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New Clause 16 — Names and addresses of members of companies: company application

Part of Orders of the Day – in the House of Commons at 3:45 pm on 18th October 2006.

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Photo of Paul Farrelly Paul Farrelly Labour, Newcastle-under-Lyme 3:45 pm, 18th October 2006

I shall speak briefly against new clauses 16 and 17 and amendment No. 383. We spent six or seven weeks in Committee discussing the matter at great length, so I shall not repeat all the arguments against. Essentially, they have to do with regulation, law enforcement and the shareholder protection regime in the UK. However, I shall have to repeat some of the arguments, as the Conservatives clearly have not listened. I shall pay a compliment to David Howarth. The Liberal Democrats tabled similar amendments in Committee and it is to their credit that they have not advanced them again on the Floor of the House.

As I said in my intervention, I understand the constituency interest of Mr. Djanogly, arising from the position of Huntingdon Life Sciences, but with respect to animal rights terrorists, by advancing those new clauses, he is using a sledgehammer to crack a few nuts.

We had a similar situation at a guinea pig farm in Staffordshire, where the animal rights terrorists went as far as exhuming a body and kidnapping the bones, and they also occur elsewhere in the country. But the police have not been beating a path to my door saying that a clause such as this is essential to help them to prosecute the perpetrators. More fundamentally and importantly, investors, the Association of British Insurers, the British pension funds, City banks and the stock exchange are also not clamouring for clauses such as this in the Companies Act because they are aware of the wider consequences for shareholder protection and company regulation.

The reason for that is that new clauses 16 and 17 are drawn extremely widely. Amendment No. 383 institutes an absolute right to shareholder secrecy, and I note the comments of the hon. Member for Huntingdon on my intervention that he will not put that to a vote later. Like him, I do not take that amendment very seriously, but even the new clauses are drawn extremely widely. The test is that the company has to show that its members or their families run the risk of being subject to violence and intimidation.

In Committee, I gave an example from my days as an investigative journalist when I pursued a bank director in Russia whom I considered to be a dodgy stockbroker. He was pursuing various deals in Moscow, which in those days during liberalisation was the equivalent of the wild east. Because he had a grudge against a number of other people whom he came up against in negotiations, he let it be known that one particular director of a Dutch bank was the blocking point to a big deal with Gazprom. The Dutch bank director's house in Moscow was subsequently set on fire when his family was in it.

In such circumstances, a major bank might come to the Secretary of State and say that it operates in Russia or in a lawless country and that there is a severe danger that if the identities and addresses of not only their employees but their shareholders are disclosed, they may be subject to the risk of violence and intimidation. The companies that are most difficult to regulate and enforce laws against, and funnily enough that are most regularly involved in fraud, are the very same companies that operate offshore. They are usually small companies, operating in dangerous environments. To institute a right on their behalf of secrecy of membership would make regulation and shareholder protection much more difficult.