Small Business, Enterprise and Employment Bill

Lord Popat Excerpts

Monday 19th January 2015 Grand Committee

Moved by

[Lord Popat]

38: Schedule 3, page 159, line 29, leave out “the specified conditions in”

[Lord Popat (Con)]

My Lords, the amendments in this group are minor and technical ones to the measures in the Bill concerning director disqualification and the register of people with significant control, or the PSC register.

Amendments 61 and 102 would ensure that there was reciprocal recognition of certain bankruptcy restrictions between Great Britain and Northern Ireland. The amendments provide consistency to put it beyond doubt that a person made bankrupt by a court in Northern Ireland will be committing an offence if they act as a director of a company in Great Britain.

Amendments 38, 40 and 42 in respect of the PSC register will ensure that we have sufficient flexibility to amend the regulations setting out the nature of a person’s control over a company. They will allow us to describe the nature of control by reference to any interest held in the company and not just to the specified conditions.

Amendment 50 amends paragraph 26(2) of new Schedule 1A to ensure that, if changes are made by way of regulations to Part 1 of Schedule 1A, consequential changes can also be made to Part 2. This will ensure that the legislation, if amended, can remain coherent and consistent. I hope that noble Lords will support these amendments. I beg to move.

Amendment 38 agreed.

--- Later in debate ---

[Lord Deben (Con)]

I declare the same kind of interest as my noble friend who last spoke. There is sometimes confusion in Government about regulation. Many regulations are extremely good and opposition to regulation as a kind of mantra is peculiarly boring. Unfortunately, we have just gone through a Bill in which some of the bits of deregulation were of no importance whatever, yet we still have bits of regulation like this, which could make a difference and could easily be improved. The sort of regulation that people most dislike is when they have to do the same thing at least twice. This is one example of that. My noble friend is to be congratulated on raising it on this occasion. I hope that my noble friend the Minister will be prepared to go a little further than he suggested that she might, because this is what annoys people. I know it does not matter very much, but it is one of a whole lot of things that annoys people that add up to something that does matter. If we could just get rid of this, it would also suggest that the Government and authorities were competent, whereas this glacial movement possibly suggests the opposite.

[Lord Popat]

My Lords, I welcome the input of my noble friends Lord Cope, Lord Deben and Lord Hodgson, on this deregulation issue. Clause 89 replaces the current annual return for companies with a new requirement for companies to confirm that the information held on the register of companies is up to date. Companies will no longer have to restate information if there has been no change. They will have more flexibility about when they confirm that their company information is up to date.

Charitable companies are currently required to file a separate annual return with the Charity Commission. Clause 89 does not change that position. The information required by the Charity Commission in its role as a charity regulator is not the same as that required by the Registrar of Companies. Therefore, the information required in the two returns differs. For example, a charity’s annual return to the Charity Commission contains financial information taken from the charity’s accounts and narrative information on the charity’s aims and activities. Charities with an income of more than £25,000 also need to enclose copies of their accounts with the annual return. That is not to say, of course, that nothing can be done to reduce the reporting burden on charities.

In December 2012, the Charity Commission began registering charities under a new legal form—the charitable incorporated organisation, or CIO. The aim of the CIO structure is to give charities the advantages of incorporation without all the administrative burdens associated with being a company. For example, CIOs do not need to register with Companies House but need send only an annual return to the Charity Commission. In 2013-14, the Charity Commission registered 1,331 CIOs. We expect the number of charities choosing this structure to increase in future. As the Government said in our response to the noble Lord’s review of the Charities Act, the Charity Commission has accepted his recommendation that we should continue work on creating a single reporting system for charitable companies.