear me say
that most of the amendments have been tabled on a probing basis, so
that we can look at the different levels that currently exist in the
world and debate them. I will not maintain that we should support all
of the amendments. If he bears with me I will certainly cover in some
depth the point that he quite rightly mentions.
My purpose is much
more than protecting companies that practise animal testing, although
that is the area directly within my experience, so I shall refer to it.
The amendments are more about the type of environment that we are to
offer people conducting business in this country. Just as the
protection of the person must be a priority for the Government, so must
be protection for companies and their shareholders. Without that
protection business will, as I will show the Committee, simply pick up
and go overseas. The other preliminary point that I make, with some
irony, is that several speakers in the Lords debate on this issue and
several journalists have made out that the GlaxoSmithKline letter
incident was a new development. I shall show the Committee that that
was not the case and that attacks on shareholders have become an
established theme of anti-corporate activism.
On the basis that this is a
general debate on shareholders, I do not intend to address the rights
and
wrongs of the underlying issues, much though I support animal testing,
for example. My point is that although direct action, sometimes
slipping into terrorist activity, emanates from animal rights activists
today, the same methods could be used tomorrow by other groups. If
drugs manufacturers, animal testing companies and furriers are affected
now, meat importers, road builders, handbag manufacturers, furniture
makers or mining companies could be affected
tomorrow. Kitty
Ussher: Does the hon. Gentleman not agree that under the
current legislation there is no requirement for an individual to put
their home address? They could use a post office address or an address
care of a bank or some other institution. Does that not solve the
problem he
identifies?
Mr.
Djanogly: No it does not, for a variety of reasons. First,
many small shareholders do not have service addresses that they can
use. Secondly, if an individual shareholder wants to hold through a
nominee, some companies will refuse to act as nominees. That happened
with Huntingdon Life Sciences: not a single institution in the City now
will act as nominee if someone wants to own HLS shares. The hon. Lady
makes an important point, but the problem
remains. Justine
Greening (Putney) (Con): We have just had an interesting
exchange. The reality is that many shareholders will, for a variety of
reasons, some of which have been outlined, put their home address. The
very act of receiving a letter at home with the implicit warning,
“We now know where you live,” and all the stress that may
cause to family and friends visiting the house means that this is an
important area to deal
with.
Mr.
Djanogly: My hon. Friend makes a fair point, which I was
not going to make. If someone wants to use their home address why
should they be intimidated into not doing
so?
Margaret
Hodge: The hon. Member for Putney (Justine Greening) has
taken us off in the other direction from the direction that the hon.
Member for Huntingdon was taking us. There is no need for anyone to put
their home address on to the shareholding. His point that some people
may not have a service address is not really sufficient. If they need
to create one, they can do so without necessarily having the
shareholding held through a third party. It seems to me that the hon.
Gentleman’s amendments are not just about opening up home
addresses, but about hiding names in addition to the current provision,
which can ensure that we do not have
addresses.
Mr.
Djanogly: With respect to the Minister, she mentions
names. If one’s name is Smith it might not matter too much. But
with a name like Djanogly or Vara accessibility is slightly easier. It
is not just addresses; names are an issue
too. It is clear now
that farmers and animal testing companies are the weathervane for such
activity, and for too long the Government and many in the City have
allowed such attacks to continue while hoping that the issue would just
fade away. I have carefully followed the Government’s actions on
the issue and it has been clear that the priorities of varying Home
Secretaries have differed widely. I was, therefore, very pleased to
hear the Prime Minister speak strongly against the animal rights
extremists after the GSK incident. Likewise, in an important
development, I was pleased and relieved to see the recent supportive
letter from a good number of City institutions that appeared in the
press recently. As the largest shareholders, the fact that they finally
stood up jointly against the terrorists was an important development
and they are to be congratulated on taking a stand. The key message is that those
terrorists are fanatics to their cause every bit as much as the
fanatics behind the challenges we face elsewhere. The problem will not
simply go away. Unless we counter it head on, it will fester, grow and
become much more of a problem in a wider range of sectors. We have no
choice but to act. I
recognise that the number of arrests of such terrorists has increased
recently, but we must be aware that many of them wear their conviction
record as a badge of pride within their own ranks. Furthermore, their
tactics are often surreptitious in so far as they are fairly expert at
getting the maximum publicity for their stunts and crimes using a very
small number of activists. That is one of the things that is so
frightening about this topic. No one has given me an accurate
assessment of the number of extremist protestors, but we may be talking
of little more than 100 or so who have crossed the line into
out-and-out terrorism.
