Draft Law Enforcement and Security (Separation Issues etc.) (EU Exit) Regulations 2020
(3 years, 5 months ago)
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The Minister for Security (James Brokenshire)
I beg to move,
That the Committee has considered the draft Law Enforcement and Security (Separation Issues etc.) (EU Exit) Regulations 2020.
It is a pleasure to serve under your chairmanship, Mr Twigg, and good morning to other members of the Committee.
The Committee will be aware that the Government have been preparing for the end of the transition period on 31 December. This statutory instrument forms one of the legislative changes we are making as part of those preparations to ensure that the law is clear and accessible on cross-border law enforcement and criminal justice matters. I have no doubt members of the Committee will have studied the statutory instrument carefully and read the accompanying impact assessment and explanatory memorandum. I hope it is clear from those not just what the regulations do, but what they do not do.
The regulations we are debating today are required under any European Union exit scenario. They will not enact an outcome of any negotiations. To that end, they are scenario agnostic. Instead, they will provide legal and operational clarity regarding the handling of live law enforcement and criminal justice related cases and procedures at the end of the transition period, and will ensure that the United Kingdom has a fully functioning statute book.
The regulations will do that by performing three main functions. First, they will make the changes needed in UK law to give full effect to the separation provisions contained in the withdrawal and separation agreements. These provisions concern ongoing cases and procedures at the end of the transition period, and place reciprocal obligations on the UK and European economic area-European Free Trade Association states regarding their handling.
Secondly, and in a similar vein, they will make the necessary amendments in UK law to give full effect to the related data provisions contained within those agreements. These provisions concern data accrued before the end of the transition period or under the separation provisions, and will provide clarity for operational partners regarding the handling of such data.
Thirdly, the regulations will address a number of deficiencies that would otherwise arise at the end of the transition period, for example where new EU law has come into force during the period since the Law Enforcement and Security (Amendment) (EU Exit) Regulations 2019 were passed. Addressing those remaining deficiencies will ensure that the UK has a fully functioning and relevant domestic statute book at the end of the transition period.
Overall, the scope of this statutory instrument is narrow. It will give full effect to the separation provisions in the withdrawal and separation agreements by making the necessary technical changes in UK law. Making these changes will provide legal and operational clarity on the handling of live law enforcement and criminal justice cases at the end of the transition period, and will therefore enable the UK to meet its obligations under these agreements.
The regulations are required regardless of the outcome of any negotiations, and form part of a package of legislative changes we are making to ensure that the UK is ready for the end of the transition period. The safety and security of our citizens is the Government’s top priority and this statutory instrument helps to support that.
I commend the regulations to the Committee.
Conor McGinn (St Helens North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg, although as your constituency neighbour and very much the junior partner in that relationship, it feels like I am getting my homework marked by the Chair—but it is genuinely a pleasure to see you in the Chair.
As has been said, this statutory instrument makes the necessary amendments to UK law to give effect to the separation provisions concerning law enforcement and criminal justice co-operation contained within the withdrawal and separation agreements. It facilitates legal and operational clarity on the winding-down of ongoing operations at the end of the transition period. The regulations also address several deficiencies in retained EU law that would otherwise arise following the transition period.
I make it clear that we will not oppose today’s regulations—they are necessary to ensure the ongoing integrity of continuing operations—but I want to raise some important concerns. I hope the Minister will take the opportunity to address them. While acknowledging that the instrument contains technical amendments, we also understand that they are necessary to meet our legal international obligations. It is good to see the Government agree on the importance of that point.
We are a responsible Opposition and want to ensure a functioning statute book after the transition period ends, and to make domestic law as clear as possible. We also recognise that UK law enforcement and its partners, which keep us safe, must have confidence that outstanding cases do not grind to a halt, which would compromise our ability to resolve serious cases, tackle criminality, prevent terrorism and protect our borders. Will the Minister take the opportunity to update us on what discussions he has had with UK agencies and with his European counterparts to allay such immediate and imminent fears and communicate that robust joint mechanisms will be in place to ensure relevant cases can be actioned with confidence, and not delayed or stopped?
The crux of the Government’s argument today rests on providing certainty—that is the claim at least—both operationally and legally to UK law enforcement and the public. I listened carefully to the Minister’s insistence that the regulations are a technical necessity to ensure the smooth transition to alternative arrangements. He also acknowledged that any clarity or certainty provided here is extremely narrow and limited.
