AMENDMENT OF COMPANIES ACTS AS TO DIRECTORS' REPORTS (Hansard, 18 June 1974)

§ The Under-Secretary of State for Employment (Mr. Harold Walker)
I 242 beg to move, That the clause be read a Second time.
The clause amends the Companies Act 1967 so as to enable us to require directors to include in their annual reports to shareholders information about what their companies are doing on health and safety matters.
The clause follows up a recommendation of the Robens Committee, and, of course, is very much in line with current thinking. In Chapter 2 of its report, the committee recommended that directors' reports should be required to include prescribed information about accidents and diseases suffered by the company's employees, and about measures taken by the company in this regard.
The Robens Committee made this recommendation because it considered that a requirement of this kind would stimulate more effective interest in health and safety at board level. It thought that it would concentrate the minds of chairmen and directors most wonderfully if the company's health and safety performance had to be accounted for in public.
I share their views. I also think that a requirement of this kind is a valuable addition to the amendments that we have been making to the Bill, designed to strengthen its provisions for stimulating the free flow of information. It is surely right that information of this kind should be published. I hope, too, that shareholders will take an interest id what is said, and will be as interested in a company's safety record as they are in its profitability. Perhaps companies will be able to learn from each other by this means. Many companies have extremely good safety and health policies, which could serve as an example to others, and the inclusion of information about these policies in annual reports will provide a good opportunity to draw attention to what is being and can be done.
During Second Reading several hon. Members noted the omission of any follow-up of this Robens recommendation. I said then that this requirement would be included in future new companies legislation. But, in view of the importance of the subject, I think we are fully justified in amending the Companies Act in this one respect in advance of the more comprehensive amendments which are planned for later legislation.

§ Mr. David Madel (Bedfordshire, South)
We on this side of the House welcome the new clause.
I was particularly interested in what the Under-Secretary of State said about the need for shareholders to be equally conscious of their firm's safety as well as its profit record. I also liked what he said about the need for companies to learn from each other by publishing in annual reports information on their health and safety records.
I hope that the Minister will confirm that my thinking on the clause is correct. In line 8 it states, and its subsidiaries and for protecting other persons against risks to health or safety". I assume that this is intended to strengthen Clause 3 and in a sense could be tied in with Amendment No. 25, which we shall be discussing later. In other words, there is a need for companies to pay attention to health and safety matters involving people who live near their work unit.
We certainly accept the clause and welcome what the Minister said about it. I ask him to confirm that my thinking is correct vis-à-vis Amendment No. 25 and Clause 3. We certainly wish the clause to be incorporated in the Bill.

§ Mr. Michael Latham (Melton)
I support the clause and wish to add my voice to what was said by my hon. Friend the Member for Bedfordshire, South (Mr. Madel).
I should like to ask the Under-Secretary of State two questions to which I realise he may not be able to give answers off the cuff.
Paragraph (g), which is proposed to be put into the Companies Act 1967, states, in the case of companies of such classes as may be prescribed by regulations made by the Secretary of State, contain such information as may be so prescribed". Those of us who served on the Committee know that a great deal in the Bill is to be dealt with by regulations. It would be helpful to the House if the Minister would share with us any ideas that he has about the size of the companies involved and the nature of the disclosures. It may be that he is still thinking about the matter. However, while fully supporting the clause, I suggest that there should be the fullest consultation with industry about this matter, 244 because it is essential that these should be practical requirements. We discussed this aspect many times in Committee.

§ Mr. Harold Walker
I confirm right away the understanding of the hon. Member for Bedfordshire, South (Mr. Madel). This matter can be seen in the context of Amendment No. 25 and the further provisions for information contained in it.
The hon. Member for Melton (Mr. Latham) will recognise that we are acting in accordance with the structure of the Bill. This is an enabling Bill, as he will readily appreciate.

§ Mr. Walker
I am glad to note the hon. Gentleman's assent. Therefore, it is right not to spell the matter out in the Bill, but to provide the powers embodied in the proposed clause. I share the hon. Gentleman's view about the need for consultation. It would be wrong for me at this stage to try to anticipate the necessary consultations and to diminish the flexibility of the way that we shall proceed. We want to be flexible and we shall have the consultations.