Harriett Baldwin backs an amendment to the Economic Crime and Corporate Transparency Bill that would introduce a £100 fee for the incorporation of a new company to fund the resources needed to reform Companies House to improve transparency over UK companies and combat economic crime.
I rise to speak to new clause 20 and the amendments tabled in the name of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom). I very much welcome the progress that has been made in today’s legislation and the fact that this Minister is the person responsible for taking it through, given that he used to be one of my colleagues on the Treasury Committee and is a signatory to the report on economic crime that we put out last year.
It is clear from the work that we have all done on economic crime how important the reform of Companies House is to achieving this. We have all heard horror stories of people who have stolen other people’s identities and successfully set up businesses at Companies House, and of people who have shut down one business then immediately started up another one with a different name. Clearly the reform of Companies House, as taken forward by this important piece of legislation, will make economic crime much more difficult in the United Kingdom, which is something that everyone should welcome. In the report on economic crime that the Treasury Committee put out last year, we called for resources to be put into this important work. Clearly it cannot be done without those resources, and it will be interesting to hear from the Minister today about his discussions with Companies House and his estimate of the resources required.
New clause 20 proposes a fee for new businesses of £100 rising with inflation, which would give Companies House more resources to undertake this important work and, importantly, keep its budget increasing along with inflation. I acknowledge that we do not want to set a fee at a level that could act as a deterrent to anyone starting up a small business, but the work that we did last year in the Committee suggested that the current levels of fees, benchmarked against international comparators, were very low. It was clear that we needed more resources to enable us to understand the identity of those who are establishing businesses in this country, so we pulled a number out of thin air.
I acknowledge that the figure of £100 was pulled out of thin air, although I think we probably also got evidence recommending it, but I think it is a reasonable and plausible amount at which to start these discussions. I know that the Minister is as keen as those of us who have signed this amendment to see a fee established that will ensure that the regime at Companies House has sufficient resources to manage the budget. We know that software upgrades cost money and, as we all experience rising economic crime in this country, it is important that we do everything we can to ensure that Companies House has the resources to undertake this important work.
My hon. Friend is making some valid points, as I would expect from the Chair of the Treasury Committee.
The Treasury Committee’s report does not say that we should adopt a fee of £100, but that
“A fee of £100 would not deter genuine entrepreneurs”.
I agree, but, as my hon. Friend says, the figure has been pulled out of thin air. It depends on what principle we follow, and the Government’s position is that Companies House needs to set out exactly what resources it needs to be able to perform its obligation to implement the objectives, from which we can decide how much money we need to raise. We will then look at the fees charged by Companies House. Members on both sides of the House have mentioned the incorporation fee, but an annual fee might raise more money. More work is needed with Companies House to consider this in the round before we come to a settled position. I would therefore rather not specify £100 in the Bill, for all those reasons.
I think I heard the Minister acknowledge that Companies House needs more resources, and that those resources should be raised not through a one-off fee when setting up a business but through ongoing registration fees. I also think I heard him say that he rather likes our proposal to increase the fees every year to reflect inflation. I think he substantially agrees with the thesis of new clause 20, so this is a great opportunity for him to endorse it so that Companies House is able to start budgeting right away.
I heard the Minister make the valid point that he wants to ensure the budget is worked from the bottom up, and that an arbitrary number should not be put into legislation. I have sympathy for his point of view, but I want him to understand the urgency of the matter. I want him to appreciate that we have waited long enough for this Bill, and that the Treasury Committee will therefore not allow this measure to be kicked into the long grass. We will continue to scrutinise progress, and we expect that progress to be urgent and rapid.
At this point in the cycle, I cannot believe there is not a resource budget. Even within the constraints of the Bill, there should be a budget because the negotiations will be starting. It would be interesting if the Minister could reveal that figure.
My second point, with which the Minister might agree, is that we so under-resource the enforcement of existing anti-money laundering regulations in this country that, even if this figure of £100, which the Treasury Committee and other Committee came up with, proved too much, which I doubt, setting up an economic crime fighting fund would mean that other enforcement agencies, such as the National Crime Agency and the Serious Fraud Office, could use those resources to provide better defences against economic crime.
The right hon. Lady makes some excellent points. Once the Minister does this work, it may well turn out that £100 is a good starting point. Other things are budgeted for, and I understand the budget for the work that is under way is £20 million for the financial year just ended. A further £63 million is expected to be needed up to 2024-25 and was allocated in the last spending review.
Forgive me if I am cynical about the budgets for public sector computer procurement projects, as they sometimes come in somewhat over budget. I urge the Minister in his response to new clause 20 to make sure that he can move swiftly to change the amount that it costs to set up a business, while making sure that it remains competitive in terms of economic parameters.
It is not every day that Back Benchers say to Ministers, “Here’s some more money for you. We think this is going make the UK much safer and a centre that is less vulnerable to economic crime.” That is the purpose behind our support for this new clause.
Is the point not also that if we raise the fees, rather than their falling to the general taxpayer, those who use the service would actually be paying?
That is my point—my hon. Friend has made it much better than I was. This is an offer to the Minister for a significant increase in the budget of one of the agencies for which he is responsible, Companies House, and it would be feasible without putting any further burden on the hard-pressed taxpayer. That is why I support the new clause and why I am looking forward to the Minister accepting the principle of it. I acknowledge that we may be talking about plus or minus a few quid around that £100, but that is a good starting point.