Draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025
Draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025
Draft Register of People with Significant Control (Amendment) Regulations 2025
(4 weeks ago)
General CommitteesRead Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I beg to move,
That the Committee has considered the draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025.
The Chair
With this it will be convenient to consider the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 and the draft Register of People with Significant Control (Amendment) Regulations 2025.
Justin Madders
It is a pleasure to see you in the Chair, Mr Twigg.
This set of regulations is part of the Government’s secondary legislation programme implementing the Economic Crime and Corporate Transparency Act 2023, which I will refer to hereafter as the 2023 Act. The 2023 Act is a crucial tool in supporting the Government’s aim to combat economic crime, improve corporate transparency and increase trust in the UK’s business environment. It delivers the most significant reforms to Companies House in more than 180 years. It was brought in by the previous Government, but we are pleased to carry on implementing its provisions. Companies House has already made significant progress in implementing the reforms since the 2023 Act became law, including by removing false and misleading data. For example, from 4 March 2024 to 31 July 2025, Companies House removed 113,300 registered office addresses, 88,000 officer addresses and 71,000 PSC—persons with significant control—addresses.
April this year saw Companies House launch its identity verification service. Hundreds of thousands of individuals have already successfully verified their identities. Reaching that major milestone has ensured that both customers and Companies House are ready for the introduction of mandatory identity verification in November. Identity verification is the centrepiece of the Companies House reforms. The statutory instruments before the Committee today will support the delivery of identity verification, and include other technical reforms that relate to the PSC framework.
First, the draft Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 apply several of the reforms to companies contained in the 2023 Act to limited liability partnerships, or LLPs. In particular, the instrument introduces identity verification for LLP members and PSCs, and prohibits disqualified directors from acting as an LLP member. It removes the requirement for LLPs to keep their own local registers of members and PSCs. Going forward, LLPs will report their member and PSC information directly to Companies House. Extending company reforms to LLPs ensures that the law applies equally across different corporate entities. Not only will that minimise opportunities for LLPs to be misused by criminals; it will ensure that both LLPs and their customers benefit from a more transparent and reliable business environment.
The draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025 are largely technical, and will ensure the smooth implementation of key elements of the 2023 Act. The instrument makes necessary consequential amendments to primary and secondary legislation following the removal of the requirement for companies and other entities to retain their own local registers of directors, secretaries and PSCs. Instead of those local registers, there will be only one central register at Companies House. Searchers will therefore be able to rely on a centralised Companies House register as the definitive version.
The draft regulations will also introduce provisions to support the roll-out of identity verification through the mandation of unique identifiers. These codes are generated for each verified individual, and will be used to prove an individual’s verified identity status. Not proceeding with the instrument would mean that crucial parts of the Companies House reform package would not be able to operate properly. The draft regulations will ensure that the legislative framework is consistent, and prevent references to repealed provisions from persisting in law.
Finally, I move to the draft Register of People with Significant Control (Amendment) Regulations 2025. This instrument makes technical amendments to the PSC regime, the Companies Act 2006 and the Register of People with Significant Control Regulations 2016. It ensures that certain important information relating to PSCs, including additional matters that were previously recorded in local registers, is now reported to Companies House. These changes will maintain the completeness and accuracy of the PSC information on the register.
I highlight that the explanatory memorandum to this instrument contained a small error when initially published: paragraph 5.3 referred to the Limited Liability Partnerships (Application and Modification of Company Law) Regulations 2025 by the wrong title. I am sure that Members were about to intervene on me on that point. I confirm that it has now been corrected.
I stress that all these regulations are needed to make the UK a safer and more transparent place to do business. Businesses, the regulated sector and other users of the company register will benefit from more accurate and reliable data to inform their transactions. I commend the draft regulations to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
It is a pleasure to serve under your chairmanship, Mr Twigg, and to discuss these three measures, which implement reforms from the Economic Crime and Corporate Transparency Act 2023. It was interesting to hear from the Minister the latest statistics on the impact that the Act has already had at Companies House. These measures will require limited liability partnerships to have increased reporting requirements and to carry out further checks on their staff by barring disqualified directors from roles within LLPs. The instruments also abolish local registers in favour of a central Companies House database and create criminal offences for non-compliance.
Will the Minister elaborate on what he expects the criminal offences for non-compliance to be? What capacity is there in the criminal justice system to add to its activities? The Product Regulation and Metrology Act 2025, which he and I spent so many happy hours discussing before the summer recess, has added further criminal penalties, so I am concerned about the pressure that some perhaps inadvertent breaches of these measures will add to our hard-pressed criminal justice system.