We are hardly delivering certainty and confidence when now, just days away from the negotiation deadline and weeks away from the end of the transition period, UK law enforcement and security services still do not know what legal and regulatory framework they will be winding down to, nor what the practical, day-to-day impact of any security and criminal justice deal, or indeed no deal at all, will be on their ability to keep the public safe.
The Government need to be clear with law enforcement and the intelligence and security services, but most importantly, with the British people about what alternative —prospectively weaker—capabilities will mean for the UK’s security apparatus and our ability to protect the public.
On 5 November, the Minister told the House that if
“negotiations…do not conclude successfully, we will move back to pre-existing tools and powers.”—[Official Report, 5 November 2020; Vol. 683, c. 528.]
Two weeks earlier, on 19 October, the Minister for the Cabinet Office implied, in response to a question from the former Prime Minister, the right hon. Member for Maidenhead (Mrs May), that under such a scenario, we could
“intensify the security that we give to British people”.—[Official Report, 19 October 2020; Vol. 682, c. 761.]
Can the Minister tell us what that means? From a senior member of the Government, not least one charged with securing a Brexit outcome, it seems rather vague and complacent.
In his letter to the Select Committee on Home Affairs, published only yesterday, Martin Hewitt, chair of the National Police Chiefs’ Council laid bare the stark operational impact these measures will have. He said that
“the loss of some or all of the tools will mean that, even with contingencies in place, the fallback systems will be slower, provide less visibility of information/intelligence and make joined up working with European partners more cumbersome.”
I have some questions to the Minister on this point. How does he assess the likelihood of the situation that the chair of the NPCC has outlined arising? Given that, as I think he would agree, we need to take the warning very seriously, will he outline the details of any contingency plans that are in place for the loss of these vital tools? On data and information sharing, which is key and which, in terms of prospective ongoing cases, forms a large part of the regulations, lowering current capabilities would be seriously damaging and adversely affect the UK.
Lord Anderson, the former independent reviewer of terrorism legislation, said that UK police would be “increasingly unable to cope” without adequate cross-border data-sharing abilities. That would hinder our ability to receive alerts, search for criminal records, and extradite criminals.
UK law enforcement agencies are concerned. They still do not know what capabilities they will have, for example, in relation to the Schengen information system, SIS II, which the UK uses prolifically and we are set to lose. The alternative, as it stands, is to fall back on the Interpol apparatus. Steve Rodhouse, the National Crime Agency’s director general for operations, made clear the impact of that loss. He said that there are
“capability gaps affecting both sides which will reduce our ability to… exchange real time alerts and data on persons and objects of interest.”
On fast-track extradition arrangements to replace capabilities enjoyed under the European arrest warrant, we are none the wiser. That applies also to the loss of the European criminal records information system—ECRIS—which, as the statutory instrument’s impact assessment highlights, affects around 4,000 requests every month.
The list continues. There is no certainty on Europol, and we have seen the success of European co-operation through Operation Venetic, the biggest and most significant law enforcement operation in the UK. I pay tribute to the NCA for its incredible work on that, but it was done in partnership with law enforcement across Europe. It was instigated by the French and Dutch police and it led to 756 arrests and the seizure of 2 tonnes of drugs, £54 million in illicit cash and 77 firearms in the UK alone. It saved countless lives and took criminals off the streets. It is a tangible product of European co-operation between law enforcement agencies. We will also potentially lose future access to passenger name records data and the Prüm database. I do not need to outline the potential effect of that to the Minister.
I do not want to be uncharitable, but this is something of a mess. To have law enforcement, counter-terrorism and security services winding down operations, some of which we know will not be wound up again, and some of which, if a deal is forthcoming, may or may not be wound up again to effective levels in the new year, is not a responsible or sustainable way to proceed. It is clear that the approach to the negotiations has been dither, delay and complacency. I acknowledge that that has not all been one way. This instrument might be a practical stopgap for now, but I am afraid it represents yet more kicking of the can down the road—which increasingly looks like a cul-de-sac rather than a motorway—with more uncertainty about the impact on ongoing investigations and resources.
It is hard to countenance how an almost blasé, all-right-on-the-night approach has been taken to the vital issue of the security and safety of British citizens, with the result that police efforts and resources are wasted in communicating changes, and their focus is forced to move away from day-to-day priorities to this. We wish that the future had more certainty and clarity for UK law enforcement—and they do, too. With time running out, that is in the Government’s hands and it is their responsibility to deliver.
We appreciate that today’s regulations are necessary for us to fulfil our legal commitments on law enforcement and criminal justice separation provisions, and provide UK law enforcement with some clarity. We will not oppose the regulations because it would be irresponsible and put ongoing operations at risk and people in danger.
