Seema Malhotra
MP for Feltham and Heston · Labour (Co-op) · United Kingdom
“Public sector productivity is improving, with the latest Office for National Statistics figures showing output continuing to grow faster than inputs, and Departments being challenged to improve efficiency and modernise outdated processes.”
“I was proud to support the Feltham Convening Partnership’s young leaders summer programme last month. What struck me was their ambition for themselves and their community, as well as their call for more work experience opportunities.”
“We will be working to commence the socioeconomic duty on public bodies in section 1 of the Equality Act to require public authorities to put addressing socioeconomic disadvantage at the heart of their strategic decision making. There will be more on that to follow. Let me again thank my hon.”
“For generations, the message to those who want to enter public life or elite professions has been that if they want to get on, they must sound like everybody else. When Margaret Thatcher became leader of her party in the 1970s, she famously underwent intensive elocution lessons with a tutor from the National Theatre.”
“Whether a young person chooses a degree or a trade, their journey must be determined by merit and their potential—never by whether they have to change their voice or pretend to be someone else to fit in.”
“Interestingly, studies also regularly show that regional accents such as Welsh or Yorkshire are rated by the public as trustworthy, warm and honest. Yet when those same studies measure perceived intelligence or employability, standard southern English and received pronunciation invariably top the metrics.”
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Every one of 5,023 lines we hold for Seema Malhotra, in date order, each linked to its source. Free to read, in full, without an account. Page 39 of 101.
“I thank the Minister for his remarks. I have some brief comments to make about clauses 103 and 104 stand part. The Minister has outlined what the clauses do. Clause 103 inserts a new section into the Limited Partnerships Act 1907 that establishes on general partners of limited partnerships a duty to ensure that the firm’s registered office is at all times an appropriate address at which to receive correspondence. The clause introduces a new power for the Secretary of State to make regulations giving the registrar the power to change a limited partnership’s registered office address. The appropriate address is supposed to be within the original jurisdiction.”
“Clause 106 gives the general partners of a limited partnership a six-month transition period in which to submit their email addresses to the registrar and comply with the provisions introduced by clause 105. I think the Minister knows exactly what my concerns are about how long it can take to register an email address with the registrar. The most honest businesses and those doing the best are probably more likely to comply more quickly. Again, I make the point that it feels as though six months is an extremely long time for limited partnerships to comply with these new measures.”
“It is a pleasure to speak to clauses 105 and 106. As the Minister said, clause 105 inserts new provisions in the Limited Partnerships Act 1907. The new measures provide that all general partners must maintain an appropriate email address. The Minister has probably outlined this before, but it is helpful to consider what we mean by “appropriate”. Email addresses can be anything—for example, mylp@gmail.com —or they could be more robustly connected to an entity. Will the Minister say anything further about the definition of an appropriate email address? Is it just one that works and to which somebody responds in the end? A failure to comply would be an offence, and it is right that a general partner could face a fine.”
“On a point of clarification, the Minister just talked about limited partnerships, where a named individual is required. I know this is confusing. Would the situation be the same in relation to limited liability partnerships?”
“E.g the concept of a named officer or of a managing officer of a corporate partner (and presumably of an LLP member), compounded by the fact that a named officer’s residential address can be redacted and they need not supply a service address.” As the Minister reflects on our discussions and how we move forward, he should bear in mind the concerns raised by Professor Berry. Whatever is brought forward by the Government—however they have reconsidered it, and tested what it will do and mean in practice—does it pass the Professor Berry test, and meet the challenges that have been put to us regarding the legislation and what could otherwise slip through the net?”
“She stated that “the concept is demonstrably open to abuse, a ban” on corporate directors “was originally proposed in the interests of accountability and transparency, and a legal entity is incapable itself of carrying out the functions or duties of a director…Not only are corporate partners/LLP members a significant feature of wrongdoing…the attempts in the Bill to trace an individual somewhere behind them are so complex as to be unworkable in practice…impossible in practice for CH to check, and an obvious route for obfuscation by wrongdoers.”