Will the Minister update the Committee on the benefits of these measures in terms of reduction of harm? He acknowledges in the explanatory memorandum that this is a further cost burden on a business sector that is already groaning under the additional tax and red tape added by this Government in their first 14 months. It is not just the unprecedented tax hikes on business from the Halloween Budget and the regulatory burden from the Product Regulation and Metrology Act, but the upcoming £5 billion cost of the Employment—or should I say unemployment—Rights Bill, which is looming like a tsunami on the horizon for businesses, jobs and start-ups.
While these measures may seem noble in their aims, they add an additional cost to businesses, including the most precious of businesses: new businesses, start-ups, innovators and investors—the future of our business sector. These measures are just another example of this Government’s increasing red tape on business. According to the Government’s own figures, just a slice of the measures that we are assessing today will cost businesses another £19.5 million every year. That excludes some of the other measures before us this afternoon, which the Government have not itemised in their impact assessment. While £19.5 million may sound small compared with the £5 billion cost of the Employment Rights Bill, I remind the Minister of the risk of incremental regulatory creep—an impact that is focused on partnerships, which are driving up costs on small businesses such as law firms. Will the Minister commit this afternoon to publishing the outcome of these measures in a year’s time? How will he measure how many LLPs have been put off registering here and have gone to other jurisdictions?
The impact of this creep of red tape is something that the Opposition understand, but clearly the Government are at risk of forgetting. Red tape deadens growth. Red tape costs jobs. We will not actively vote against these specific measures, but let me emphasise that the businesses and entrepreneurs of this country cannot take any more regulatory creep, or any more of the taxes that this Government are inflicting on them. I urge the Government not to come back here with more. His Majesty’s loyal Opposition will demand some deregulation measures in future before supporting more incremental burdens like these measures.
Justin Madders
I welcome the shadow Minister back after the summer recess. It is a little disturbing—discombobulating, possibly—to hear the Opposition arguing against legislation that they introduced when they were in government, although it is not the first time, I suppose. I think that there was cross-party agreement in the previous Parliament that it is important to clamp down on economic crime by ensuring the integrity of the Companies House register and that it is accurate and up to date.
Mr Luke Charters (York Outer) (Lab)
I share my hon. Friend’s discombobulation. I had a career in countering financial crime before entering this place. Shell companies are rampant, and Companies House needs these powers. Ultimately, when it comes to fraudulent claims against the public purse, His Majesty’s Revenue and Customs and others across the public realm are all dependent on Companies House reform. Director identity verification is necessary and proportionate, and as my hon. Friend said, it is discombobulating that the Opposition oppose it.
Justin Madders
I thank my hon. Friend for his intervention. I think that is now three references to “discombobulating”. That is quite a record for this early in September. Members have been pretty clear about the value of this legislation and the draft regulations that we are debating today, and it is disappointing that we have heard them wrapped up in an argument about red tape.
The Companies House data is currently valued by business users—the people who actually invest in business in this country—at between £1 billion and £3 billion a year. It is a hugely important tool for investors and other businesses to understand the business environment, so the reliability of that data is paramount. These reforms will ensure that people know who they are dealing with, that those people’s identities have been verified, and that we do not have the plethora of fake companies that have been set up on the register in recent years. We all know the consequences of that.
The shadow Minister mentioned enforcement, and made reference to the burdens on it. The Insolvency Service is generally responsible for any prosecutions under the legislation, but between September 2024 and August 2025, 99% of the entities that were required to record a PSC did so correctly at incorporation. It is quite often the case that those that have not responded are not doing so because the companies simply are not active any more and have been taken off the register.
Part of the new landscape is that the fees that are charged by the various bodies for registering are meant to be on a cost-recovery basis, and the number of fines issued and prosecutions pursued are part of that overall landscape. It is important that there is proportionate but effective enforcement. The shadow Minister asked what we will be doing in terms of outcomes. We will certainly expect Companies House to do regular reports on the numbers of companies that have incorporated, and where there are issues with people not providing IDV or details of the PSC. I have given some further information about progress to date, but when the full system goes live in November, I fully expect Companies House to provide regular updates to Members about progress on that. On that note, I commend the draft regulations to the Committee.
Question put and agreed to.
