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Companies Bill [Lords]

It is a privilege to follow my hon. Friend—for the purposes of this debate—the Member for Elmet (Colin Burgon) and to support new clauses 1 and 2. I pay tribute to him and his hon. Friend the Member for Hemsworth (Jon Trickett) for giving voice in the House to the hundreds of thousands of citizens who have led one of the biggest letter-writing campaigns that I have seen while I have been in the House. Given that enormous campaign, it seems clear that the introduction of statutory standards for environmental and social reporting is an idea whose time has come. When we consider that the joint stock corporation, as it used to be called, or limited liability company has been around for 200 years, this Bill and these amendments make a small, modest step towards restoring the balance of power with regard to the rights and responsibilities—to use the well-worn new Labour phrase—of corporations. For too long, companies have operated in a privileged twilight world beyond the reach of accountability. We have heard a lot of debate about veils recently. This Bill and the amendments are about lifting the corporate veil and providing not just shareholders, but for society as a whole—employees, communities and campaign groups—with reliable, up-to-date, accessible information about corporate responsibility and the impact of companies on society. During the 200 years in which corporations have existed, their power has waxed and, unfortunately, democratic power has waned. In terms of the broader context of the Bill and these amendments, it is therefore essential that we hold companies that have such an impact on our society and the world as a whole to account for their actions. After all, many of the ills faced by society today, whether environmental degradation or social injustice and inequality, do not stem from governmental action or inaction but from corporate irresponsibility. Therefore, the Bill and these amendments—I welcome the Government’s concessions—represent an important step in the right direction. I would go much further. The whole issue of limited liability is problematical. I am in good company here, because Adam Smith was against the whole notion of providing shareholders with a get-out clause. In this case, therefore, the hon. Member for Hemsworth is, unfortunately, to the right of Adam Smith, for the time being. The problem was captured famously by Edward Thurlow, a Lord Chancellor in the 18th century, who said that the problem with the corporation was that it had"““no soul to be damned and no body to be kicked””." In that phrase, he captured the problem of holding companies to account through the courts and legal system, and the problem of the human beings who own and run companies. Even where companies are found guilty of environmental degradation, it is difficult to hold individual directors or executives to account, unless one can demonstrate that they were directing minds.