“I want to read out another contribution from Professor Berry. I think it is important to keep these contributions on the record in our discussions—recognising as well some of what the Minister has said. As Professor Berry set out in her written evidence to the Committee about the issue of corporate directors, ascertaining an individual acting as a director through a body corporate is certainly more opaque than if the director is just a natural person. The situation is very confusing, but I will read out what the professor said.”
“It is a pleasure to speak to these measures. We have had quite an extensive debate, so I will make just some limited remarks on clause 107 and new clauses 57 and 58. Clause 107 is a very important clause, inserting a requirement on registration for confirmation that a limited partnership’s proposed general partners are not disqualified under the director’s disqualification regime. It also inserts, under proposed new section 8J, a new duty to take steps to remove a general partner who is disqualified. If general partners fail to do that, they will be liable to an offence. Those requirements are extremely important. I think that some of the debate is just on where some measures perhaps do not go far enough. In summary, we support the arguments made by my right hon. Friend the Member for Barking on new clauses 57 and 58.”
“We will keep our comments on this first group of amendments very brief. Broadly, we support these amendments. I would like clarification on a couple of points about amendments 22 and 37 and new clause 9.”
“Amendment 35 would mean that “any application or other document delivered to the registrar under section 8PA, 8G or 8V (changes of addresses by registrar) other than an order or direction of the court” would be unavailable for public inspection. What information will that cover? In the light of the transparency arguments being made, would any relevant information not be publicly available? As the Government have tabled a lot of amendments, it would be helpful to slightly disentangle some of their implications.”
“We broadly support the amendments. Clause 114 inserts a proposed new section into the Limited Partnerships Act 1907 that would give the registrar the power to change the service address of a relevant individual. Amendments 25 and 29 confer a regulation-making power to enable the registrar to change the registered service address or principal office address of a general partner in a limited partnership. Although we do not oppose the amendments, I would be grateful to understand why they are regulation-making powers. If there is a basis for legislating for the regulations, why are they not in the Bill? Is it just a case of creating the provisions now? It would be helpful to understand that.”
“Clause 110 Removal of option to authenticate application by signature Question proposed, That the clause stand part of the Bill.”
“Clause 108 amends the Limited Partnerships Act 1907 by inserting provisions, as outlined by the Minister, that set out that general partners that are legal entities must specify the name or names of a proposed registered officer. That will make it possible to contact an individual person in general partners that are legal entities. We have had some broad debate on the matter, but we have no objection to clause 108, which is welcome. Obviously, questions about transparency go further, but we welcome and support the clause. Clause 109 relates to the transitional provisions. We understand the need for that, but the Minister will know my views on the six months. Clause 108, as amended, ordered to stand part of the Bill. Clause 109 ordered to stand part of the Bill.”
“This clause amends the Limited Partnerships Act by removing the need for a signature when applying for registration of a limited partnership, as the Minister outlined along with the reasons for that. It aligns with new provisions set out in the Bill that impose obligations on general partners to deliver statements and other documents that do not require a signature. I will welcome assurances from the Minister that the Government have carried out some analysis of whether the removal of the option to authenticate an application by signature will have any impact on the effectiveness of the registrar in detecting or preventing economic crime. I will be grateful for that, for the background and for the possible impacts of the measure.”
“I understand what the Minister is saying about a wet signature depending on the circumstance, but a lot of documents can be signed electronically but still with a signature. I want to clarify, given the total removal of a wet signature, whether something can be signed electronically and in what circumstances. I know of a situation in which some signatures were put on documentation fraudulently, and that is now being uncovered as evidence of a fraud that took place.”
“If the Minister is unable to support this amendment or to commit to looking at this more closely and coming back to the Committee, I ask him to identify whether and where Professor Berry is wrong in her written evidence or in the concerns she raised. What assurances has he received, what questions has he asked of officials, and what advice has he taken that this defence does not merely create an unnecessary loophole through which regulations can continue to be abused? In the interests of ensuring that the legislation is as robust as possible, I urge the Minister to accept this amendment. I look forward to his response.”