DRAFT ECONOMIC CRIME AND CORPORATE TRANSPARENCY ACT 2023 (CONSEQUENTIAL, INCIDENTAL AND MISCELLANEOUS PROVISIONS) REGULATIONS 2025
Resolved,
That the Committee has considered the draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Incidental and Miscellaneous Provisions) Regulations 2025.—(Justin Madders.)
DRAFT REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL (AMENDMENT) REGULATIONS 2025
Resolved,
That the Committee has considered the draft Register of People with Significant Control (Amendment) Regulations 2025. —(Justin Madders.)
Draft Free-Range Poultrymeat Marketing Standards (Amendment) (England) Regulations 2025
(4 weeks ago)
General CommitteesRead Hansard Text Read Debate Ministerial Extracts
The Minister for Food Security and Rural Affairs (Daniel Zeichner)
I beg to move,
That the Committee has considered the draft Free-Range Poultrymeat Marketing Standards (Amendment) (England) Regulations 2025.
It is a pleasure to serve with you in the Chair, Sir Jeremy. I warmly welcome everyone back, and hope they had a good break.
This statutory instrument has been laid to amend existing legislation governing poultry meat marketing standards, to enable free-range poultry meat to be marketed as such for the duration of mandatory housing measures introduced during disease outbreaks—such as avian influenza—that restrict access of birds to open-air runs. All other criteria on which the free-range marketing term relies, such as stocking density, age at slaughter, feed formula and poultry house pop-holes, must continue to be met.
Sadly, outbreaks of avian influenza usually occur during the winter months, as was the case in 2021-22, 2022-23 and 2024-25, resulting in the introduction of mandatory housing measures for poultry, which in all cases have lasted longer than the 12-week labelling derogation period. That was for an additional 10 weeks in 2021-22, 11 weeks in 2022-23 and, most recently, eight weeks in 2024-25, so it will be important for the industry that the statutory instrument is in place for the upcoming winter period and beyond, in the event that we experience another avian influenza outbreak.
Currently, when free-range birds are placed under mandatory housing measures due to disease outbreaks such as avian influenza, the poultrymeat marketing standards regulations allow poultry meat to continue to be labelled as free range for a maximum period of 12 weeks, known as the 12-week derogation period. After that, poultry meat from those birds has to be marketed as indoor-reared.
In 2024, the Department for Environment, Food and Rural Affairs held a joint consultation on these proposed changes, working together with the Scottish Government. Of the respondents, 79% supported the removal of the derogation. A separate consultation was conducted by the Welsh Government. The European Commission also consulted on plans to remove the 12-week derogation period from its legislation. In line with the Windsor framework, any changes to EU legislation, when introduced, will also apply to Northern Ireland.
The current requirement for poultry meat producers and processors to downgrade free-range poultry meat once the derogation period is exceeded represents a financial burden, primarily related to the need to incur the higher operating costs of maintaining their free-range system, with the additional cost of having to ensure that birds are also temporarily housed indoors, combined with the loss of income from the premium price that free-range products attract.
The statutory instrument will remove the 12-week derogation period, so that free-range poultry meat producers and processors can market poultry meat as free range for the duration of a mandatory housing measure, however long that may last. With the EU introducing a similar change to its legislation, the introduction of the statutory instrument will enable English free-range producers and processors to continue to operate on a level playing field commercially with producers in the EU and Northern Ireland. As broiler chickens are generally slaughtered before reaching 12 weeks of age, the removal of the derogation will apply primarily to higher-value free-range birds with longer production cycles, such as turkeys, ducks and geese.
We are working closely with devolved Governments to align the introduction of the planned changes. A statutory instrument will be laid in the Scottish Parliament in early September 2025 to amend their domestic regulations in relation to the removal of the 12-week derogation period. We anticipate the Welsh Government will make an announcement shortly regarding the removal of the 12-week derogation period within their legislation.
The change to be introduced by this statutory instrument will safeguard our British poultry meat industry by reducing costs, continuing to ensure it is competitive against imports, and by protecting the value of its products without compromising our high welfare and food safety standards, rightly expected by UK consumers and our trading partners.
Robbie Moore (Keighley and Ilkley) (Con)
We should all be extremely proud of our animal welfare and food quality regulations. As a nation, we have a proud history of ensuring that food is as safe and high in quality as possible, and that it has not come at the unnecessary distress or harm of any animal. It is important too that our labelling laws are accurate and properly reflect the product being purchased. Free-range poultry is a key requirement for many consumers, and they should expect a minimum standard of freedom for poultry sold as such.
