Written statement: Responsible Business Conduct - Nov 4

Secretary of State for Business, Innovation, Science and Trade and President of the Board of Trade (Jonathan Reynolds): My Hon Friend the Minister of State (Minister for Trade) (Lord Sarwar) has today made the following statement.

In the Trade Strategy, the Government committed to an evidence-based review of the UK's approach to promoting Responsible Business Conduct (RBC), to assess whether our current framework remains fit for purpose. This highlighted areas where the UK's approach could be strengthened and today, I am updating the House on the Government's proposed action to address those findings.

In our review, we found the UK's current framework for preventing forced labour to be fragmented and overly reliant on voluntary action and reporting measures. While the Modern Slavery Act 2015 was world leading at the time of its introduction, international standards and legislative practice have since moved on leaving the UK out-of-step with G7 partners and other major trading economies. While plans to strengthen the Modern Slavery Act through the Immigration and Asylum Bill are an important step, we recognise that further action is needed to bring us in line with key partners. Having carefully considered our findings alongside the Government's commitments on economic growth, reducing administrative burdens and maintaining the integrity of the UK internal market, we have concluded that a phased and proportionate approach is appropriate. The Government's priority is to focus on those interventions most likely to deliver tangible improvements for workers, consumers and businesses, while ensuring reforms are practical, targeted and capable of being implemented at pace.

We will legislate to introduce a mandatory human rights due diligence regime across the UK for services, and in Great Britain for goods. Only the largest businesses, with the capability and leverage to manage these risks within their supply chains, will be in scope. It will apply to UK businesses with a global turnover of over £350 million, as well as non-UK businesses with a UK-generated turnover of over £350 million. These businesses will be required to identify, assess and address risks of human rights abuses and labour exploitation within their operations and supply chains. The regime will be risk-based, proportionate and reflect how responsible businesses already manage risk by aligning with established international standards, including the OECD Guidelines for Responsible Business Conduct and the UN Guiding Principles on Business and Human Rights.

Under this due diligence regime, we will introduce powers to be able to remove goods made with forced labour from the Great Britain market. A regulator will be empowered to investigate businesses suspected of placing such goods on the market and, where due diligence obligations have not been met and forced labour is identified, direct their withdrawal. This will provide a clear and targeted mechanism for tackling some of the most serious abuses in global supply chains and protecting responsible businesses from unfair competition.

In Northern Ireland, we will apply the EU's Forced Labour Regulation (EUFLR) under the Windsor Framework. Both regimes ensure goods made with forced labour can be withdrawn from the market and aim to deliver a similar effect in practice.

Alongside this we will establish a centralised responsible business conduct guidance hub on GOV.UK, bringing together guidance, tools and templates in a single location. This will support businesses, particularly those developing due diligence processes for the first time. We will work closely with stakeholders on the design and implementation of these measures and introduce them as soon as parliamentary time allows.

The Government is clear that reform must be proportionate and pragmatic. Requirements will focus on larger businesses best placed to manage supply chain risks, prioritise action over unnecessary paperwork, and align with international standards.

This package will safeguard the competitiveness of responsible businesses, strengthen confidence in UK markets and help ensure that goods linked to forced labour do not reach UK consumers. The British public rightly expect that products sold in the United Kingdom are not tainted by forced labour. Responsible businesses should not be undercut by those that turn a blind eye to exploitation. And this Government will not countenance exploitation in the supply chains that serve the UK market.