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

Harriett Baldwin Excerpts

Tuesday 2nd September 2025 General Committees

[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.