“If the limited partnership does not notify Companies House of notifiable changes within 14 days of a change occurring, the limited partnership will have committed an offence. We have concerns about certain provisions in the clause, which is why we tabled the amendment. As Professor Berry, a legal professor, set out in her written evidence submitted to the Committee: “The Bill should not provide a defence if a general partner reasonably believed notice of their appointments had been given to the Registrar… General partners are personally liable for the acts of one another…and are jointly responsible for registering/filing notice of appointment. If they themselves fail to register/file, they should be required to wait to see a change on register. Reasonable belief would provide a loophole.” That is a significant point.”
“I beg to move amendment 162, in clause 111, page 95, leave out lines 22 to 24. This amendment would remove the provision for it to be a defence for a person charged with an offence under this section to prove that they reasonably believed that notice had been given under proposed section 8Q of the Limited Partnerships Act 1907. It is a pleasure to move the amendment, which I tabled with the hon. Member for Aberavon. The clause inserts new sections into the Limited Partnerships Act requiring general partners to notify the registrar of changes to a limited partnership’s partners and information about partners, and changes occurring between an application and the limited partnership’s registration. It also inserts offences for failing to notify information about partners.”
“I thank the Minister for his response. There might be a question about whether confirmation is received or one can go online and check. The Minister’s response does not seem as robust as I was expecting or hoping in relation to this as a potential loophole.”
“(4) The regulations— (a) may include provision corresponding or similar to any provision that may be included in regulations under section 1097B of the Companies Act 2006; (b) must include— (i) provision about appeals corresponding to the provision that must be included in regulations under section 1097B by virtue of subsections (7) and (8) of that section; (ii) provision corresponding to subsection (9) of that section. (5) Regulations under this section are subject to the affirmative resolution procedure.”— (Kevin Hollinrake.) This amendment confers a regulation-making power to enable the registrar to change the registered service address or principal office address of a general partner in a limited partnership. Question proposed, That the clause, as amended, stand part of the Bill.”
“(2) In this section— ‘address registered as the principal office’, in relation to a general partner, means the address for the time being shown in the register as the address of the general partner’s current principal office; ‘registered service address’, in relation to a general partner, means the address for the time being shown in the register as the general partner’s current service address. (3) The regulations may authorise or require the address to be changed on the registrar’s own motion or on an application by another person.”
“Amendment made: 29, in clause 111, page 95, line 45, at end insert— “8V Regulations about change of general partner’s addresses by registrar (1) The Secretary of State may by regulations make provision authorising or requiring the registrar to— (a) change a registered service address of a general partner in a limited partnership if satisfied that the address does not meet the requirements of section 1141(1) and (2) of the Companies Act 2006; (b) change the address registered as the principal office of a general partner in a limited partnership if satisfied that the address is not in fact their principal office.”
“I am not going to press the amendment to a vote, but I do think this is something we should come back to. If the risk is a serious one, we need to take it seriously. I will look to how we might progress this issue through the future stages of the Bill. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn.”
“Clause 117 Confirmation statements: Scottish partnerships Amendment made: 33, in clause 117, page 103, line 2, leave out from beginning to “(review” in line 17 and insert— “In regulation 37 of the Scottish Partnerships (Register of People with Significant Control) Regulations 2017 (S.I. 2017/694)”.— (Kevin Hollinrake ). See Member’s explanatory statement for Amendment 32. Clause 117, as amended, ordered to stand part of the Bill. Clause 118 Power for HMRC to obtain accounts Question proposed, That the clause stand part of the Bill.”
“We welcome the clause as a necessary provision to maintain the accuracy of the register in relation to limited partners. Amendment 32 means that new section 10E of the Limited Partnerships Act, on confirmation statements, will apply to Scottish limited partnerships. As a consequence, amendment 33 leaves out the power in clause 117 to amend existing provision about confirmation statements for Scottish limited partnerships. We support clauses 116 and 117 and the Government amendments. Amendment 32 agreed to. Clause 116, as amended, ordered to stand part of the Bill.”
