Today the Prime Minister announced the very welcome news that the UK will have an open public register of beneficial ownership – something Liberal Democrats have long campaigned for. By making business more transparent, so that anyone can find out who really owns and controls a company, we strengthen the image of the UK as a clean and trusted place to do business.
As it stands UK companies currently have a register which lists who directly holds their shares but you can’t always tell who the ultimate beneficial owner is. With no duty for companies to hold this information individuals can hide their interest in a company and facilitate criminal activities ranging from money laundering to tax evasion. This in turn makes it difficult for tax authorities and law enforcement agencies to uncover wrongdoing.
Of course we’re only talking about a minority of companies but they still pose a risk to the UK’s international reputation as a reliable place to do business. Good business practice isn’t just about how cheap and easy it is to set up a company, it’s also about trust.
Non-Governmental-Organisations like Global Witness and Christian Aid made a convincing case as to why the register should be open to the public. We listened to them. When we implement this measure the UK will be a global leader in terms of corporate transparency and accountability.
Liberal Democrats are the party of transparency. Last year Vince promised to tackle those criminals who abuse UK rules governing company directors and today we’ve delivered. Greater transparency of company ownership and control will help expose bad practice and make it harder for criminals to operate. With this announcement we’ve taken concrete steps to increase the confidence of consumers, who will know who benefits from the money they spend, and increase the UK’s reputation as a clean and trusted place to do business.
* Jo Swinson is Liberal Democrat MP for East Dunbartonshire, and was a Minister in the Department for Business, Innovation and Skills and Equalities Minister from 2012-15.
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7 Comments
While this sounds comforting, a quick at the detail indicates that this is just another misguided box ticking exercise that will make very little real difference.
Firstly, the threshold for declaration of beneficial shareholder registration is 25%. Secondly the liability on failing to comply seems to be on the company, not the shareholder.
So a person (a UK national say) can build up a shareholding of up to 25% in a company using all the available tools to mask that holding, with no liability being incurred. However, if they increase that shareholding over the threshold, suddenly the company is supposed to know all about it, even though the person has masked their holding from both the company and the authorities using totally legal devices …
So a dodgy shell company will still have owners who have effective control of the company, but according to the list of shareholders, none will own more than 25%…
I’m must agree with Roland here; this legislation is as limp as last week’s lettuce and by design I’m sure.
Limited liability – in itself an excellent idea – has, in recent decades, combined with tax havens (better called ‘secrecy jurisdictions’) to morph into a mechanism to hide from the law and the taxman. While this is obviously immensely useful to those with dirty money to conceal and invest it serve NO public purpose whatsoever; useful legislation would provide real teeth and be backed by the resources to prosecute wrongdoers and confiscate their ill-gotten gains. I suspect the sums involved are quite large enough to plug the deficit.
That no such intention exists in this government is obvious from the fact that a leading bank can admit to laundering hundreds of billions (yes, billions) of dollars for drug cartels and pay only a modest fine with no-one going to jail. Where do you suppose all that money has gone? Do leading Lib Dems not understand that putting lipstick on a few pigs is no answer and that as criminal money flows in so any hope of social justice flow out? Some (not all ) Conservatives have very dirty hands and should be called out on it.
The majority of money launderers may vote Tory but the majority of Tories are not money launderers. If the legislation doesn’t dent the problem, it’s not deliberate. The bill is good by both international and historical comparisons. I hope there is provision in it for the 25% limit to be reduced without new primary legislation.
Responsible capitalism must entail “the visible hand of self interest” in a transparent and open market economy.
@ Peter Davies – “If the legislation doesn’t dent the problem, it’s not deliberate. “
If not deliberate, then what? Naivety? Incompetence? If it were a one off I might believe it was incompetence but this fits a pattern of fig-leaf legislation and toothless regulation under the Coalition of even the most egregious wrongdoing. I would be sympathetic if the argument was that: “we wanted to do X but the constraints of working in coalition meant we could only achieve Y”. That is how it will be on occasion but we should then be saying that we wanted X and pointing out the problems with Y. If instead we crow about achieving X we devalue the Lib Dem brand, identifying it with deceit and toadying for some very shady people.
I firmly believe that there are lots of decent people in the Conservative camp who, if Liberals gave the lead, would put Cameron under such pressure that he would have to yield. But no, we seem content to accept a position of a junior partner who is content merely to have been invited to dine at the top table.
@GF
Yes absolutely; and even where a controllng interest is known and uses its power to threaten to undermine or to blackmail whole swathes of an econony in order to impose its will on society, there is still no apparent remedy against potential economic sabotage..
“Limited Liability” share capitalism needs rethinking and re-regulating. It emphasises distributed as against reinvested undistributed profits, offers no check on big companies hoarding investment-funds in idle bank accounts (currently amounting to about half UK GDP I think), and offers no protection to small limited companies seeking reduced-liability funding for expansion, because lenders habitually deny the protection supposedly granted by limited liability by demanding “collateral” such as homes, property and savings for any advances granted.
@ Robertt Wooton
Transparency? Well then, shine a light on Clegg’s abject failure. Mr Clegg pledged then that “when the public finances become clearer”, the Government “stands ready to do everything we can” to support Sheffield Forgemasters.
Within weeks as Lib Dem leader he launched the £2.4bn RGF scheme, specifically to support private-sector firms outside the South East. The £36m loan to Forgemasters was announced the following year, to allow the firm to invest in new manufacturing equipment.
But two years later, the money has still not materialised, and they are withdrawing from the so-called scheme. Meanwhile only 54% of the work on the new French built nuclear UK power station is ear-marked for British firms.
When it comes to dealing with the handful of big monopolostic companies that dominate global activity, Clegg has formed the Coalition of Nodding Heads, even in his own costitutency. It is not that he does not know who owns and who dodges tax, just that this government will never do anything about it; while accountancy firms switch to designating themselves as “advisors” in orderto avoid strict accouting regulations that would otherwise perhaps lead to further prosecutions for fraud. In such a context “transparency” is meaningless as a protection, and “profit” is designated only on the bookkeeper’s desk in whatever amount and location is most convenient.