My Lords, I explained at Second Reading that lack of data verification at Companies House has been a fundamental factor in enabling—indeed, encouraging—the flow of dirty money to London. Lack of data verification has played a major part in securing London’s position as the money laundering capital of the world. As I argued last week:
“Companies House is a library in which any shameful book can be deposited”—[Official Report, 9/3/22; col. 1496.]
and accepted without fear of exposure or retribution. Indeed, just earlier this afternoon, the noble Lord, Lord Callanan, described Companies House procedures as “dumb”.
This afternoon, we have been debating amendments to the Bill that will define more accurately and more widely the sort of information that will, as a result of the Bill, be required to be offered to the registrar. However, nothing we have discussed so far will guarantee that the information is accurate. If it is not accurate, it is useless or indeed worse than useless.
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We are dealing with sophisticated crooks. In the past they have been successful in subverting our financial system by providing inadequate, misleading or downright false information to Companies House, which has meekly accepted it. The crooks will try to do the same in the future, perhaps especially with respect to the information required as a result of the Bill. The only way to prevent the objectives of the Bill being undermined is to have in place the best possible system of data verification. What does that involve? It involves forensic accountants using the wide range of electronic information systems that is available today, reinforced by the National Crime Agency, backed up by agreed information gateways with fellow regulators in other jurisdictions and with foreign economic crime enforcement agencies such as
the FBI, and, of course, supported by our own security services. It is quite obvious that that sort of programme can be conducted only by an official public agency—an official public registrar.
This amendment would make it a statutory requirement for the registrar to secure the verification of the relevant information in the new register. It would place the registrar at the heart of the verification process. Noble Lords should note that this does not mean that Companies House must right away have in place the trained staff and appropriate systems, or in six months’ time. In due course, Companies House must have those capabilities, but even if in the short run it does not have the necessary technical resources, they exist within the British Isles and can be commissioned to help to do the job.
The statutory requirement would also pose the financial resources question: does Companies House have the financial resources to do the job? If it does not, then, as pointed out by the Institute for Government in its discussion of the Bill, we have all been wasting our time. Making verification a statutory requirement would place the financing question at centre stage. It just cannot be fudged. Of course, even a thorough verification system will not be infallible, but, without it, all our efforts this afternoon will have been in vain. I beg to move.