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Companies Bill [Lords]

The principles of amendments Nos. 761 and 762, which are in my name and those of my hon. Friends, are fairly clear. Up until now, we have been dealing with the duties of directors and companies. The problem is how we take account of those duties and how directors and companies can be made accountable. The purpose of our amendments is to strengthen accountability. Clause 155 is an improvement in the sense that now at least one of the directors has to be a real person. We want to take that a little further. Amendment No. 761 therefore provides that that one person shall be domiciled in the UK. That is an important principle to maintain. Amendment No. 762 strikes out the ability of corporate entities to be directors—something that is wrong in principle, confuses accountability and makes enforcement of any kind difficult. We need those two amendments because somebody needs to be accountable for what companies are doing. They need to be accountable under UK law and not living in a country that is perhaps a tax haven, or which has no extradition agreement or arrangements, and where UK law cannot be enforced. I am thinking, for instance, of countries such as that chosen by Asil Nadir—that was the nadir of enforcement—when Polly Peck collapsed. He fled to northern Cyprus and, strangely, for some reason he has refused to come back to this country and face the rigours of the law. We do not want that situation to be sustained. We need companies to be accountable. I am sure that the Opposition will support that principle in the sense that, in refusing to accept companies as directors of other companies and depriving them of that power, we are, in effect, reducing the red tape on companies. The principle is straightforward. There is a huge problem attendant on the ability of companies to escape accountability. It is because of that kind of escape from accountability that we have such problems with tax avoidance—problems involving companies and directors stationing themselves in tax havens. I am thinking of companies such as Mapley Steps, which has close relations with the Government. I am following every one of the 39 Mapley Steps adventures in Private Eye. How do we enforce accountability on a company such as that, in a tax haven? How do we ensure that companies in tax havens fulfil their social responsibilities, pay their rent to society, and are responsible for the damage inflicted by the corporation under the law that we passed earlier? How do we ensure that they fulfil their responsibilities in relation to profits derived here? There is also the matter of criminal negligence. These two simple, straightforward amendments confront a simple issue. The Government want companies to be accountable and they want to deal with tax avoidance, tax havens and all the other issues involved in companies escaping their obligations in this country. I note that the United States Government Accountability Office, in a report on minimal ownership information, which came out earlier this year, said that the United States Government found it almost impossible to pursue many companies for criminal activity—not just for tax avoidance—because they could not trace the individual directors, who were often living in tax havens. I want to enforce the principle in the UK and make it possible for us to deal with all kinds of infringements from money laundering, financing of terrorism and tax avoidance to criminals operating through a shelf company. How will we deal with any of that unless we agree to the amendments? Our simple provision is that a real person—the one real person—should live in this country and that only real persons can be directors of a company. I hope that my right hon. Friend the Minister, with her usual acuity, will leap to accept it and say, ““Yes boys, you’re right. Right on! We’re behind you.””