As always, I thank noble Lords for a very powerful and constructive debate around this essential legislation. I genuinely think it will make an enormous difference to the quality of Companies House activities and of our business activities, reducing crime in a magnitudinous way and making the data that companies provide far more valuable in terms of them being able to operate legitimate businesses, to borrow money and to give confidence to customers. Markets are based on trust, so the more the Government can do—and have done, I am pleased to say, with the support of all Peers in the House—the better the business operations underneath that framework.
I will briefly go through some of the significant points. If I have missed anything I will be delighted to follow up after this discussion, but I am keen to make sure that everyone is answered as broadly as possible. If I do not have specific data requested, I will write and copy in all noble Lords.
I thank my noble friend Lord Bourne for his contribution; I hope I understood his question correctly. I do not have to hand a number for the instances of PO boxes being used as registered addresses, but I would be comfortable supplying it to him. The whole point is that this legislation will end the practice of having PO boxes. I think that only about 21,000 or 22,000 addresses are classed as default; of course, that is in effect the registrar’s own address. If you think about the however
many million companies that are registered—perhaps 5 million or so—that is a very small proportion. A lot of these figures sound high—when you talk about tens of thousands, it seems an enormous number—but the reality is that, in proportion, they are relatively small. A lot of these default addresses—I am covering several points at the same time—are not for nefarious purposes. They might exist simply because, for example, an individual who had a company has died or the accountant who was registering it has gone out of business. So there are administrative reasons why default addresses are used.
Forgive me but I cannot remember whether it was the noble Lord, Lord Vaux, or another noble Lord who made the point about advertising—that because it is a default address, issues around concern and risk may be raised. I have some sympathy with that, although it is not for me to say. A default address does not necessitate that there is nefarious activity; it is often administrative. Clearly, if noble Lords go on Companies House, they will be able to see the date on which an address became the default address, which would potentially give one an indication of the situation.
It is worth talking about the chronology here. I so enjoyed the passage of the Economic Crime and Corporate Transparency Bill. The time went by so fast; it feels like only yesterday that we finished it. It became an Act towards the end of last year. As I said, I am pleased that, following a helpful conversation with the registrar, Louise Smyth, she has been extremely co-operative with my office in promoting our ambitions for Companies House. I am sure that—the noble Lord, Lord Vaux, asked a question about this—it would be extremely helpful for us all to arrange an update. I found speaking to Louise today, ahead of this debate, very helpful. It is important that we have an element of checking to see whether the resourcing is appropriate and whether the speed of activity is there, but I have the fullest of confidence in Louise and her team.
Let us look at the chronology going forward. Assuming that everything today goes to plan, these powers will come into force on 4 March. That will in effect enable the registrar to have far more discretion over how she acts.
I turn to the points made by the noble Lord, Lord Leong, about multiple registrations, how the registrar will effect her duties and the appellate process around that. It is clearly listed in the statutory instrument that you will not have to have 21,000 to the power of however many different applications, as the noble Lord, Lord Vaux, may have suggested. The point is this: currently, people may register my address as their company address. This is one of the core sparks that lit the blue touchpaper, or the rocket, that was the Economic Crime and Corporate Transparency Bill—this iniquitous situation in which any of us could be registered as a director and our address could be used as a company address. It is a completely bizarre situation that will come to an end on 4 March.
It will then be up to the registrar to make those inquiries; at the stroke of a pen, she will be able to cancel out however many thousands of companies registered to one address. How are we going to do
this? The registrar will use the intelligence hub; it is already in existence, as far as I am aware, and is being significantly resourced and expanded. I am encouraged that she will have—this is what we discussed in great detail as the Bill passed through the House—the discretionary powers to do the work and do what is clearly the right thing.
The noble Lord, Lord Leong, rightly mentioned the appeals process. It would be unreasonable to suggest that a single agent of the Crown should be able to, at their whim and discretion, change the fortunes of businesses; that is simply not the case. There is a clear appeals process and, ultimately, the courts would adjudicate. Let me be clear: it is not in the interests of Companies House or the registrar to strike companies off if they believe that they are doing legitimate business. That would be a highly unusual scenario, but there are safeguards and checks and balances around that.
I hope I have covered some of the questions asked by my noble friend Lord Bourne and the noble Lord, Lord Vaux. I will cover two other short points on the chronology. These powers will come into effect on 4 March. In May we will get the statutory instrument for the fees—I believe it is being laid in Parliament, in the other place, today—which will go to £50 for incorporation and £34 for verification at the end of every year. The increase is quite significant in percentage terms, but I think all noble Lords in the Committee will agree that, in real terms, that is not a significant amount of money for the incorporation of a company, with all that that entails. I think we have reached quite a good place there.
The all-important work on verification is the real meat of the additional hard work by the noble Lords, Lord Vaux and Lord Fox, and other noble Peers. Our friends the ACSPs hope, as do Companies House and the registrar, that by the end of this year they will have begun the process of ensuring that the verification process around ACSPs is well under way. They expect to bring in the appropriate processes for individual verification in 2025. As noble Lords know, these include photo identity card and passport verification and so on; we have done so much work on this.