Small Business, Enterprise and Employment Bill

Debate between Matt Hancock and Jonathan Djanogly

Wednesday 19th November 2014 Commons Chamber

[Mr Djanogly]

That may be the case, but it has not been said in public.

There is a hint in the impact assessment that, amazingly, provides only two alternatives—do nothing and rely on voluntary campaigns, or jump all the way to the Bill provisions and propose company registers, with companies reporting annually to Companies House. But why does the impact assessment not review more focused registration regimes? That will now need to be addressed in the other place.

This is not an academic issue. In particular, there seems to have been a wholesale disregard for the material impact that these provisions will have on privacy. People can buy assets privately unless the asset is public, such as a listed stock. They may not want other people to know what they own; they may have cultural, security or even religious-based concerns about people knowing that they own part of a company. What evidence do the Government offer in the impact assessment to justify destroying this right of privacy? Very little.

As for the increase in the regulatory burden, the impact assessment talks of implementation costs on companies and ongoing costs. It also says that the costs to people who need to register their interests cannot be ascertained, and those are the same people who may have to take expensive advice.

Investment in British companies is also threatened. The impact assessment methodology is again flawed, because it looks at the quantity of companies affected, not the quality. In other words, one lost huge Chinese investor deciding not to use or invest in an English company could be very damaging to UK plc, even if a thousand single-owner tiny companies say that this measure will not impact upon them. Again, the impact assessment does not support the Government’s contention that they remain convinced that this reform will be good for business and the UK business environment. What the IA actually says is:

“There is a risk that we have not accurately accounted for this potential impact on overseas investment in the UK and UK competitiveness . . . particularly since the UK will likely be a ‘first mover.’”

One has to ask why we should be the first mover, with associated risks as we claw ourselves away from recession.

And here’s the rub: foreign companies will not have to keep this register, which means that British people who legitimately wish to retain their privacy will be forced not to use English companies, but to use, say, Irish or British Virgin Islands ones instead. As always, it will be the relatively small, unsophisticated businessman who bears the weight of regulation aimed at catching drug smugglers, which I suggest these proposals will fail to do anyway.

Looking at this Bill as it goes to the other place, I would consider abolishing the need for companies to file annual returns of their PSCs—that is, returns that will be outdated within five minutes of being filed. Accepting that the company PSC register is instigated to comply with the G8 and G20 requirements, if the company does not wish to release the PSC register voluntarily, the applicant should have to ask the court for access. I suggest that the proper purpose grounds for access should be restricted to national security, personal safety issues and tax investigations.

In this way Government crime and tax agencies would be able to make their inquiries, but the registers would still protect privacy for those companies that wished to respect this right. At the same time, the unjustified costs and regulation of keeping the central register would be abolished and foreign investors would not be put off investing in the UK. Finally, investors, especially British investors, would be saved the irrationality of having to trade through UK branches of foreign companies in order to retain their privacy rights. There is time for the other place to review these provisions, and I hope it does so.

[Matthew Hancock]

Given that there will be no winding-up speeches in this debate, I would like to say for the record that many of the points that my hon. Friend has made, and made eloquently, will be considered in the consultation and, no doubt, in the other place. The key is to deliver on the agreements we have made internationally, and to do so in a business-friendly way. There are reassurances we can give on some of those points, and I know that he is meeting the Minister responsible in due course. I hope that gives him some satisfaction.

[Mr Djanogly]

I am very pleased indeed to hear that confirmation from the Minister. I look forward to having further meetings and seeing progress, because I can assure the House that there is a lot of concern about these provisions out there in the country, and it needs to be listened to.

Oral Answers to Questions

Debate between Matt Hancock and Jonathan Djanogly

Monday 10th February 2014 Commons Chamber

[Matthew Hancock]

The resource spending that supports sixth-formers is exactly the same per student in free schools, sixth-form colleges and school sixth forms. We have a national funding formula. Before this Government came to office, we did not have a national funding formula; we had different funding for different pupils. We think it is fairer to have the same funding per pupil for all students, and that is what we are doing.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

The funding differential is being accentuated by very significant differences in funding grant around the country, negatively affecting the f40 authorities generally and the Cambridgeshire authority more than any other. How is my hon. Friend planning to put this right?

[Matthew Hancock]

That is exactly the sort of anomaly that we have put right by making sure that resource funding is exactly the same per student for 16 to 18-year-olds, no matter what type of institution or where in the country.