However, placed in the wider context, the Minister must realise that any certainty here is limited. Our law enforcement, security services, their operational partners and indeed the wider public, need clarity on where the UK is headed. Importantly, they need to know the practical reality that outcomes of the negotiations—or, worse, a no-deal scenario—will have on the ability to fight crime and terrorism and keep them and our country safe.
James Brokenshire
Although I appreciate the Opposition’s support for the statutory instrument, unsurprisingly, I do not accept the shadow Minister’s contentions about the Government’s approach and posture. I say to him that the UK is, and will continue to be, a global leader on security and one of the safest countries in the world. The Government take their responsibilities for the safety and security of the people of this country incredibly seriously.
As I have highlighted, the regulations will provide legal and operational clarity regarding the handling of live cases and procedures at the end of the transition period, and they will ensure the UK has a fully functioning statute book. As I have explained, they are required under any scenario, regardless of the outcome of the negotiations. Talks obviously continue in Brussels. There has been a constructive atmosphere, and progress has been made on putting legal texts together, but there are still significant differences on the familiar difficult issues—the so-called level playing field, and obviously in relation to fishing. Time is short, and we are focused on reaching an agreement with the EU. In the space of criminal justice, there is a good degree of convergence in what the UK and EU are seeking to negotiate on operational capabilities. In any negotiation, however, nothing is agreed until everything is agreed. We obviously look to continue those negotiations and to find a solution that fully respects the UK’s sovereignty.
I shall respond to some of the points made by the shadow Minister in relation to a non-negotiated outcome, which I think was the main thrust of his remarks. In the event that it is not possible to reach an agreement, the UK has well-developed and well-rehearsed plans in place. He speaks about the incredibly important role of the National Police Chiefs’ Council as well as the National Crime Agency, and I pay tribute to them for all their efforts and their work in seeking to ensure that we are well prepared under any scenario. If the shadow Minister looks at those letters, he will see that they underline those organisations’ preparedness. I pay tribute again to them for the work that they have put in.
Conor McGinn
Does the Minister agree with Martin Hewitt that the loss of tools will mean that, even with the contingencies in place, systems will be slower, provide less visibility and make joined-up working more cumbersome? That is not my contention; that is what the chair of the National Police Chiefs’ Council said.
James Brokenshire
I will come to the hon. Member’s broader point. We can obviously discuss the specific issue of the second-generation Schengen information system, SIS II, and what that does and does not do. Notably, it was introduced in this country only in 2015. We had been reliant on various other measures, such as Interpol, to be able to facilitate exchanges.
This country will remain a safe place, and I reject any contention that there is any lack of emphasis on national security or on ensuring that we do not continue to be a global leader in the way that this country has been.
James Brokenshire
Perhaps I can help the hon. Member by saying that the plans for transitioning will clearly involve co-operation with EU member states in order to reach alternative non-EU arrangements by the end of the transition period where available. Broadly speaking, that would mean making more use of Interpol, Council of Europe conventions and bilateral channels, which are tried and tested mechanisms that the UK already uses for co-operation with many non-EU countries.
Conor McGinn
I have asked the Minister a very specific question: does he agree with the assessment of Martin Hewitt, the chair of the National Police Chiefs’ Council? In a letter to the Home Affairs Committee, he expressed in stark terms his concerns about these specific matters. Does the Minister agree with him or not?
James Brokenshire
I think the shadow Minister’s points are specifically about the second-generation Schengen information system. We have always said—I have said it myself before—that there will be some mutual loss of capability in the event that the UK no longer has access to SIS II. That is why we offered to reach an agreement with the EU that delivers a similar capability. The Commission maintains that it is not possible legally for the UK to continue to co-operate through SIS II after the transition period, but we have maintained our offer. Obviously, we know that there is clear benefit on all sides to working together, which is why we are positive about a continuing relationship with our European partners. That allows us to benefit through our collective and shared security. In the absence of SIS II, we will use Interpol channels, which predate our SIS II access and provide the capability to exchange data and communicate with all our international partners quickly and securely. I underline that the UK has an excellent relationship with Interpol in that regard.
Work continues on the issues and on preparations for all outcomes. The hon. Member for St Helens North highlights national security and counter-terrorism. National security has always been the responsibility of member states. Co-operation with European partners on national security largely takes place outside EU structures and so is not dependent on our membership of the EU. Our bilateral and multilateral co-operation will continue regardless of the outcome of any negotiations. It is important to highlight the work of organisations such as the Counter Terrorism Group, which facilitates counter-terrorism co-operation across 30 European intelligence and security services.
