Company Law Reform Bill

We fully appreciate the concern underlying Amendments Nos. 230 and 230A, but we need to be realistic.  Information that is public is not only held by Companies House. It may be held by anyone who has access to information, including companies that download the information daily. That means that the removal of information from the records held by the registrar would not and cannot protect it. It is true that, if historic information were removed from the records held by the registrar, in future, members of the public would no longer be able to obtain it from Companies House. That might be of some benefit, but not much. Those who want it for nefarious purposes would be barely inconvenienced. It is against that background that we need to consider Amendments Nos. 230 and 230A. The latter requires the registrar to,"““remove existing records of residential addresses from the public register””." The problem is that there are not, as such, records of residential addresses; rather, residential addresses are information within records. So it is not a question of removing records, which would be straightforward. Rather, it is a question of deleting text from records. That is made more difficult by the need to retain the information for enforcement agencies. That is all far from straightforward. Indeed, it is wholly impracticable for information stored on microfiche. Until 2003, microfiche was the main form of storage by Companies House for records. Consequently, excising residential addresses from records more than three years old is simply not practicable. For more recent information, it is probably practicable, but without any means of uniquely identifying a director it would mean a serious loss of useful information. It would be harder to establish whether two similarly named directors on the register were in fact the same person. Against that loss of information, as I have already explained, the benefit would be minimal as the information is public and therefore not only held by Companies House. I therefore hope that Members of the Committee will not press the amendments, although we understand the concerns that underlie them. Perhaps I should explain why Clause 220 provides for the registrar to be able to disclose a protected home address to a credit reference agency. The Government’s concern is that a lack of information about the home addresses of a company’s directors may have a negative impact on the company’s ability to obtain credit. In its response to consultation last year, the Institute of Credit Management urged that:"““This would have a particularly adverse effect on business start-ups—restricting the amount of credit available to them””." In the case of a small company, the credit-worthiness of its directors is relevant to its credit rating. Credit reference agencies need directors’ addresses to check, for example, whether there are any court orders against them. Clause 231 does not authorise the registrar to release the information to credit reference agencies in all circumstances. Rather, it provides power for the Secretary of State to specify the conditions for it to be disclosed. In a similar way, the Representation of the People Act 1983, as amended, provides power to regulate access to the full electoral roll, including details of residential addresses. The regulations under that Act provide for access by those credit reference agencies registered under Part III of the Consumer Credit Act 1974 for specified purposes. Those include vetting applications for credit; meeting obligations under the Money Laundering Regulations; and rules under the Financial Services and Markets Act 2000 about money-laundering. No decision has yet been taken about how the power under the clause would be used—or, indeed, if it would be used. There will be prior consultation. I assure the Committee that that is not intended to be a money-spinner for Companies House. Rather, as I have explained, our concern is that companies’ ability to obtain credit should not be damaged by the provisions to protect their directors’ home address. I hope, therefore, that the noble Lord, Lord Freeman, will withdraw his amendment.