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

Kevin Brennan Excerpts

Monday 22nd February 2016 General Committees

[Kevin Brennan (Cardiff West) (Lab)]

Government Members have anticipated a couple of the questions that I had planned to ask, so for the sake of brevity I will not repeat them; I know that the Minister will want to answer them.

These measures are about improving trust in UK companies—an aim that we share across the Committee. As the Minister rightly said at the outset, they have their genesis in some of the work of the previous Government; it has attracted cross-party support. They apply a new requirement in relation to different business forms. The requirement is aimed at increasing the transparency of the ownership of companies, and it will have most impact on unlisted companies. Obviously, the measures also have a basis in the Small Business, Enterprise and Employment Act 2015—the Bill was broadly supported by both sides of the House when it was discussed last year. In general, there has been little criticism of these measures outside the House and, broadly speaking, the Opposition are content to support the Government today and not to oppose the measures should there be a Division.

There has been an indication that some groups—perhaps trustees, for example—have a lower awareness of the requirements than might be hoped. Can the Minister say something about how awareness of the requirements under these provisions will be made more widespread? Is there a plan in place to ensure that there is greater awareness of what is being proposed today?

Clearly, much of this work is the result of disquiet about anonymous owners of companies and their actions. That can operate on many levels; it ranges from concern in the Government about connections between companies and terrorist groups, for example, to people who fear for their jobs as shadowy funds try to buy their company, and to local worries about who is buying up a town’s offices and shops. Transparency around all these issues is therefore very important, which is why, broadly speaking, the Opposition are content to support what the Government are doing today.

I note that in this area the biggest opposition seems to have come from the British Bankers Association and the British Private Equity & Venture Capital Association. What is the Minister’s view of their objections that all of this might be a time-consuming process that interferes with enterprise? The British Bankers Association also has concerns about the dangers of public access to the proposed register. As I said, we intend to support the measures, but we look forward to hearing the Minister’s answers to our questions and to any questions that her hon. Friends might have.

--- Later in debate ---

[Anna Soubry]

Perhaps I may begin by answering the question from my hon. Friend the Member for Bedford. The regulations were out of scope because they were an international requirement, so the one in, two out principle did not apply to them. We had international obligations.

I am sure my hon. Friend will be interested to know that the final state impact assessment estimated the costs as a net cost to business per year of £97.5 million. Over 10 years it is £1,086.2 million, so it is not exactly small. What will please my hon. Friend, however, is that that final assessment also found that there would be a cost of £10 to small simple companies in relation to updating beneficial ownership information annually and, of course, £10 in relation to providing information to the central register annually. The good news is that for the smaller businesses the amount of money involved is very small. It has been argued, and I would argue, that it is well worth paying because of the importance of making sure that we tackle the problem.

[Kevin Brennan]

I think I heard the figure that the Minister used then, but the impact assessment documents for the two sets of regulations state that the net cost to business in relation to the PSC register would be £10.09 million per year, and that the net cost to business per year in relation to the other one would be £4.7 million per year—both on 2014 prices. I think she gave a considerably higher figure, so I wonder whether she could explain the difference.

[Anna Soubry]

I am afraid I cannot. I would be delighted if the figure that I had been given is wrong and the one that the hon. Gentleman has is correct. One thing that is for sure is that if I am wrong—if the figure I have been given is incorrect, as I hope it is—I will happily write to all members of the Committee to correct that. If the hon. Gentleman is right, that will be good news all round. Obviously, we are determined to make sure we keep the cost as low as possible. The regulations are serious and important, with the aim of tackling a genuine problem; it is sometimes a mark of their seriousness that such things cost money. However, I will sort that matter out.

[Anna Soubry]

I think the best thing I can do, although I am always happy to talk to my hon. Friend, is to write to him in more detail. We have saved a huge amount of money—around £5 billion—for businesses over the past five years through deregulation, and it is now accepted that we are one of the best places in the world to do business, specifically because we do not over-regulate in the way that we did. We have made huge strides. There is more to be done in the next five years, but we have made enormous progress, which is now being recognised. When I meet smaller businesses and, notably, the Federation of Small Businesses, they do not complain as they used to about the amount of regulation, but it is absolutely accepted that more can be done.

On the question asked by my hon. Friend the Member for Totnes, I am told that the Act introduced robust penalties to deter and sanction those who seek to misuse UK companies. Those penalties will, of course, support law enforcement tax authorities’ existing powers of investigation. The details, if I may be so bold, are in the Act, but if she would like me to point to them, I am more than happy to do so. However, as I have said from the outset, this is a serious piece of work due to the nature of the threat to the security of our nation, particularly in the business sector.

I agree with some of what the hon. Member for Nottingham North said, but it is often the case that the United Kingdom is doing all that it can, and this is a good example. Others will no doubt come and play, but we cannot force other countries to follow our example, any more than we can force companies registered in other countries to abide by our law. That has always been the case, and rightly so.

I hope that I have been able to answer right hon. and hon. Members’ questions. It is an important new regime for companies, increasing the transparency of who owns and controls UK companies. It is important to maintain the United Kingdom’s high standards of corporate trust. Anti-corruption is a key priority for this Government, and our Prime Minister has taken a serious personal interest in it. I know that there is, quite rightly, cross-party support for the issue.

[Kevin Brennan]

I am grateful to the Minister for giving way, which will undoubtedly save us time. Although we are content, as I said earlier, to let these regulations pass without asking for a Division, I would like to put it on record that it is important to get accurate figures on the impact assessments and the cost to business when we discuss such matters. Who knows; inspiration might come to the Minister while I am on my feet. However, if she is unable to clarify that matter now, I would welcome an early communication from her, as I am sure would other Committee members, about the correct figure. We are content to let the regulations go through on trust because we think that they are good measures, but nevertheless, it is important when we debate such things that the Minister has the correct information before her—it is not her fault—so that the Committee can discuss them with the full information before it.

[Anna Soubry]

I apologise for being unable to give the definitive figure. I can tell the Committee only what I have been given, and it is not the same as the figure that the hon. Gentleman has. However, there is some indication that he might be right and that, for reasons that I do not understand, the figure that I have been given is not. Either way, we will sort out the matter, and I apologise. One would think from the abundance of papers and officials that I have that somebody might be able to give a definitive answer.

Notwithstanding that, these are important regulations and I am pleased that they have cross-party support. I commend both statutory instruments to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Register of People with Significant Control Regulations 2016.

Draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016

Resolved,

That the Committee has considered the draft Limited Liability Partnerships (Register of People with Significant Control) Regulations 2016.—(Anna Soubry.)