We must, however, recognise that the value consumers place on free-range poultry is primarily due to concerns for the welfare of the animal. It is therefore logical that should a bird have to be kept indoors for its own welfare and to prevent the spread of disease, no welfare violation has taken place. Given a choice between a bird being kept indoors and its contracting avian influenza, we in the Opposition are confident that consumers would rather see the bird’s welfare protected, even if the bird is nominally free range and would be so under normal circumstances, as was laid out by the Minister. It is noted that the statutory instrument will also ensure that poultry producers are not left at a competitive disadvantage. We therefore support the Government’s decision to amend the existing regulations.
Question put and agreed to.
Draft Online Safety Act 2023 (Qualifying Worldwide Revenue) Regulations 2025
(4 weeks ago)
General CommitteesRead Hansard Text Read Debate Ministerial Extracts
The Chair
Before I call the Minister to move the motion, I point out that the regulations before us are fairly narrowly drafted and this is therefore not the place for a more discursive debate on the Online Safety Act 2023.
The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Feryal Clark)
I beg to move,
That the Committee has considered the draft Online Safety Act 2023 (Qualifying Worldwide Revenue) Regulations 2025.
It is a pleasure to serve under your chairmanship, Dr Murrison. I will first give a very brief background to why the Government are laying this statutory instrument. As the Online Safety Act sets out, Ofcom may make regulations setting out how the qualifying worldwide revenue of a provider of a regulated service is to be determined, and the corresponding qualifying periods. The Act requires that Ofcom sends a draft to the Secretary of State for Science, Innovation and Technology; the Secretary of State’s role is limited to laying the draft before Parliament. As such, the Secretary of State laid these regulations before Parliament on 26 June.
The draft regulations are a critical component of establishing the fee regime whereby providers of regulated services pay a fee to Ofcom to fund the costs of online safety regulation. They are also an integral part of informing a penalties regime that will act as a suitable deterrent to non-compliance.
The qualifying period for calculating the QWR is defined as the calendar year two years prior to the fee-charging year. For example, for the 2026-27 charging year, the qualifying period will be 1 January to 31 December 2024. Under the Act, non-compliant providers may be subject to penalties of up to £18 million or 10% of their QWR, whichever is higher.
The Government are committed to a fee regime that ensures that the burden of paying for online safety regulation falls not on the taxpayer, but on the providers in scope of the Act—a principle that was discussed in great detail and that received cross-party support during the passage of the legislation through Parliament. In a policy statement that was published on 26 June and was informed by a public consultation, Ofcom recommended to the Secretary of State a qualifying revenue threshold of £250 million, saying that this
“strikes the right balance between proportionality and workability, spreads the fee burden across a range of providers and serves the objective of limiting the impact on SMEs.”
The Secretary of State will consider that advice carefully and set the final threshold in a separate SI later this year.
The Secretary of State will also consider any exemptions to the fee paying, as recommended by Ofcom. Ofcom will then set out its final policy decision and a statement of charging principles, and publish final guidance to providers. It intends to begin invoicing providers for fees in 2026-27.
The Act gives Ofcom, as the independent regulator, the responsibility for drafting these regulations. The Government are committed to establishing a fee regime to ensure that the cost of online safety regulation is borne by the companies that receive revenue from the regulated online services. These regulations are fundamental to allowing Ofcom to do that. If approved today, they will come into force later this year. With that, I commend the draft regulations to the Committee.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure to serve under your chairmanship, Dr Murrison. Thank you for your guidance at the start of the debate. Given the narrow scope of this SI, I will make some very brief introductory remarks about the Online Safety Act before going into the detail of the SI.
Nearly two years ago, under the last Government, the groundbreaking Online Safety Act was enacted with the purpose of protecting people online. Rightly, the strongest protections in the Act were designed for children. Every day, children are subjected to harmful content affecting their views of society, relationships and themselves. The Online Safety Act is an essential tool to address that. It has faced much opposition and still faces challenges today, but it provides the template for the most robust online safety framework in the world. It is a measure that I am very proud of, but we must now work to ensure that the provisions are implemented and enforced effectively.
Realising the essential protections built into the Online Safety Act is dependent on high levels of industry compliance. I hope that we will have future opportunities to debate the wider provisions of the Act, including the effectiveness of age verification and the definition of “harmful content”, but today we rightly focus on fees and enforcement. The draft regulations set the parameters for how we define and calculate companies’ turnover in order then to then calculate both fees and maximum penalties, should they be incurred. The SI is therefore very technical in scope, but important.