“I may not have indicated clearly that I wished to speak earlier, Mr Robertson, and that may be why I was not called to speak in the clause stand part debate for clauses 111 to 115. Nevertheless, my speeches were not going to be long ones, so we will move forward. We are generally supportive of clauses 116 and 117. Clause 116 inserts new sections into the Limited Partnerships Act 1907 to assist in keeping the register up to date and places a requirement on limited partnerships to deliver statements to the registrar specifying what changes have been made to the partnerships that must be delivered to the registrar within 14 days of every review period, which is every year from the date the limited partnership was registered.”
“I thank my right hon. Friend for her remarks. The clause is extremely important for HMRC, providing clarity around accounts and accounting information and what tax should be due. It gives HMRC powers to request information and inserts a new section into the Limited Partnerships Act 1907 to create a new power for the Secretary of State to make regulations that require general partners to prepare accounts and, on request, make accounting information available to HMRC. We very much support the measure. We want enhanced powers for HMRC to help with the detection and prevention of economic crime, and indeed the paying of rightful tax through better accounting information and submission of tax returns. I support the question that my right hon. Friend the Member for Barking asked about how we can ensure that HMRC uses the powers in a useful way.”
“Our growth rate in the 12 years since 2010 has been just 1.4%, which is lower than the OECD average, and behind that of the USA, Canada and Germany. The public should have an answer to this: why does the Chancellor think that is?”
“The new statutory framework of the subsidy control regime should provide the Government with an opportunity to introduce a comprehensive strategy for subsidies and industry as a whole and for that to be part of a long-term plan for growth, yet we are still waiting. Although we support this instrument, I would welcome answers from the Minister to the questions I have raised. I urge the Government to match Labour’s ambitions for business and industry by implementing a proper industrial strategy for our country’s economy that will also help provide direction and strategy for public authorities seeking to make subsidies in line with the intentions under this legislation.”
“Finally, I note that we have no idea what the Government’s overall plan for business support and industrial strategy is. The 2019 Conservative manifesto was full of promises and ambitions, but nearly three years later what do they have to show for it? The Industrial Strategy Council has been disbanded. There has been a succession of Secretaries of State, most of whom have fallen out of favour. There is still no sign of the Government living up to their rhetoric on levelling up or any sign of the investment we need to put us on track for net zero. During the passage of the 2022 Act, Labour consistently called for the Government to state or release their strategy for subsidies.”
“The impact assessment suggests that the cost is likely to be around £15 million, largely for the subsidy advice unit at the CMA. Will the Minister clarify whether those resources have already been allocated, or whether he might expect them to be? It would be helpful to understand that. I think he will recognise the words “legislation without implementation”, and we can all agree that that is of no help to anyone. I am sure he will be helpful in clarifying that. We had some debate about tax subsidies during the Bill’s passage. Will the Minister clarify why, as far as I can tell—perhaps he can confirm this or correct me—all tax subsidies will be subsidies of interest, not subsidies of particular interest? Why has that decision been made?”
“Will the Minister provide examples of instances when the CMA might advise against a proposed subsidy or scheme being given, but it is appropriate for the Secretary of State or another public authority to act against that advice? If he cannot think of such a situation, will he reconsider whether the CMA’s advice should be binding, particularly for schemes and subsidies of particular interest? It would be helpful to understand that. It would also be helpful to be clear about how we—as taxpayers, as members of the public and as Parliament—will know if a public authority chooses to proceed with a subsidy or scheme of interest or particular interest without taking into account the CMA’s recommendations. Will that be reported on for the sake of accountability and transparency to Parliament, and will the reasons for disagreeing be published?”
“Importantly, what dialogue is ongoing with devolved Administrations about the subsidy regime? We also called for the Competition and Markets Authority to be given more power to proactively investigate subsidies and schemes of concern, addressing the accountability gap that experts have identified in the framework. This SI addresses the question of which subsidies and schemes will be, or can be, referred to the CMA to report on. However, unless the Minister wants to correct me, the recommendations of these reports will still be non-binding, whether or not they relate to schemes of interest or schemes of particular interest.”
