Ian
Pearson: I welcome the general support of the hon. Members
for Huntingdon and for Montgomeryshire for the statutory instruments. I
shall try to answer as many of the questions that have been asked as
possible. If I do not provide sufficient answers, I undertake to write
to members of the Committee about such matters.
In reference
to the draft Companies (Disclosure of Address) Regulations, the hon.
Member for Huntingdon asked why the exemption applied only if all the
company’s directors have the higher protection. As he will be
aware, directors are frequently directors of many companies; they might
hold appointments in a wide range of businesses, including those whose
activities are likely to attract violent objections, as well as those
that are not in the least contentious. The grounds for higher
protection might be related to the activities of some companies of
which the person might no longer be a director. So it should not simply
be the case that, because a director might be the director of one
company that might have relevant reasons to think that it might be
under threat from, for example, animal rights organisations, a
completely unconnected company could then have the higher protection
and not have to disclose the trading company’s address. That
would not be the right course of
action.
Mr.
Djanogly: Will the Minister confirm whether a director can
apply for the protection, giving as a reason the fact that his fellow
directors have need of that protection themselves?
[Interruption.] I hear a “no” over
there.
Ian
Pearson: My understanding is that directors would apply
for protection. We would normally be talking about companies that find
that people in their organisation are clearly being threatened, or take
the view that they are likely to be threatened. We all know the sort of
company we are talking about. Obviously, the Government will monitor
the situation closely, and we will monitor both these statutory
instruments and the implementation of the Act. We have undertaken to
review it and I hope that the hon. Gentleman will take comfort from
that. The
hon. Gentleman asked a number of other questions. One was about rescue
providers and how the trading disclosure regulations would apply. Such
providers would be covered if they were liquidators, administrators or
administrative receivers. He also asked why there is no provision for
credit reference agencies to pass directors’ home addresses to
their clients, such as banks. The 2006 Act provides only for disclosure
to specific public authorities and credit reference agencies. Letting
an agency pass the information to anyone else would undermine the
purpose of the legislation. However, we have made clear our view that
confirming and cross-referencing information should be allowed, and I
made that point in my opening
statement.
Mr.
Djanogly: The CRAs hear what the Government are saying and
do not disagree. They are happy with the provision, but cannot see
where in the legislation it is
stated.
Ian
Pearson: The key point is that that is the
Government’s firm position. I hope that CRAs can rely on the
fact that I have put that on record, but we would consider
strengthening the legislation if they did not find that acceptable. At
the moment I think that the guarantee that I have given should satisfy
CRAs. I know that the British Bankers Association has expressed
concerns and that the Confederation of British Industry, which
supported the original legislation, has since voiced concern about the
detail. We are more than happy to meet those organisations to discuss
how the legislation will
operate. The
hon. Gentleman discussed the higher protection provided under section
243 of the 2006 Act, which means that a director’s address will
not be disclosed to a credit reference agency. That is the way in which
confidentiality orders operate now.
Some of the
BBA’s
concerns are misplaced. The public record will
continue to show a director’s date of birth and when he or she
was appointed. I understand that banks are concerned that they might
not be able to contact someone who had given a personal guarantee on an
agreement. However, they will still be able to contact a company
director by using the service address on the public record. If that
proves ineffective, there is a provision for a court to order
disclosure of the home
address. As
I have said, if a bank needs to check whether the home address of a
director given by a company is the same as that filed with Companies
House, a credit reference agency will be able to confirm the address
using the protected information that it has. The registrar would not
consider it to be a breach of the conditions on disclosing protected
information if disclosure were made for a purpose specified in the
draft regulations, such as the prevention or detection of fraud, or to
meet obligations under the money laundering regulations.
I will check
with my officials, but I do not believe that the orders will place
barriers in the way of banks and other financial organisations that,
from time to time, need to know the personal circumstances of the
people to whom they are loaning or thinking of loaning money. I do not
believe that anything in these statutory instruments presents a
difficulty to those bodies, but I will undertake to ensure that that is
not the case. As I say, we want to monitor the legislation carefully. I
am sure that both the BBA and the CBI welcome our assurances on the
ability of credit reference agencies to confirm addresses. The hon.
Member for Montgomeryshire asked a question about credit reference
agencies or public authorities, and what would happen if they did not
look after the information properly. The emphasis is not on sanctions,
but on ensuring that the protection provided by the Act is effective.
All filed directors’ home addresses will be encrypted by
Companies House and disclosed only in encrypted form. The registrar has
the power to cease disclosing information to either a specified public
authority or to a credit reference agency, if he is not satisfied with
the protection provided. As for sanctions, the Companies Act 2006 makes
it an offence to knowingly or recklessly make a statement to the
registrar that is misleading, false or deceptive in a material
particular.
The
final point made by the hon. Member for Huntingdon was about
revocation. A director may ask at any time for his higher protection to
cease. The registrar will revoke that protection under provisions that
ensure that revocation is not rash. If a director makes such a request,
we believe that it is unlikely to be turned down, as it is unlikely
that it would be a rash request. I think that that covers the main
points raised by hon. Members. We all know that we are discussing these
draft statutory instruments because of the actions of a limited number
of extreme animal rights activists. I was pleased to read in the
newspapers recently that a number of those activists have been brought
to justice for serious criminal activities. When company directors or
employees are threatened, it is right that there is protection such as
that provided in these instruments.
We will undertake to review the legislation, to ensure that it remains
fit for purpose, and I hope that the Committee feels able to agree to
the instruments this
afternoon. Question
put and agreed
to. Resolved, That
the Committee has considered the draft Companies (Trading Disclosures)
(Amendment) Regulations
2008. Resolved, That
the Committee has considered the draft Companies (Disclosure of
Address) Regulations 2008.—(Ian
Pearson.) 3.3
pm Committee
rose.
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