Draft Economic Crime and Corporate Transparency Act 2023 (Consequential, Supplementary and Incidental Provisions) Regulations 2024 Draft Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

Rushanara Ali Excerpts

Thursday 14th March 2024 General Committees

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

It is a pleasure to serve under your chairmanship, Ms Vaz. I start by thanking the Minister for outlining the case for these regulations. I am sure those colleagues who worked long and hard on the Economic Crime and Corporate Transparency Act 2023 welcome its implementation and the ambition to stamp out economic crime.

I begin with the consequential, supplementary and incidental provisions instrument. This technical instrument will ensure that company law applies coherently by making amendments to other primary and secondary legislation and ensuring that the law operates effectively and consistently for all registrable business entities. It will help strengthen the role of Companies House. It is not forecast to have a material impact and amends various existing laws to enact the 2023 Act, effectively tidying up existing legislation. As such, we are content to support the regulations.

I turn to the financial penalty regulations, which will allow the registrar to impose fines on a person if satisfied beyond reasonable doubt that they have committed misconduct, as opposed to resorting to penalties via the criminal justice system. Thus far, the only civil penalty regime operated by Companies House is the late filing penalty regime. In that situation, a company faces an automatic penalty if it fails to submit its accounts within the designated timeframe.

This new regime will operate in conjunction with potential criminal sanctions and will allow the registrar to decide whether to pursue a pathway of financial penalty or criminal sanction. Compared with criminal prosecution, we recognise that civil financial penalties provide a less costly and time-consuming process to hold people to account and to punish wrongdoing. I am conscious that, when the 2023 Act was going through Parliament, this change in the implementation of penalties sparked some debate. However, we are content to support these regulations.

I have one question for the Minister about the support being provided to Companies House. Could he provide some assurances that it is getting the back-up and resources to make sure that it can fulfil its very important role?

I thank everyone for their time in helping to implement these regulations. I know we all want to achieve the shared goal of improving the effectiveness of the way that we tackle and punish economic crime.