The Business Standards Bill will judge businesses based on their treatment of employees and the community
My Bill seeks to introduce system for accrediting businesses on their behaviour in a number of key areas – the treatment of their employees, their impact on the environment and the payment of taxes, writes John McDonnell MP. | PA Images
During the Covid-19 pandemic the government has introduced schemes to support businesses, but there has been a lack of conditions attached to much of this aid. The Business Standards Bill will introduce system for accrediting businesses on their behaviour.
The pandemic has made us all reassess how our society and our economy operates. Of course, our main focus has to be 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 learnt from this crisis and he and others have said as we come through the pandemic we must build back better.
Within our economy the pandemic has exposed much of what’s good but also regrettably some of what’s just not acceptable.
If we are to learn lessons and build back better as the Prime Minister has urged us, 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.
My Bill seeks to introduce system for accrediting businesses on their behaviour in a number of key areas – the treatment of their employees, their impact on the environment and the payment of taxes.
The aim of the accreditation process is to acknowledge and celebrate good businesses.
It will also provide the basis for judging whether a business is upholding its responsibilities to its employees and the community.
The Bill proposes that an independent Good Business Commission is established on the model of the Low Pay Commission, comprising representatives from business, trade unions, the major environmental voluntary organisations and the tax justice campaign.
This Good Business Commission will have responsibility for determining the criteria by which a business will be assessed. Businesses will be encouraged to seek accreditation.
The award of a good business status has the potential of enhancing significantly the reputation of a business and confidence in its standing. The failure of a business to apply for accreditation or to fail to achieve accreditation will also tell its own story.
This Bill is the start of a discussion about the business standards that we need if we are genuinely going to build back better
In determining good business practice the Good Business Commission would examine, for example:
On employment, whether the business recognises a trade union, pays the real living wage, bans zero hours contracts, has gender pay parity and addresses equal pay gaps for all protected characteristics, provides for worker representatives on the board and a pay ratio between the highest and average pay.
On environmental impact, whether the company has adopted a strategy for achieving net zero emissions.
On tax, whether the company is paying its taxes, not engaged in the use of tax havens and clear tax avoidance schemes.
The Bill also charges the Good Business Commission to bring forward proposals on how the business accreditation scheme could be used to incentivise compliance with good business practice by establishing thresholds for 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, for example listing on the London Stock Exchange.
During the Covid-19 pandemic the government has introduced schemes to support businesses, but there has been a lack of conditions attached to much of this aid.
A business accreditation scheme would be an effective basis for conditionality in future for the award of government support as established in the pandemic and for use in any future crises.
This Bill is the start of a discussion about the business standards that we need if we are genuinely going to build back better.
John McDonnell is the Labour MP for Hayes and Harlington and former shadow chancellor of the exchequer.