Register of Overseas Entities (Protection and Trusts) (Amendment) Regulations 2025 Debate
Full Debate: Read Full DebateLord Sharpe of Epsom
Main Page: Lord Sharpe of Epsom (Conservative - Life peer)Department Debates - View all Lord Sharpe of Epsom's debates with the HM Treasury
(1 day, 19 hours ago)
Grand CommitteeMy Lords, the register of overseas interests—the ROE—was introduced under the Economic Crime (Transparency and Enforcement) Act 2022, which, if I may say, is an excellent Act. I know this to be true because I took it through the House of Lords with considerable advice and assistance from the noble Lords, Lord Fox and Lord Vaux—I have been looking forward to saying that, if I am honest.
The aim of the Act was to increase transparency regarding overseas entities, as has been noted—and let me thank the noble Baroness for her extensive introduction to these regulations. The primary objective was to ensure that beneficial ownership information was accessible, so that the public and authorities could better understand who owns land in the UK. However, as we consider these regulations and whether these measures truly enhance transparency or complicate the process and introduce further risks, we have a couple of concerns that are legitimate to raise.
The Government justify these amendments as a means to protect individuals at risk of violence or intimidation, while simultaneously permitting greater access to information on trusts. The reality is that these changes appear to broaden the scope of who can apply for protection as the noble Lord, Lord Fox, noted. That would make it easier for individuals to hide behind the shield of protection, even when they do not necessarily have a legitimate interest. It reads as if it is potentially an invitation to game the system. So I ask the Minister: are the Government convinced and happy that these regulations, as currently drafted, are robust enough to prevent that potential risk?
Additionally, the amendments propose new mechanisms to address trust information, but the conditions for such access, especially in bulk applications, also raise concerns about the potential for misuse. While the intention might be to make certain information available to those with a legitimate interest, the Government have only partially clarified what constitutes a legitimate interest, which we think leaves room for exploitation and, potentially, unnecessary legal battles.
There is also an application question as, again, the noble Lord, Lord Fox, mentioned. How will the registrar judge things such as how the disclosed information will be used? What criteria will they use to judge legitimacy? For example, is it okay if it was the Times of London asking and would it not be okay if it was some obscure online publication? How exactly will that situation be resolved? It is something I will come onto in a second, but will it be explained in greater detail in the explanatory guidance that will be published shortly?
These measures are proposed to expand the category of individuals who can apply to Companies House to have their information protected, where it may be disclosed under the register of overseas entities. It would also enable trust information on the register that is currently restricted from public inspection to be accessed by application if certain conditions are met.
A significant measure is that of the protection of information. Although expanding the categories of individuals who can apply for protection may sound like a good way to shield vulnerable persons, we are concerned that it risks creating opacity in the system where more people, beyond those in positions of risk, can hide their information from the public eye. The original purpose of the economic crime Act was to shed light on overseas ownership and its implications; we worry that that is now at risk of being undermined by this expansion.
As I and other noble Lords have noted, the Act aimed to simplify and enhance transparency, but these proposed changes seem to introduce additional layers of potentially complex bureaucracy. The process for accessing and protecting information could become more complicated, adding unnecessary burden both for the authorities responsible for managing the data and for the public. Will these changes create a more efficient system in the end, or will they merely add unnecessary red tape to an already complex regulatory landscape?
The Explanatory Notes say:
“Guidance will be made available”.
Can the Minister tell us when it will be made available and whether it will address some of these concerns, such as by going into considerably more detail on the definition of and circumstances surrounding “legitimate interest”? We agree with the Explanatory Notes that, if this measure is to work, extensive and expansive communications are absolutely key.
Broadly speaking, we support these regulations, of course, but we have legitimate questions. The noble Lords, Lord Fox and Lord Vaux, also asked legitimate questions, including about exactly how these regulations will be applied and so on.
I have one further question, which I meant to ask earlier. The Minister talked about national security interests in the context of legitimate interests. How can national security interests be reflected in Companies House when it is almost certain that nobody there will have sufficient security clearance to be told what the national security interest is in order to apply it in its decision-making process? Clearly, it will not forward every single application to someone who does have security clearance, so how on earth will this be mechanically organised?