---

Companies Bill [Lords]

There was I thinking that we had seen the end of Punch and Judy politics for the sake of it. We are an Opposition that have for some time now said that, when we are happy with legislation, we will not oppose it just for the sake of it. We saw no reason to change that with the business review, because we support increasing and enhancing the corporate social responsibility framework in this country. We are well aware that the business review started life as the operating and financial review many years ago. Eight years ago, children now in university were in primary school when the operating and financial review was first developed and work on the Bill started, but we have finally reached the stage where we have a business review in the Bill, which Conservative Members support. We recognise the importance of the role of businesses in creating jobs and prosperity, but we also recognise the broader impact of businesses not only on the environment but on the local and international communities in which they operate. There is no inherent contradiction between companies striving for long-term financial success and demonstrating strong corporate responsibility. In fact, the Minister herself correctly described those two issues as being interlinked and interwoven. At the heart of any successful company is an in-depth understanding of what its customers want and value. Perhaps more than at any time in the past, customers place a value not just on what they are purchasing from companies, but on the way in which companies have carried out their business in order to provide those products or services. Companies can therefore be at the forefront of the push to tackle environmental and ethical issues. They do not have to be at the back of that argument. The business review as set out in the Bill will be an important part of that developing corporate social responsibility agenda. As we approach the Queen’s Speech, which Conservative Members very much hope will contain a climate change Bill, it is possible to see the emergence of a real corporate social responsibility reporting framework in the UK. The business review could play a vital role in that, and we certainly hope that it does, but new business legislation often involves additional costs and burdens on those businesses that it affects. The Opposition recognise the importance of establishing for the first time a formal narrative of a company’s development risks and uncertainties and the wider impact of its relationship with the environment, its employees and the community. However, those of us who have worked in business—I should declare that I am a chartered accountant—also know how careful Government need to be before adding any unnecessary burden on business. As the Minister said on Second Reading, we should ensure that the new law is as clear, simple and modern as possible, that it is fit for today’s business purposes, and that it does the maximum possible to get rid of any unnecessary burdens of regulation.