“We raised numerous critical questions during debates on the subsidy control regime, but they have not been answered in the Minister’s speech or in the documentation. During the passage of the Bill, we called for greater powers for devolved Administrations so that they could challenge schemes that they believed might put their visitors and communities at an unfair disadvantage. Does the Minister have any further response to that? The Government’s consultation states that the Scottish and Welsh Governments have not formally responded to it, but that they will instead be providing their views directly in correspondence; I believe that Northern Ireland Ministers have been unable to respond because of the suspension of the Executive Committee. Do we have confidence that the views of the devolved Administrations have been taken into account?”
“I highlight the additional level of scrutiny provided for any intervention aimed at supporting the relocation of activities in any sector. We argued during the passage of the Subsidy Control Bill that addressing local or regional disadvantage should be explicitly recognised as an important policy objective—something that a Government who claim to be committed to levelling up opportunities and living standards across the country should have as a key focus. Again, it is essential that the provisions around relocation do not act as a barrier or have a deterrent or chilling effect on initiatives that may be undertaken—by devolved authorities, for example—to attract investment and support job creation in every part of the country.”
“Why is that important categorisation not subject to wider debate, as we called for during the passage of the Subsidy Control Bill? The consultation outlined some of the criteria, including that there might be a record of international trade disputes or evidence of global overcapacity, but I note concerns raised in the Government’s consultation that some sectors included in the category might be disadvantaged relative to their close competitors in other countries. Others have called for sectors to be added to the list, including transport, ports, airports and air carriers. It would be interesting and helpful if the Minister expanded on the Government’s reason for including certain sectors in this category and not others that were raised, and on the likely impact of being in or out of it.”
“We support the introduction of thresholds, but it would be helpful if the Minister expanded on the Government’s reasoning for setting the threshold at £1 million. Did respondents to the Government’s initial consultation—I have a copy here—recommend and agree to such a threshold? The instrument also specifies areas of economic activity termed “sensitive sectors”, which my right hon. Friend the Member Hayes and Harlington raised, where levels of scrutiny will automatically be higher because there is thought to be, according to comments to the consultation, greater risk of subsidies distorting competition or damaging industrial development. The sectors specified are primarily in the areas of metals production, including iron and steel; transport manufacture, including aerospace and automotive; and electricity production.”
“The challenge is ensuring that thresholds are set at a level that captures cases that merit the specified level of scrutiny, without imposing burdens on the CMA or ultimately frustrating much-needed initiatives, perhaps needed at speed to strengthen businesses in particular industries or places. We must be careful that the standard thresholds identified do not capture too much in some areas and too little in others. It would be helpful to understand the process for reviewing the impact, transparency and value for money. The CMA will, I think, report initially after three years on the whole process, but it would be helpful to understand whether the Minister or the Secretary of State will request earlier reports.”
“A subsidy or scheme will be of particular interest where the total value given to a business exceeds £10 million in three financial years, regardless of which public authorities have given those subsidies; where the total value exceeds £5 million in three financial years but the business is in a sensitive sector, we will also come back to that briefly; where it is provided to restructure an ailing or insolvent business; or where it is conditional on the beneficiary relocating and has a value of over £1 million. Other subsidies between £5 million and £10 million, individually or cumulatively, will be subsidies of interest.”
“A public authority must request a report from the CMA on a subsidy or scheme of particular interest before the subsidy or scheme is given or made. A public authority may request a report from the CMA on a subsidy or scheme of interest before the subsidy or scheme is given. In each of those cases, the CMA must advise the Secretary of State whether the subsidy or scheme is consistent with the subsidy control principles and whether there are any changes to its design that could ensure better compatibility. I will come back to the issue of the recommendations from the CMA being non-binding. As the Minister said, the instrument sets the minimum threshold for subsidies and schemes of particular interest at £1 million.”
“At the same time, we need rules and processes to ensure that that is done in a fair and transparent way, so that fair and beneficial competition is preserved and not distorted, businesses and industries are not unfairly disadvantaged, and public money is not spent on the basis of personal favours or improper political considerations. In short, we need a clear focus on impact, transparency and value for money. The regulations provide much-needed clarity and criteria on issues that were not resolved by the 2022 Act and that were left for secondary legislation. Those specifically concern the definitions of subsidies and schemes of interest or particular interest under the Act. Part 4 of the Act provides for certain subsidies or schemes to be referred to the Competition and Markets Authority.”