Gender Balance on Corporate Boards

Debate between Matt Hancock and Jonathan Djanogly

Monday 7th January 2013 Commons Chamber

[Matthew Hancock]

So would I. The right hon. Gentleman makes an important point that is not in today’s document. The importance of diversity on boards is not just about sex, race or background. It is that good boards bring a range of experience, a range of different people, together. Good boards tend to have members with different points of view and with all sorts of different characteristics. All the hard research shows that that is what promotes a good board both for economic and business purposes and for social reasons, as the right hon. Gentleman highlights.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

I recognise this as an important issue and I recognise also that the number of women on boards has increased, which is welcome. Is not the question: why is the European Union dealing with this? Is this not a matter for the Financial Reporting Council, the UK Listing Authority and the Department? Why are we discussing it in the context of the European Union?

[Matthew Hancock]

We are discussing it because the EU has put forward a proposal. Whether we think it is right that it should do so is exactly what we are debating. I have an awful lot of sympathy with what my hon. Friend says. In fact, I think I agree with all of it, although I am always cautious about saying that I agree with all of anything in case I missed something or misunderstood.

--- Later in debate ---

[Matthew Hancock]

For the purposes of today’s debate, the Government are arguing that this does not pass the EU’s subsidiarity test. For those purposes, the Government’s position is clear: we think that the voluntary approach is best. Before becoming a Minister, I wrote a book in which I stated that that needs to happen and that we should hold open the possibility of having legislation, but the Government’s position is clear: we should approach this on a voluntary basis.

[Mr Djanogly]

I thank the Minister for being so generous in giving way. I wholly support what he has said and the Government’s position. However, he might wish to look at the Financial Reporting Council’s most recent annual report, which basically says, “Over to you, Europe. We’ll see what you have to say and then we’ll deal with it.” I think that the FRC needs to be told that it must look at this, because it is an important issue and we want to deal with it.

[Matthew Hancock]

It might be that this debate and the decision of Parliament that will follow will be brought to the FRC’s attention. I wonder who might do that.

Of course, we share the Commission’s view that fair opportunities for women in executive and non-executive posts should be promoted and we are happy for the EU to disseminate good practice across member states, but it is up to member states to find their own national approaches. Many member states are considering, or have implemented, various and differing national measures on a voluntary basis to facilitate raising the proportion of women on boards. Some have decided on domestic legislation and some, like us, think that we can get there without it. That multitude of approaches is likely to help us find which one works best and has the most benefits and the fewest unintended consequences. The reasoned opinion is intended to set out the views of Parliament separately from the views of the Government, so I am very much looking forward to contributions on that front from Members in all parts of the House.

Let me turn to a couple of the specific questions from the European Scrutiny Committee. The Committee asked for the Government’s view of the Commission’s projection that only 17% of UK listed companies would have 40% women directors by 2020. It is safe to say that the Commission’s projections are rather out of date, because we already have 17% women directors in the FTSE 100. The Commission’s analysis is based on extrapolating the increase in the number of women on boards in the period 2003 to 2011 and using a linear progression, but, as we have already discussed, the rate of change increased markedly at the back end of the last decade, and we will be within a whisker of reaching the target that the Commission has set by 2020.

The Committee asked whether the Government consider that the measures proposed by the EU would be counter-productive. It is true that legislation can have unintended consequences, and if an objective can be reached without legislation it is usually better to do so.

Finally, the Committee asked about the outcome of the Government’s consultations on the proposed directive and the progress on negotiations. We are discussing the proposals broadly, but negotiations in Brussels have yet to start.

Oral Answers to Questions

Debate between Matt Hancock and Jonathan Djanogly

Tuesday 19th October 2010 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

T6. Many millions of pounds are spent on court cases involving divorcing couples. Yesterday David Norgrove was quoted as saying that the Department was looking to a Swedish model to help to resolve divorce cases— Name her! What changes does the Secretary of State propose to make, and how much would—[Interruption.] Order. I want to hear the rest of the question. It is becoming more fascinating by the word. What does the Secretary of State intend to learn from the Swedish model, and how much money would be saved?

[Mr Djanogly]

We have some good English models too. Family mediation can be quicker, cheaper and less stressful, and provide better outcomes, than contested court proceedings. We know that informing people about mediation helps them to understand how it can enable them to avoid long-drawn-out cases. I am pleased to report that the issue forms part of the Norgrove review, which we will follow with great interest.