Mr. Speaker,
I'll just breakdown why I think this bill is bad.
Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.
I think the assumption that is made here is the biggest problem in the bill. It's the assumption that corporations should contribute to society. There are the government, charities, volunteers and many other kinds of entities that have this function. In high school you learn that the main goal of companies is making profit. They contribute to the economy my providing services, goods, investments and making sure that consumption can happen by paying fees, I think that should be it. Having said that,
For the purpose of this bill, the phrase "monopolistic firm" shall be used to describe a firm with a market share of 25% or above in a market.
You should also define what you mean with markets. An electronic store might have a mere 5% share in the market for all the electronic goods but a 50% share in the market of TV remotes.
Any monopolistic firm with a revenue of between £100,000 and £250,000 are legally required to spend 1% of profit on acts of Corporate Social Responsibility.
Suddenly forcing higher burdens (1% could be quite a lot) is generally a bad idea even more so if you consider what kinds of businesses would be hit the hardest by this measures. Those whose revenue is near break even, the people for whom every penny counts. Even a few pounds could make a difference to those people, and you are now taking those from them.
When you go to the higher brackets you are talking about different problems. I'll try to break them down for you:
Bracket 2: Mostly small and middle sized businesses, usually the kind with an okay revenue but small profits. 3% means that they would have to cut costs as they need money to pay for investments in their own company. There's a maximum in how efficient they can get and eventually they will have to fire people. And people that usually work at these kinds of companies can't afford to lose their jobs.
Bracket 3, 4 and 5: The real deal. If you start taxing them this big (or forcing them to pay, whatever you want to call it) something called capital flight might occur. And that isn't just registering in a foreign country, this also means transferring people, assets and jobs to the new location. You are talking here about massive jobs loss, loss of investments, huge empty buildings and all sorts of troubles. And it won't be just rich people looking their jobs. And if they don't move to foreign countries than problems could be even bigger. Companies that generally run high revenue but low profit (retail, supermarkets) will have to lay off huge amounts of staff to prevent bankruptcy, not good.
This is to be performed in the subsequent year, and must be documented as such in financial documentation.
Who is going to pay for the administrative costs and the extra people needed to do this?
Payment to debtors is to take priority over acts of Corporate Social Responsibility.
Solution to all your problems, just take so much loans that you don't have any profit anymore. Perhaps you could even make the banks where you take the loans invest the 'lost profits' back into your company.
Acts of Corporate Social Responsibility are to take priority over the distribution of profits to shareholders.
How do you expect anyone to ever invest or buy stocks in a British company ever again?
This Act comes into effect 1st January 2016.
First of all this date has already passed, second of all even if you would be replace that with 2017 it would be such a short notice. Small business and no savings you, you're screwed. Just did a takeover and low on liquidity, you're screwed. I could go on forever.
I get the intention of this bill, I only don't think that this is the right way, it's to much to fast. If you want to do this then you should implement it gradually and start small. You're a member of the Labour party, you're supposed to make sure that people have jobs and that they keep them, not lose them.