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The government should not be shelling out large sums of public money to subsidise poor business practice – John McDonnell’s ‘Business Standards Bill’

“Billions of pounds of taxpayers’ money is being paid to companies to help them get through the pandemic, so it is not much to ask that these companies abide by very basic good business practices of treating their employees decently, not harming our environment & paying their fair share in taxes.”

John McDonnell MP

John McDonnell will table legislation in Parliament this week to deny rogue businesses Covid pandemic financial aid unless they agreed to comply with basic business standards. 

The former Shadow Chancellor will move his ‘Business Standards Bill’ (see here) after Prime Minister’s Questions on Wednesday.

The bill would bring in an accreditation scheme for firms that meet standards over the treatment of workers, the payment of taxes and environmental practices.

A ‘Good Business’ commission, made up of representatives from business, trade unions, environmental groups and tax justice campaigners would oversee the scheme.

Crucially the body, which it is proposed would be similar to the Low Pay Commission, would have the power to impose tough sanctions on rogue employers.

The criteria for accessing financial aid from the government would include the treatment of workers, the payment of taxes and environmental practices, with offenders delisted. A firm would be accredited on the basis of adherence to good employment practices including whether it recognises unions, pays the real living wage, bans zero hours contracts and promotes gender pay parity. 

Having worker representatives on the board and a pay ratio between the highest and average pay, would also be considered.

Firms using fire and rehire tactics to cut wages and undermine employment rights – as British Airways have been accused of by the Unite union recently – would be banned from government schemes to support businesses cope financially with the impact of the Covid pandemic.

Speaking, ahead of the launch of the bill, McDonnell said: ” Billions of pounds of taxpayers’ money is being paid to companies to help them get through the pandemic, so it is not much to ask that these companies abide by very basic good business practices of treating their employees decently, not harming our environment and paying their fair share in taxes.

The government should not be shelling out large sums of public money to subsidise poor business practice.”

Scottish Labour leader Richard Leonard expressed his support for the measure, saying, “The ‘business standards’ bill includes serious and credible proposals to effectively tackle tax avoidance head on, as well as fundamentally transforming the workplace and business environment for the better.”

Leicester East MP Claudia Webbe welcomed the proposal, saying that “This is such an important bill that could also help address the poverty pay and exploitation of workers within elements of Leicester’s Garment Industry.”

Former Labour leader Jeremy Corbyn also endorsed both McDonnell’s bill and Leonard’s support on Sunday.

The bill comes to the fore as the role of private companies in delivering public services in response to the covid pandemic come under increased scrutiny.

Left Labour MPs have repeatedly condemned the role of private companies such as Serco profiting from the operation of the NHS track and trace scheme, and Randox, the private firm running the so-called ‘Lighthouse Labs’.

Socialist Campaign Group Secretary Richard Burgon MP on Saturday condemned the NHS Covid app for not accepting covid test results from Public Health England or NHS hospital labs.

Burgon has also condemned the role of private companies in running the outsourced NHS track and trace scheme, including Serco who employ contact tracers, Deloitte which oversees the coordination of the private ‘Lighthouse Labs’ and Randox, which provides home test kits.

On 24 September, he said, “Today the Tories confirmed that the Government has spent £12bn on Test and Trace. So much of that public money has been wasted on Serco and other failing private companies. They shouldn’t get a penny more.”

  • John McDonnell’s bill can be seen here and will be debated as a 10 Minute Rule Bill on Wednesday

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