Sanctions and Anti-Money Laundering Bill [Lords]

Bob Stewart Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 1st May 2018 Commons Chamber

[Alison Thewliss]

My hon. Friend is absolutely correct. Registering with Companies House seems to be the easiest thing possible. It is baffling that anything else, such as a tax return, a passport application or a driving licence application, needs to go through the gov.uk verify scheme, but Companies House does not have that requirement. Just tightening up those rules would help hugely both to ensure the accuracy of the information and to clamp down on those who wish to abuse the system. It is in all our interests to make sure the system is accurate, but it is not accurate.

Worse, there are only about 20 people at Companies House policing some 4 million firms’ compliance with company law. There are no proactive checks on the accuracy of the information submitted, which, as the hon. Member for Oxford East has just said, allows a significant amount of false and misleading data to be submitted to the companies register.

[Bob Stewart (Beckenham) (Con)]

The hon. Lady says there are no proactive checks at Companies House, but if an outside person challenges an entry, surely the people at Companies House have to check it out. It is a criminal offence if an entry is wrong, is it not?

[Alison Thewliss]

The difficulty in all this is with enforcement. As the hon. Member for Oxford East pointed out, it has been very difficult to get anything to happen in the case of “the chicken thief”. The only person to be prosecuted so far is a whistleblower, which does not lead me to believe much will be done to those who abuse the system. The volume of data at Companies House makes such abuse very difficult to tackle. Indeed, investigative journalist Richard Smith has flagged up such things and has found it difficult to get any action. If a person submits the wrong name and address on their form, either deliberately or accidentally, how is the agency supposed to track down that person to get them to correct the information?

Not making the system accurate allows hon. Members to stand up in this place and say that transparency of registers does not work, but we know it does work if it is done properly and if we invest in it properly. We need to be careful to make sure that our own integrity is right, because if we are leading on transparency and beneficial registers across the world, we need to make sure that what we are doing here—the intention around Companies House—is what is carried out in practice. Companies House needs more resource to allow that to happen.

--- Later in debate ---

In the Minister’s letter to me, he also said that current sanctions are as temporary measures, not as long-term measures. Well, the Customs and Excise Management Act 1979, from which this Bill derives many of its enforcement powers, allows for the destruction and resale of goods. These are permanent acts; we cannot un-destroy a good. New clause 18 would allow for a seven-year appeal for any company that were shut down, compensation if a company were shut down incorrectly and the reversal of a temporary measure if the wrong decision were made.

[Bob Stewart]

I am intrigued by this. Fundamentally, the hon. Gentleman is saying that there is a brass plate and a registration with Companies House, but there is actually nothing between that and a company working abroad. Is he saying that there is no connection and absolutely no way that these people can be traced, or have I got it wrong?

[Lloyd Russell-Moyle]

This is not about tracing. These companies use British registration but undertake activities through a set of subsidiary companies or other companies that they are linked to abroad to take part in the nefarious activity. The individuals might be directors of both companies, for example.

The current threshold of requirement to disbar individuals or strike off a company is at the criminal level of responsibility, but that level is just far too high. If it were brought down to the civil level of responsibility, the Minister would be able to take action. Now, the Minister may feel that he would not want to take action and I am not compelling him to do so. I am simply giving him the powers, if need be, that already exist in the Insolvency Act 1986. This is not about extending powers that have never been used before.

The Government say that there is no information about these companies at all. Well, let us look at S-Profit Ltd, a UK-registered company that brokered arms to the South Sudanese Government. This Government have received copies of the contracts involved. The Ukrainian directors of the company have even admitted that the contracts were genuine, as did the Ukrainian state company responsible for brokering the weapons. It is not enough for a criminal action, but it is clearly enough for a Minister to invoke the public test—that is, to ask whether the company is acting against the public interest and breaching sanctions. Such companies should be struck off, so that they cannot use the brand Britain as a front for their activities.

When Sir John Stanley was in this place, he recommended the same powers in the Committees on Arms Export Controls. I am not trying to bring in something that is hugely controversial. The Government have already said today, in general, that they would like to take action on these things. I was really disappointed that we were not able to get the Government to support this. I tried to meet the Government a number of times, even coming up in recess time to do so, with the meeting being cancelled 20 minutes before it was due. It is a real shame, and I would like the Government to give way. However, I will not press the amendment to a vote on this occasion if they make a commitment to look at this further and to take it on, as I think they have done today. I hope we can work together on this.