The Act requires that Ofcom’s operating costs for the online safety regime are covered by providers of regulated services through a fees regime, and it is vital that that is apportioned fairly. Fines are powerful sanctions available to Ofcom, but they must be proportionate to the company and the scale and breadth of the infringement, so that companies in breach of their duties under the Act can be held to account in a way that will not only penalise non-compliance but encourage a material change in operation.
Sir John Hayes (South Holland and The Deepings) (Con)
I know that the purpose of these regulations is to clarify and provide for the definition of revenue in accordance with the original legislation. I simply say to the Minister that this is a helpful further step, building on the progress that my hon. Friend the shadow Minister has described. It is vital that we ensure that these measures are implemented by Ofcom regularly and with enthusiasm where online providers are doing damage; that is their purpose. Parliament as a whole took too long to regulate the internet. The last Government did the right thing in doing so, and now we need to use this instrument to its full effect.
Victoria Collins (Harpenden and Berkhamsted) (LD)
Keeping children and vulnerable people safe online is vital. For far too long, the online world has been a wild west, where children are subject to a torrent of harmful content, from pornography to suicide promotion. The call for this measure has come not only from parents, teachers and experts, but during my safer screens tour in Harpenden and Berkhamsted, young people themselves told me that the algorithms are pushing explicit and harmful content that they do not want to see. The topic is so important that students from Ashlyn’s and Berkhamsted schools have joined forces to lead the work themselves.
Today this Committee looks at qualifying worldwide revenue, which is important as it is linked to the level of fines. With the roll-out of the Act, the Lib Dems call on the Government to ensure a review of Ofcom fines to ensure they are enforceable and act as a true deterrent, especially given the pushback already seen from companies. We also ask Government to ringfence the fines generated by Ofcom under the Online Safety Act, for purposes including funding the provision of stand-alone education on online safety and safer screens for all school children.
Overall, it is important to highlight that the Online Safety Act contains vital safeguards against priority illegal content, requiring online platforms to tackle material depicting offences including child sexual abuse, intimate image abuse and sexual exploitation, but we know that concerns have been raised by many about the implementation of the Act, including about its effectiveness in preventing online harms and its impeding access to educational sites and important informational forums. Concern has also been voiced that age-assurance systems may pose a data protection or privacy threat to users. We therefore believe Parliament should have the opportunity to properly scrutinise Ofcom’s implementation. We use this opportunity to again call on the Government to conduct a full and urgent parliamentary review of the Act, to ensure that it meets its stated aim of keeping children and other vulnerable groups safe online, and to determine whether the Act is fit for purpose.
Michael Wheeler (Worsley and Eccles) (Lab)
It is a pleasure to serve under your chairmanship, Dr Murrison. I have a couple of questions about the SI. Having worked for a regulator that was similarly funded by a charge on those regulated and the ability to levy fees, I question what power we are giving Ofcom to collect the fees charged. Is it explicit in the Act? It does not seem to be explicit in the SI. How is the penalties regime, albeit it relates to a different percentage of global revenue, actually worked out? Is global revenue worked out on the same method as that for the GDPR, under which companies can similarly be charged a proportion of global revenue if they get things wrong?
Feryal Clark
I thank both Opposition spokespeople, the hon. Member for Harpenden and Berkhamsted and the hon. Member for Runnymede and Weybridge, for their very positive approach and their comments on the SI. I also thank the right hon. Member for South Holland and The Deepings for his contribution. The Government appreciate the wealth of knowledge that the House brings to debates on online safety. Members made a vital contribution to the Online Safety Act during its passage, and they continue to dedicate their time and expertise to ensure that the Act is implemented to its full potential.
Today, many of Ofcom’s powers are in effect and platforms are now legally required to protect children from harmful content. This includes rolling out highly effective age assurance to tackle pornography and content relating to suicide and self-harm, and eating disorders. The instrument will bring us one step closer to a fully implemented online safety regime by ensuring that companies raising revenue from online services cover the costs of regulation, not the taxpayers, and that those companies take responsibility for keeping children safe online. The hon. Member for Newton Abbot asked about similarities with GDPR. I was not around when the legislation went through, so I shall have look into that and get back to him in writing.
I will take no more of the Committee’s time. I hope the Committee agrees with me on the importance of introducing regulation to implement the fee regime.
Question put and agreed to.