A business accreditation scheme should be established in a bid to curb firms’ bad behaviour, according to John McDonnell.

The Labour MP said that a system must be set up which celebrates good business practice, whilst not lending support to those who fail to live up to basic standards.

Speaking as he introduced a 10-minute rule motion in the Commons, the former shadow chancellor criticised the actions of several large companies during the Covid-19 pandemic.

Within our economy, the pandemic has exposed much of what's good, but also regrettably some of what's just not acceptable

He told the Commons: “The pandemic has made us all think about what we value in life and reassess how our society and our economy operates.

“And of course our main focus has been on how we tackle and get through the pandemic, but there has been a view expressed by many including the Prime Minister that lessons should be learned from the crisis.

“And he and others have said as we come through the pandemic, we must build back better.

“This Bill is part of that process of building back better.

“Within our economy, the pandemic has exposed much of what’s good, but also regrettably some of what’s just not acceptable.”

Mr McDonnell cited companies including baking firm Warburtons and home entertainment retailer Richer Sounds as having protected their employees during the pandemic.

But the former shadow chancellor criticised firms such as British Airways, Boohoo and Amazon over working conditions, levels of tax paid and decisions on furloughing staff.

He said: “If we are to learn the lessons and build back better as the Prime Minister has urged us, we need a system that recognises and celebrates good practice in our economy.

“And one that certainly does not lend support to those that fail to live up to basic business standards and undercut others that do.

“This Bill seeks to introduce a system for exactly that by accrediting businesses on their behaviour in a number of key areas – the treatment of their employees, their impact on the environment and their payment of taxes.

“The aim of the accreditation process is to enable the acknowledgement and celebration of good business practice and good businesses.

“At the same time, it will provide the basis for judging whether a business is upholding its responsibilities to its employees and the community.”

Mr McDonnell proposed that an independent good business commission, based on the model of the Low Pay Commission, would be established and be comprised of representatives from businesses, trade unions, environmental organisations and the Tax Justice campaign.

He explained that the commission would have responsibility for determining the criteria by which a business will be assessed as good business, with businesses encouraged to seek accreditation with the award of a good business status potentially “significantly enhancing” their reputation.

The Labour MP for Hayes and Harlington continued: “During the Covid pandemic, the Government has introduced a number of schemes to support businesses to cope financially with the downturn in the economy resulting from the lockdown and social distancing protective measures.

“Across the House, we welcomed those schemes, sometimes argued that they’ve not gone far enough, but welcomed them in principle.

“But there have been concerns expressed across the whole House about the lack of conditions attached to much of this aid.

“And as a result, there has been no attempt to influence the behaviour of these companies, in particular the treatment of their employees.

“And the behaviour of some, yes it may be a limited some, has been unacceptable as they’ve used the pandemic crisis as an excuse to implement sometimes long-held strategies of cutting wages and undermining terms and conditions and employment.

“A business accreditation scheme would be an effective basis for conditionality in the award of government support.”

Scottish Labour leader Richard Leonard has indicated his support for the proposals put forward by Mr McDonnell with a motion at Holyrood.

He said: “For too long, some big firms with the broadest shoulders and the deepest pockets have been allowed to exploit the taxpayer and their workers.”

Mr Leonard added: ““While this legislation is reserved to Westminster, as Scottish Labour leader I will not stand by and allow these practices to continue.”

Mr McDonnell requested that the Bill be given a second reading on November 27, but would need Government support in order to progress further.