It is important to stress the steps that have been taken, such as the establishment and funding of the International Crime Coordination Centre to help police forces adapt to new processes after transition. Alongside extensive domestic preparations, we are also engaging with member states who have expressed their willingness to continue to share critical law enforcement data with the UK using Interpol channels. Although I recognise that today’s statutory instrument is narrow, dealing with the effective continuation of various operational data sharing post transition that may have commenced before the end of the transition period, no one in this Committee should take anything I say today, as the shadow Minister has tried to play it, as anything other than an indication of our determination to ensure that the UK remains a leader in security. Steps have been taken by police, the NCA and other partners to see that we are ready and we have given them support. Clearly, we would like an agreement with our European partners. That is where the Government’s emphasis continues to be, and we remain positive that even though gaps remain and even though time is short, that can still be achieved in the time available. That is where the Government’s focus remains.
Question put and agreed to.
Draft Coronavirus Act 2020 (Expiry of Mental Health Provisions) (England and Wales) Regulations 2020
(3 years, 5 months ago)
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The Chair
Before we begin our debate, I thank Members for observing the social distancing regulations. Hansard colleagues would be grateful if any speaking notes could be sent to hansardnotes@parliament.uk.
The Minister for Patient Safety, Mental Health and Suicide Prevention (Ms Nadine Dorries)
I beg to move,
That the Committee has considered the draft Coronavirus Act 2020 (Expiry of Mental Health Provisions) (England and Wales) Regulations 2020.
It is a pleasure to serve under your chairmanship, Mr Davies. I am pleased to speak in support of the draft statutory instrument, which was laid before the House on 21 October. The Government have committed to keeping all elements of the Coronavirus Act 2020 under close review and to sunsetting any provisions that are no longer necessary. The Act expires two years from when it was passed, but it contains a power to bring forward the expiry date of any of its provisions.
My right hon. Friend the Secretary of State for Health and Social Care told the House in September, during the debate on the six-month review of the Coronavirus Act, that the emergency provisions of schedule 8 in England are to be sunsetted as they are no longer necessary. The regulations enact that decision. The regulations expire the provisions in schedule 8 to the Coronavirus Act 2020, which allowed for a temporary change to the operation of certain sections of the Mental Health Act 1983.
The emergency provisions that the regulations remove were included in the Act to protect the safety of patients and to maintain access to essential care. They were designed to enable mental health services to continue to provide vital care and treatment to patients in the event of the pandemic having a drastic impact on staffing levels. These were always powers of last resort; they have not been commenced and have never been used, because they have not been required. They were designed so that the emergency changes would be switched on by the Secretary of State only if staffing shortages in the mental health sector due to the pandemic were so severe that patient safety was significantly compromised.
I will briefly remind the Committee of the provisions we are seeking to expire in the draft regulations. The provisions would have enabled an approved mental health professional to apply to detain someone on the advice of one registered medical practitioner rather than two, if securing two recommendations was considered impractical or would lead to undesirable delay. They would also have allowed extensions to the time that individuals who were already hospital in-patients could be temporarily detained, pending an application for longer term detention under the Mental Health Act.
For individuals accused of crimes, defendants and prisoners with a mental health condition, the provisions would have extended the amount of time they could be remanded to hospital. The provisions would have allowed an accused person, convicted person or prisoner to be sent to hospital on the recommendation of just one registered medical practitioner rather than two. They would also have extended the procedural time limits for transferring a prisoner to hospital.
We are highly conscious of the gravity of the effects of these provisions, should they be commenced, and the need for them has been kept under continual review. We are pleased that, due to the resilience and ingenuity of NHS England, the provisions have not been needed and have never been used. We are removing them because we have listened to stakeholders and to Parliament. Three separate Select Committee reports have recommended that we take this step.
The Joint Committee on Human Rights reported on the Government’s response to covid and argued that, if enacted, the provisions would weaken the protections available for people subject to the Mental Health Act. The report also highlighted the concerns of stakeholders, including Mind, the Royal College of Nursing and the National Survivor User Network. The Public Administration and Constitutional Affairs Committee report on the Government’s response to covid and the Coronavirus Act 2020 also noted the concerns of the mental health charity Mind and its call for the removal of these temporary powers. Further to this, the Women and Equalities Committee highlighted that evidence suggests that the measures are unlikely to be needed. The Committee noted concern that the provisions
“went against the direction of travel in Mental Health Act reform”
and most notably the need for
“a more balanced system with more safeguards, more choice and less restriction”,
as set out in the independent review of the Mental Health Act 1983 chaired by Sir Simon Wessely. The Committee stressed that the measures should not be kept available on a “just in case” basis. The same report noted that the Royal College of Psychiatrists had emphasised to the Committee that any use of the emergency mental health provisions would have an unequal effect on black people, whose contacts with mental health services are disproportionately based on detention orders requiring them to stay in hospital.
