DRAFT REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL REGULATIONS 2016 DRAFT LIMITED LIABILITY PARTNERSHIPS (REGISTER OF PEOPLE WITH SIGNIFICANT CONTROL) REGULATIONS 2016

Graham Allen Excerpts

Monday 22nd February 2016 General Committees

[Mr Graham Allen (Nottingham North) (Lab)]

It is a great pleasure to serve under your chairmanship, Mr Rosindell. I strongly welcome the regulations, but I do not want us to get too carried away in thinking that this is the end of the process or the answer to all our questions. It is a welcome baby step, but the problems we face are enormous. I am sure that the Minister will underline how serious a longer term effort is, particularly when it comes to transparency.

The Prime Minister referred to transparency in his 2013 remarks about the abuse of company power, and we need to stay vigilant. We are very much at the penny farthing end of legislative regulation while the enemy—if I can put it that way—is at the cutting edge of digital technology. Our attempts to run after some of the problems are forlorn and sometimes quite pathetic, so we need to continue to be as serious as we can on a number of these issues.

International co-operation is key. Perhaps I am mirroring some of the debate that is happening at this very moment about whether we should be in or out of the European Union. The question whether we should be in or out of European and, indeed, international co-operation surely unites the Committee, because we have to work together. It is absolutely pointless if one nation—even our own—regulates at a particular level and is then perhaps joined by the Dutch but by very few others; international capital and international companies can move swiftly and defeat the efforts of even the best domestic regulators.

Looking at that level is important because the regulations apply only to UK-registered companies, and companies have been known to switch their base of operations. There have been clear examples recently of companies avoiding tax by moving their base and their tax designation. We need to develop an international level of regulation, so that people cannot evade due process. In taxation that is very clear; whether it is Google or Starbucks, that level of interaction and co-operation is needed, and that is relevant to the regulations.

At the European level, we are seeing some small steps. However, perhaps there is an argument for those who are arguing to be outers today—I do not know whether we need a show of hands to see who in the Committee is an outer and who is an inner. If the European Union is yet to deliver a directive, that might give strength to the outers. It is yet to finalise its proposals, which apparently will be the fourth money laundering directive—clearly the first three were not as effective as we might have liked—and they might be launched in the near future. The Minister might know better than I do, but the directive was kicked off way back in 2013.

However, at the global level there seems to be very little progress indeed. The sub-prime crash seems many moons ago, but have we learnt the lessons of that? Is the regulation in place on a European and an international basis? Despite the devastating consequences in all our constituencies, progress has been very, very slow. I suspect that it will also be very, very slow when we discuss taxation internationally and it may well be very, very slow in terms of transparency internationally, as my hon. Friend the Member for Cardiff West said.

I understand that British bankers and British venture capitalists constantly send letters to the Minister talking about the administrative burden and how difficult it is to actually figure out who owns 25% of any given company. What absolute nonsense. I hope that she will dismiss that, as she has done in bringing forward the regulation. We should show the legislative door to the idea that, in this day and age, we might use what was called, under the previous Labour Government, a “light touch” on the regulations, because it can be a matter of such significance when we cannot find out who owns and manages companies.

In essence, I am suggesting that all companies, no matter where they are registered, should have to publish a list of people who have a significant say in the running of their businesses. It is important for transparency and taxation and so that we know—so that everyone knows—where big money is going and who controls it. International capital has an important say in, and sway over, what can happen in domestic economies—far greater than at any point in our history. I therefore hope that the Minister will listen to the comments and be able to respond that today we are not at the end of the process, but just at the beginning.