Norwich MP Clive Lewis says ‘BHS law’ proposals would not have prevented the scandal

Clive Lewis speaking in the House of Commons PA Wire

Clive Lewis speaking in the House of Commons PA Wire - Credit: PA

BHS and Sports Direct scandals may not have been stopped by proposed rules to curb business excesses which have been set out by the government, Labour MP Clive Lewis has said.

The Norwich South MP said he was not wholly convinced the package outlined by ministers would have prevented 'the corporate governance scandals that have plagued the last summer'.

He was speaking in the House of Commons chamber after a blueprint for changes was published today after Theresa May said during her leadership campaign that she would introduce changes which would have 'not just consumers represented on company boards, but employees as well'.

But has been accused of a u-turn after she backed away from the idea of putting workers on boards in a speech to the CBI last week.

Business secretary Greg Clark told MPs that the document asked whether there were measures which could increase the connection between boards of directors of companies and their employees and customers.

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He defended the proposals, saying BHS and Sports Direct were two bad examples of an area where British businesses have a strong record overall.

But Mr Lewis said: 'Bringing private companies into the PLC rule book strikes one as a move so targeted at a particular series of events, that it will, I expect, come to be known as the BHS law.

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'But had the proposals outlined today by the secretary of state been in place six months ago, I'm not wholly convinced that we would have avoided the corporate governance scandals that have plagued the last summer.

'To force private companies to abide by the corporate governance code will do little unless that code is tightened.

'BHS may have been a private company, but Sports Direct isn't, and we all know what has gone on there.'

Mr Lewis said the Government needed to shake up the diversity of company boards in order to bring about wider changes, and that 'inherent short-termism' had seen the long-term health of companies sacrificed 'for a quick buck'.

He added: 'When the unacceptable face of capitalism surfaces, as it has in the last few months with the scandals in BHS and Sports Direct, what we are witnessing is the extreme manifestation of these broader problems.'

Mr Lewis's statement was cut short by Commons Speaker John Bercow, who censured the shadow business secretary for exceeded his time limit without asking Mr Clark any questions.

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