07 July 2024

Shein London stock market float would trigger talks on tax, Reynolds suggests

07 July 2024

Fast fashion retailer Shein would be expected to meet “ethical and moral targets” on “all aspects of business” if it lists on the London Stock Exchange, according to the Business Secretary.

Jonathan Reynolds said he is “concerned” about a “loophole” which allows firms to avoid import duties by shipping small packages directly to customers.

He added he would want to discuss the issue with Shein if it was considering further business activity in the UK.

Ahead of the election, the Financial Times reported that the Labour leadership was resisting calls to close the tax loophole.

US legislators last year also called for Shein to be investigated over allegations that Uighur forced labour was used in the production of some of its clothes.

Mr Reynolds, asked if he would welcome Shein listing in the UK, told Times Radio: “I would because where any company is active in the UK, our aspiration should be that we regulate that company from the UK.

“That’s how we make sure that there are not things going on in terms of Labour practices or tax practices or environmental things that we’re not happy with.

“To be absolutely clear, if any company had forced labour in its supply chain it shouldn’t be doing business in the UK at all, it shouldn’t be a question of where it lists.

“But where companies are active in the UK, the best way we make sure they hit the standards we want to see is for them to be regulated from the United Kingdom and therefore if a listing was to be made, I’d want that listing to be here in the UK.”

He added: “Any publicly listed company in this country has to hit very high standards in terms of the disclosure of their working practices.

“I’d absolutely say that no listed company in the UK should have any kind of forced labour in its supply chain and should be meeting exactly the ethical and moral targets on tax and all aspects of business.”

Asked if he would close the tax loophole, Mr Reyolds said: “I would expect every company in the UK to pay its fair share of tax.”

Pressed further, Mr Reynolds said: “I am concerned about that particular loophole and will certainly be something I would want to be talking to them about if they were considering further business activity in the UK.”

In May, Shein said it was investing tens of millions of dollars in “strengthening governance and compliance across our supply chain, as well as in empowering our suppliers to build more successful and responsible businesses”.

Business Secretary Jonathan Reynolds leaving BBC Broadcasting House in London (Jeff Moore/PA) (PA Wire)

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