The announcement of the decision to expire these provisions has been positively received across the House and by a wide range of stakeholders. Rethink Mental Illness said that the decision came as a relief to many people living with mental illness and their loved ones. I am pleased to reiterate the Government’s commitment to publish a White Paper setting out our priorities for reform to address inequalities in the existing system, strengthen patients’ rights and enhance protections within the Act. We will do this as soon as possible. The Secretary of State was not persuaded even during the initial covid peak that these powers were necessary, because our mental health services had shown incredible resilience and ingenuity. These powers are no longer required, so the regulations seek to expire them. It should be noted that the regulations do not expire the transitional provisions in schedule 8 to the Act; however, these will have no legal or practical effect.
In relation to Wales, the regulations expire only matters that are not devolved to the Welsh Government—those which relate to patients under the Mental Health Act involved in criminal proceedings or under sentence. Provisions under schedule 8 to the Act devolved to the Welsh Government relating to health services remain in the Coronavirus Act, with an exception for provisions relating to the Welsh mental health review tribunal. None of these provisions has been commenced. Should it ever be deemed necessary to return these provisions, we will introduce new legislation.
Mental health services were able to continue to support people detained under the Mental Health Act despite the pressures resulting from the pandemic. The Government and NHS England and NHS Improvement have taken measures to support mental health services to continue to offer vital care and treatment to individuals despite ongoing workforce pressures resulting from the covid-19 pandemic.
The Department and NHS England and NHS Improvement issued legal guidance for mental health, disability and autism, and specialised commissioning services supporting people of all ages during the coronavirus pandemic. The guidance set out how the Act’s code of practice may be interpreted during this period, including, for example, allowing the delivery of statutory forms electronically to allow mental health staff to work more flexibly and reduce risk of covid-19 infection. The guidance also set out how video technology can be used for medical assessments to be carried out remotely under the Act; this is to make it easier to have two doctors examining a patient during the pandemic. The Department has also supported the Care Quality Commission in bringing in a modified second-opinion appointed doctor or SOAD service, which allowed the service to work remotely. This enabled procedures around assessing and improving the medical treatment of patients detained under the Act to continue as normal, rather than enacting powers that would lessen this safeguard.
Those measures, coupled with mental health staff’s resilience and innovation, have been effective in mitigating pressure on mental health services, avoiding the need to commence the emergency powers. NHS mental health services have coped without needing to turn on these emergency powers through their hard work and innovative approaches, supported by the Department, NHS England and NHS Improvement,.
Dr Rosena Allin-Khan (Tooting) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies.
The removal of these provisions from the Coronavirus Act is, of course, extremely welcome, and Labour Members will not seek to oppose it. When the Coronavirus Act was hastily drafted and enacted in light of the threat our country was facing in March, we accepted the inclusion of these regulations, to be used only as a last resort. It is a relief that the provisions have never had to be used, and we are pleased to see them dropped.
The legislation represented a significant reduction in the safeguarding of individuals subject to the Mental Health Act, and I am sure that the expiration of the provisions will be gladly received by those who are living with mental ill health and by their families. I thank all health and care staff for their hard work, and I am grateful for the work of the CQC and NHS England, whose response to the virus was robust enough that the provisions were never turned on.
Although the mental health provisions in the Coronavirus Act were never activated, that does not mean that the coronavirus has not had a significant impact on the mental health system in England. In March, at the very beginning of the pandemic, an additional 2,441 people were discharged from mental health hospitals. Compared with February, that is an increase of 26%. At that time, increasing bed capacity was a priority. Although it was necessary to take that step where it was safe to do so, it was vital that discharged patients continued to receive the care they needed.
Inevitably, the redeployment of staff to concentrate efforts on tackling the virus led to disruption to existing mental health services, with surveys from charities such as Rethink Mental Illness and Mind showing that many struggled to access support during the pandemic. That was especially true for those with existing mental health conditions, including many who were abruptly discharged. The needs of people who are living with severe mental illnesses are complex, and it is vital that they receive appropriate care in all settings.
