Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill

Alison Thewliss Excerpts

Report stage & 3rd reading
Thursday 9th September 2021 Commons Chamber

[Peter Grant]

I am pleased to make a brief contribution to the debate. As I did at earlier stages, I will restrict my comments to the disqualification of directors, which is the only aspect of the Bill that extends directly to Scotland.

The SNP supports the Bill. Our concerns are the same as those of the official Opposition: that much, much more is needed than is included. We need a much more comprehensive set of regulations, not so much to protect shareholders and directors as to protect customers, members of the public and investors from the scams that have all too often been committed by companies whose shareholders are the directors. A lot of company legislation was designed to protect investors against misaction or misconduct by company directors who are different people, but we are now looking at companies whose directors are the shareholders. They are not going to defraud themselves, but sometimes they may be willing to defraud others.

At earlier stages, I have repeatedly mentioned the conduct of a group of companies called Blackmore Bond and its directors Phillip Nunn and Patrick McCreesh. I will not go over even a fraction of their history, but why they were not at least investigated for disqualification long, long ago is beyond me. The Bill will not make it easier for such directors to be called to order, so we need legislation that fills in the gaps that are left.

As an indication of just how current such behaviour is, the BBC reported as recently as Monday that DialADeal Scotland Ltd has been fined £150,000 by the Information Commissioner’s Office for making more than half a million illegal marketing calls, many to numbers that had explicitly opted out of such calls. DialADeal Scotland Ltd used false business names in its marketing, which is illegal. It disguised the number that it was calling from so that people could not phone back to complain, which is also illegal. The calls were about non-existent green deal energy savings schemes. That is not a telecoms offence; it is fraud or attempted fraud, and very probably conspiracy to defraud.

The fine was decided in September 2021, but clearly the action by the Information Commissioner’s Office started before then. In May 2021, the directors of the company, Calum Mckay Kirkpatrick and Yvonne Mccuaig, applied to Companies House to place the company in voluntary liquidation—almost certainly with the sole purpose of avoiding the financial penalty that they knew was coming their way, because if the company were dissolved before the order was made, its directors would get off scot-free. Fortunately, the Information Commissioner’s Office was able to lodge an objection with Companies House and the voluntary strike-off action has been suspended.

The same two individuals, Kirkpatrick and Mccuaig, were also directors of DialADealUK Ltd, which was voluntarily dissolved in September 2018, immediately before DialADeal Scotland Ltd was created. Coincidentally, shortly after they had started the process of winding up DialADeal Scotland Ltd, they set up another company called Simple Lead Ltd. Not one of those companies has ever filed a set of accounts with Companies House; DialADeal Scotland’s accounts are now over a year out of date.

Why is it that company directors can repeatedly avoid any kind of scrutiny? As I have mentioned in relation to Nunn and McCreesh’s companies, they can go for years and years without filing the very limited information that they have to file at Companies House, which just does not seem able to keep up.

[Alison Thewliss (Glasgow Central) (SNP)]

My hon. Friend makes a very good point about Companies House and its limitations. Does he share my concern that the UK Government just do not care enough about Companies House and the massive loopholes that they are leaving for people to be defrauded and company directors to get away scot-free with the wrong things that they are up to?

[Peter Grant]

That would certainly be many people’s interpretation of how long it has taken the Government to take any firm action. We keep being promised a comprehensive review of company legislation; it cannot come quickly enough. I hope that we will finally see an end to the scandal of the creatures called Scottish limited partnerships, which are too often set up purely as a means to fund organised crime.

Companies House needs to be reformed and probably better resourced. As the Opposition spokesperson—the hon. Member for Manchester, Withington (Jeff Smith)—mentioned, the Bill may place additional demands on the resources of the Insolvency Service. We know that the Financial Conduct Authority needs another complete sorting out. Either it is not doing its job or it has not been asked to do the right job; it probably does not have the resources to deal with fraud on the scale that is now going on right under our nose.

Although I welcome the Bill and we will certainly not oppose it—we have supported it all the way through—we look for assurances from the Government that it is not the end of the road. It can only be allowed to be one tiny step towards finally stopping these people. I remember one of the witnesses who gave evidence to the Bill Committee describing the United Kingdom as becoming one of the go-to places of choice for international fraudsters. That is not a badge that any of us should bear with honour. If that badge is applied to the financial services industry, and to the business community in the United Kingdom generally, it will take years—decades—to get rid of and honest businesses will suffer desperately.

The Government have to start to act now. I do not know whether the Minister is in a position to tell us today when the comprehensive review of company regulation will come forward, but I certainly hope that we will see it very soon. As DialADeal’s example makes clear, even since we started our consideration of the Bill, further scams have been inflicted on innocent people throughout these islands.

Question put and agreed to.

Bill accordingly read the Third time and passed.