The important breakthrough in
dealing with these people came about via the civil law, rather than the
criminal law, when Huntingdon Life Sciences managed to secure a civil
injunction under the Protection from Harassment Act 1997, which was
originally intended to stop stalking. The court found that the
injunction could cover all of the employees and at multiple locations,
including their homes. As different companies have subsequently applied
for injunctions, the courts have gradually extended the remit to cover
activists who continually look for new victims related to the company
who are not covered by the injunction. One granted to Oxford university
was extended to cover third-party unnamed suppliers to the proposed
research premises, and was then further extended to cover people who
live or work in Oxford who may be negatively affected by noise and so
on. Very recently GSK also used an injunction to protect its
shareholders. The
Serious Organised Crime and Police Act 2005, passed in January last
year, included provisions that made it easier to secure injunctions, as
well as instituting other valuable measures concerning harassment of
people in their own homes. That was important because when HLS
shareholders were approached by the terrorists, many of them had their
homes picketed, graffitied and so on. Injunctions tend to work quite
well because breaching them can incur criminal penalties, and for the
most part the terrorists work within or around the law, mainly saving
criminal activity for the night or for when it is difficult to catch
them. However, the use of injunctions has meant that the extremist
campaign has become wider so the number of so-called home
visits—that is for protest
visits, not taking tea—has decreased for directors and employees,
while anonymous activities such as abusive calls and hate mail has
increased and the incidence of criminal damage, which takes place
mainly at night, is high. Importantly, as more farm and
research companies take out injunctions, so the extremists look for
easier targets. We have seen an increase in the number of secondary and
tertiary target companies. Typically, the secondary target company will
be a small family-owned supplier, possibly in the locality of the
primary target. It will be sent a letter saying that it must sign a
document promising not to trade with, for example, HLS, and that if it
does not sign, it will be put on the Stop Huntingdon Animal Cruelty
website. That threat is often enough to get a capitulation, as the
extremists call it. For the brave traders who refuse to be intimidated,
being placed on the SHAC website means that their company is game for
visits from the thugs. That is when it starts to get really nasty.
Normally, it starts with protestors invading the premises. Many small
businesses in my constituency have called me about the torments they
have suffered because of such
thugs. I was a member
of the Committee that considered the Serious Organised Crime and Police
Bill. We had been pushing for some time for new criminal laws to
protect companies from economic terrorism and tabled amendments to deal
with it. We were happy when the Government accepted the point and later
introduced their own provision—clause 145—preventing
animal testing companies from being forced to act in a certain way if
contracts had terminated in circumstances of criminal
activity.
4
pm At that time,
the Conservatives wanted the provision being drafted to apply more
widely than to animal testing companies alone. As Lord Sainsbury said
in the other place, the protections given shareholders in the Bill need
to be looked at in the context of protections given under the Serious
Organised Crime and Police Act 2005. That being the case, we now think
that section 145 provisions should be extended to all companies, as
provided for in section 149 of the 2005 Act. Although the Government
are acting, it seems to be always at the last minute and at the point
of a gun. Can we please think a step ahead of the
extremists?
Paul
Farrelly: I appreciate that the hon. Gentleman has
constituency concerns because of Huntingdon Life Sciences. Not far from
my constituency in my county of Staffordshire, animal rights terrorists
have attacked farmers and local people because of a guinea pig farm.
However, companies such as Huntingdon Life Sciences can set up
facilities for shareholders that do not involve giving addresses.
Facilities to help the trading of shares are set up all the time. He
says that the amendments are widely drafted and cover the whole
corporate sector, but they are not proportionate and add nothing to a
situation that can be resolved in other ways. The amendments would set
back corporate governance and transparency in this country by a long
way.
Mr.
Djanogly: I explained myself to the hon. Gentleman before
and shall do so again, because he
obviously totally missed my point. The point of most of our amendments
is that Parliament should have a debate on the extent to which access
should be given to the register of members. Different countries and
systems treat the issue in different ways. The provisions were rushed
through by the Government in the other place, mostly on Third Reading
and without debate. The hon. Gentleman may think that the issues
therefore do not deserve debate. I am afraid that I disagree entirely;
we will have that
debate.
Margaret
Hodge: I should like to put something straight on the
record. My noble Friend Lord Sainsbury, the Minister with prime
responsibility for many of these issues, has been responsible for
taking forward a whole raft of new legislation as the problem that we
are discussing has emerged and developed. It is unfair to assert that
that has not happened. I hope that the hon. Gentleman will withdraw his
assertion. I know from my dealings with my noble Friend that what the
hon. Gentleman says is not the
case. This Bill, as
introduced in the House of Lords, included substantial protection of
members. Further consideration was given to issues raised in the House
of Lords and in the inclusive way in which we tried to devise the Bill.
Indeed, I held a meeting with the hon. Gentleman, in which we sought to
establish whether we could develop those clauses any further. We did.
To suggest
that—
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