The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Margot James)
I thank my right hon. Friend the Member for Loughborough (Nicky Morgan) for securing tonight’s debate on this very important subject and for the powerful and persuasive speech that she has made in support of her argument.
I recognise that she is seeking to protect the interests of those in the transgender community by ensuring their right to have their private information remain private. I have considerable sympathy with the personal accounts that she has shared in her speech this evening, and I can only conclude that the examples that she gives are backed up by many other people who have not come forward.
This debate highlights a difficult tension between two important principles: the right of an individual to have their private details remain private and not to be exposed against the also important need for transparency of the public register of companies. These rights are not easy to reconcile, but I very much agree with my right hon. Friend that we should make every effort to improve the situation that she described in her speech.
There are some very important reasons why the records of companies must be transparent and available for anyone to inspect. Incorporating a company and getting it registered at Companies House brings with it the benefit of limited liability to the owners and directors charged with running the company. In return for that significant benefit, directors of companies must provide details relating to their identity, residential address information and annual accounts of the company. That process gives anyone the ability to check business records and the trading history of people and businesses that they are dealing with or proposing to enter into business with.
It is only right that anyone should be able to check a director’s previous trading history or directorships, or any past disqualifications and bankruptcies. People might also want to know of their involvement in previous failed or successful businesses as important facts to consider when entering into business agreements.
In many ways, the register of companies is not just a list of companies with directors’ names. Its real purpose is to support the functioning of limited liability and to enable business trading across the economy through the information that it provides. It is that transparency that underpins its value and contribution. The register of companies is one of the most searched and interrogated databases worldwide. There were more than 2 billion searches on the website in 2016. It is also widely used by professional organisations—for example, credit reference agencies in determining whether to loan to prospective businesses, or professional researchers such as those engaged in transparency initiatives.
My right hon. Friend raises important statutory provisions—in particular that section 22 of the Gender Recognition Act 2004 does indeed make it an offence for a person who has acquired protected information in an official capacity to disclose that information. However, as she says, section 22(4) provides a number of exemptions, including section 22(4)(j) which says that
“the disclosure is in accordance with any provision of, or made by virtue of, an enactment other than this section.”
Section 12, together with section 163 of the Companies Act 2006, require directors to disclose their name and any former name to the registrar of companies. Sections 1085 and 1086 of that Act then place a duty on the registrar to make that information and other information delivered to them in relation to companies’ registration and filings available for public inspection. This is about the need for transparency as I mentioned previously.
Section 1087(1)(k) of the Companies Act does prevent the registrar from making certain information available for public inspection if required by another enactment. However, because of the carve-out in the Gender Recognition Act, information such as any previous names of directors, whatever the reason for the change of name, are not included in these exemptions.
The Gender Recognition Act 2004 does not make it an offence, as my right hon. Friend explained, to disclose this information when that disclosure is in accordance with another enactment, which is the case in respect of the Companies Act 2006. This therefore applies where a transgender person who is a company director has changed their name.
My right hon. Friend will know that the current pressures for information relating to companies and their directors is, in many respects, for even more transparency, rather than less. However, I do recognise that the register of companies should look to strike the right balance between the need for transparency and the protection of individuals and their private information. The current legal provisions already allow for certain information to be withheld from public inspection—for example, a director’s private residential addresses, where it is demonstrated that there is a risk of violence or intimidation arising from the activities of the company.
Since the register of companies became freely available online in 2015, however, a number of hon. Members have written to me raising their concerns about the range of private information that is now publicly available and easily accessible. As a result, my Department is considering a number of potential measures related to the integrity of the register of companies and the personal information that is available on it. I will most certainly ensure that the issue raised by my right hon. Friend is considered within that work. Although I can commit to consider the issue further, I would stress that the position of company director carries with it statutory duties and accountabilities. We need to guard against the creation of loopholes that would allow people to evade their responsibilities or to conceal their previous trading history by changing their name on the register.
Nicky Morgan
I thank the Minister for the way in which she is responding to my debate. I welcome the fact that she has talked about the wider consultation, but may I urge and push her just a little further to say that the matters I have raised tonight should be a part of that consultation—at least, the gathering of views to find out the scale of the problem? Will she also consider, again perhaps as part of the consultation, Alex’s comment to me that she is able to protect herself when it comes to her credit profile, her tax profile with Her Majesty’s Revenue and Customs, the Financial Conduct Authority register and the Government Gateway, all of which presumably—certainly the credit profile and tax profile—help in building up the transparent profile of somebody that the Minister has been talking about?
Margot James
I will certainly consider what my right hon. Friend said; she certainly makes a powerful case. Transparency will remain a high priority for the register of companies, but we must consider her arguments and I will consider what she asked for as part of our review.
As my right hon. Friend mentioned, the Government have committed to publishing a consultation shortly on amendments to the gender recognition process in England and Wales. We also recently launched a national survey on the needs of the LGBT population, which has just completed, receiving more than 100,000 responses. Both these consultations will be of help in shedding light on the issues raised in this debate, and I will consider further what my right hon. Friend has argued for tonight in that process.
Question put and agreed to.