A major flaw in the UK's official company register has been exposed after the Blackburn Labour Party was incorrectly listed as a person of significant control for dozens of dormant firms, prompting calls for urgent reform from concerned MPs.
The error, which saw the political party named as a controller for 38 companies it had no connection with, has raised serious questions about the reliability of data held by Companies House. The issue came to light when party officials discovered they were wrongly associated with businesses ranging from a defunct driving school to a dissolved property firm.
Systemic Vulnerabilities Exposed
Kate Hollern, Labour MP for Blackburn, described the situation as "deeply concerning" and has written to Business Secretary Kemi Badenoch demanding immediate action. The case highlights how easily the system can be manipulated or contain erroneous information that could damage reputations.
"This isn't just an administrative error," Hollern stated. "It's a symptom of a much larger problem within Companies House that leaves the door open for serious financial misconduct, including money laundering and fraud."
Cross-Party Support for Reform
The scandal has united MPs across party lines, with Conservative MP Kevin Hollinrake, minister for enterprise, markets and small business, acknowledging the need for greater powers to verify information submitted to the register.
Companies House has since removed the incorrect entries and launched an investigation into how the errors occurred. A spokesperson acknowledged that while they have made progress in improving data quality, "more needs to be done to ensure the register is accurate and reliable."
Broader Implications for Corporate Transparency
This incident comes at a critical time, as the Economic Crime and Corporate Transparency Act 2023 grants Companies House new powers to verify information and remove fraudulent material. However, critics argue that without proper funding and implementation, these powers may prove ineffective.
Transparency International has warned that the UK's corporate register has been repeatedly abused by criminals seeking to launder money through phantom firms. The Blackburn case demonstrates how even legitimate entities can become entangled in these systemic issues.
The government now faces increasing pressure to accelerate reforms and ensure Companies House has the necessary resources to properly verify information and protect against similar errors in the future.
