I am grateful to the noble Lord, Lord Watson, and my noble friend Lord Phillips for these amendments. I thank my noble friends Lord Forsyth and Lord Naseby for reminding us of the needs of small business, many of which will of course be caught by the Bill at a substantial cost, but it will be over 10 years. It has been properly costed in an impact assessment, which has been available for some months. Of course, businesses would have to deal with any additional requirements, as my noble friend has made clear, if we were to impose them. I should equally say that the benefits of the register have the potential to be substantial, whether as a result of improved efficacy
of investigations and outcomes where companies are being used to facilitate serious criminal activity, or to businesses as a result of their operation in a more open and trusted environment. As my noble friend Lord Phillips said, this is a cause in favour of transparency and against corruption that the Prime Minister has led.
However, the group of amendments raises important questions about the information in the register of people with significant control and the integrity and accuracy of those data. I turn first to Amendments 36, 37 and 38, which would require details of every company in the ownership chain to be entered in the PSC register. The PSC register is a ground-breaking change and the UK is leading by example. The register will contain information on the individuals who ultimately control UK companies, including how that control is held. I do not think my noble friend was in the House earlier when I ran through some of the international efforts that have been going on and reported on the progress of the money laundering directive. However, I did not deal with the overseas territories and Crown dependencies, which were raised by my noble friend Lord Phillips. We are working closely with the overseas territories and Crown dependencies and are keeping them informed as the UK policy on corporate transparency develops. This will help to feed into their thinking. We believe that they have made significant progress on tax transparency and they have publicly committed to transparency of company ownership. Arguably, more has been achieved in the past year than over the past 10 years.
Some noble Lords and business groups feel that we have gone too far, in particular by making the register publicly available when this is not currently a global requirement. They fear that reform will impose unnecessary costs on business and have an adverse impact on UK competitiveness. These amendments seek to go further. They would require information not only on those individuals but on every legal entity in the ownership chain. The question we have to ask is whether this goes too far. Such an approach is not required by international standards, by the likely EU requirements shortly to be adopted in the fourth money laundering directive or by our G7 or G20 commitments. Nor is it something—this is significant—that the law enforcement community, including HMRC, has called for.
The amendments would add to the already substantial compliance costs. Companies must update their own registers as changes occur. Companies keeping their own registers would have even more information to obtain and keep up to date, plus the compliance cost of notifying every change in every layer of a chain. Companies owning other companies would have to work out if and when they need to report information. These amendments could also adversely impact the utility of the register. More data do not necessarily lead to more transparency. If the amendment were adopted, the very information we want to reveal may be buried under a mass of less relevant data. What matters is who ultimately exercises control, which, subject to the will of Parliament, from next year will be on the public record and not just available to law enforcement agencies. However, I recognise that this is an issue that some noble Lords feel strongly about.
Clause 82 already requires us to undertake a statutory review of the PSC within three years of the requirements coming into force. That review will provide an opportunity to look at the range of issues raised by noble Lords on all sides of the House. I am prepared expressly to consider looking at the question of the ownership chain in the context of that review.
I now turn to Amendment 53. Let me start by making clear that I am absolutely committed to ensuring the integrity and accuracy of information on the public register. I am satisfied that our current approach achieves this. It is based on a combination of pre- and post-registration checks, criminal penalties and public scrutiny. We are looking at what more we can do and have started with the creation of a new register integrity team at Companies House. The team undertakes compliance activities to help companies, ensuring that they are fulfilling their filing responsibilities, and data analysis to identify where specific activities can improve the integrity of the register. The Government already have powers of investigation that allow them, for example, to require the production of documents. Moreover, as the register will be public, transparency will be a driver of accuracy.
Amendment 53 calls for the Secretary of State to lay an annual report before Parliament on measures taken to ensure that PSC data are verified and accurate. A clear requirement on the register to verify every piece of PSC information would not be proportionate. However, I know that this is not what my noble friends have in mind. They want assurance that our proactive approach to ensuring data accuracy will continue. The Government fully support that objective. I do not, however, think that an additional bespoke report is the way to achieve that. The Bill requires the Secretary of State to review whether the register’s objectives have been achieved within three years of its implementation. The accuracy of the information will be a key part of the review as well as all other relevant issues, such as whether additional information on the ownership chain should be recorded.
I can also commit today to ensuring that, in future, Companies House will make explicit reference to activities undertaken to ensure the integrity and accuracy of information on the register in its annual report, which is, of course, presented to Parliament every year.