“As we made clear, Labour recognises the need for a new statutory framework for subsidy control. It is required by the trade and co-operation agreement that the UK entered into with the European Union and by our wider international commitments as a World Trade Organisation member. Subsidies, when effectively used, are an essential element of industrial strategy for businesses large and small, but they need to be effective, fair and accountable. We need Government to get behind the businesses and industries that will deliver growth, jobs and prosperity in every part of our country in the years ahead, and to deliver on national missions and a long-term plan that will help provide confidence for investment.”
“It is a pleasure to serve under your chairship, Mr Gray. This statutory instrument fills important gaps left by the Subsidy Control Act 2022, which received Royal Assent earlier this year. It defines subsidies or schemes of interest or particular interest. It is an important instrument, and we support it. I think we all agree that it is in the interests of levelling up, place-based prosperity, national growth and our green transition that the Act becomes operational as soon as possible. I am surprised and sorry that the Act leaves unanswered crucial questions that I and Labour colleagues raised during its passage—having had four Secretaries of State and four Ministers may have something to do with that, but the Minister may have a different view.”
“The Minister is right that referrals made to the SAU and its reports will be published, but the question was whether a subsequent disagreement would be published anywhere. If a public authority chooses not to go along with the recommendations, is there any transparency over that?”
“I thank the Minister for his generosity in giving way again. For example, as part of the process, a public authority that disagreed with the recommendations in a report within 30 days from the SAU could need to send it a letter to say, “We have taken your report, but have chosen to disagree with the recommendations.” That would then be on the public record.”
“The Minister may have better ideas on how to deal with that question if the Intelligence and Security Committee is not the right place. We have used the ISC because it is a parliamentary Committee that deals with national security matters, is on Privy Council terms, and will have the confidence of Parliament and the Government in reviewing these matters and raising any questions. All the amendment does is provide scrutiny for the exemption process by referring a report to the Intelligence and Security Committee, which ensures that the information remains privileged and not publicly accessible. If the Minister is, as he intimated, unable to support the amendment, I urge him to give us confidence about how he would provide assurances.”
“Friend the Member for Aberavon and I tabled, comes back to scrutiny of the use of the exemption powers. I will probably say a few times today that the title of the Bill includes is the Economic Crime and Corporate Transparency Bill. Where there are questions about a potential lack of or reduced transparency and possible serious impacts, there should be accountability, even from the Secretary of State. We live in a democracy where the Government should be and are accountable for actions of the Secretary of State. The amendment simply states that there should be a process by which any use of the identity verification exemption on national security grounds provided by the clause should be subject to some scrutiny.”
“It is a pleasure to serve under your chairship, Ms Bardell. I thank the Minister for his opening remarks. I recognise that clause 65 gives the Secretary of State the power to provide written notice to exempt someone from identity requirements if necessary in the interests of national security or for preventing or detecting crime. The Opposition recognises the importance of protecting national security, but the Minister will know from previous debates that we seek greater clarity about where exemptions may be granted, and the transparency and accountability around the use of those powers. The Government have tabled amendment 9, which is consequential to clause 65. If the clause is agreed to, the amendment makes sense. Amendment 101, which my hon.”
“I thank the Minister for his intervention. The issue is not what we assume and hope might happen, but having some checks and balances on the use of powers. It is part of our responsibility on the Committee to think that through.”
“However, sometimes even having the number can be a red flag, because ordinarily we might expect one every three months, so why do we have five a month coming through? There are therefore ways in which we can have such controls without putting someone’s identity or security—or the nation’s security—at risk. Having some controls over those powers is a big and important theme of the report. I ask the Minister to consider that and to say: “Look, we will consider whether we can have, without it being too onerous a job, some mechanism for controls and reporting on use of the powers, such as through Privy Council routes.” I would then be happy not to press my amendment.”