As the number of cases and hospital admissions related to covid-19 continue to rise, so too does the prospect of having to empty beds again. In August, the Government announced a £588 million fund to support the safe discharge of patients in the event that it becomes necessary to free up space for coronavirus patients. That money is essential to prevent a repeat of the mistakes that were made in March, but I had it confirmed to me last week that mental health trusts are unable to access that funding. Similarly, alongside the announcement of that money guidance was published outlining the correct procedure for safely discharging patients from hospital settings. Again, mental health trusts were excluded from that, and there is currently no equivalent guidance for them. Will the Minister please outline why mental health trusts are excluded from this vital funding, and will she confirm what resources are being made available to trusts to support the safe discharge of patients and ensure that they receive ongoing care in the community?
Concerns have also been raised about patients who were not discharged. Many mental health estates were not built with social distancing in mind, and that has affected treatment and access to visits on and off site. Reduced contact with family and friends has undoubtedly had an effect on in-patients. Staying in a mental health ward can already be an extremely lonely experience, but the extra restrictions on social contact mean that it can feel truly, devastatingly isolating. Although many people accept that digital solutions are necessary, their success in such settings has been mixed. In-patients have stated that when social contact was facilitated virtually, it made a positive difference to their experience; however, when treatment was provided through digital means, many felt that the standard of care dropped.
It is important to remember that a large number of those who have lived in mental health wards throughout the pandemic are children who are living with severe mental health disorders, such as eating disorders or severe depression. They need a more intense level of care than would be possible in the community, but that does not make the experience any less traumatic for a child. The Children’s Commissioner found that there was a great deal of resilience on those wards throughout the pandemic, with staff working exceptionally hard to ensure that the standard of care and support provided to the children did not drop, but significant challenges remained. Although staffing rates stood firm in many children’s wards, visits from external professionals dropped alarmingly throughout the pandemic. The disruption to mainstream education filtered its way into hospitals, with many teachers stopping all face-to-face teaching on the wards, which left untrained hospital staff to deliver teaching in addition to caring for patients.
During this second spike of the virus, it is crucial that all mental health in-patients receive appropriate, high-quality care. Will the Minister outline the measures that are in place to ensure that people in mental health hospitals will receive the best care available to them, despite ongoing pressures from the coronavirus?
Entrenched inequalities in mental health treatment and access to services have existed for many years, but they are undoubtedly being deepened during the pandemic. The disproportionate impact of the virus on black, Asian and ethnic minority communities has put them at greater risk of developing mental health problems. That is especially concerning, because historical racism and experiences of inappropriate support have left many individuals from BAME communities distrustful of mainstream health services, highlighting the need for support in the community. Distrust should not come as a surprise to the Government, considering that in 2019-20 the rate of detentions in England under the Mental Health Act was more than four times higher for black or black British people than it was for white people. The racial disparity in detentions under the Mental Health Act underlines the need to address health inequalities and to ensure that provision is widely accessible and that support is suitable for all. I would be grateful if the Minister outlined what work is being done to address the inequality.
We need to be clear that for many people, community support is the most effective way to improve their wellbeing, and that has to be a priority as we look to the recovery period. What work is being done to strengthen mental health support in the community at this time?
The impact that covid-19 has had on the wellbeing of the nation has been profound. The Centre for Mental Health found that approximately 10 million additional people will require some form of mental health support as a result of the pandemic. It is important that the Government recognise the additional need and have a strategy to address it during winter and beyond. We know that the best mental health strategies are proactive and preventive. Early intervention is key to addressing mental health concerns before they develop into something more insidious. The Government must ensure that services are prepared and have the resources to cope with any rise in demand.
The expiration of the provisions today is a small but welcome step in ensuring that patients who rely on safeguards in the Mental Health Act are adequately protected. I urge the Government to not stop there. The next step must be to publish the long-awaited White Paper on the Mental Health Act and to stand by their commitment to reform the legislation to better support people who are subject to it. Only then can we be confident that those living with severe mental ill health will be properly supported by the system that is designed to protect them.
Ms Dorries
We recognise the immense strain that the pandemic and the measures to contain it have placed on everybody’s lives, particularly in-patients in mental health services and people who work for the NHS in such services. Mental health is critical in these unprecedented times, and we recognise how important it is that people get the support they need for their mental health.
We know that some people will experience exacerbated mental health problems as a result of the pandemic, and there are also issues with people’s wellbeing. I am probably accurate in distinguishing between wellbeing and mental illness—I think the hon. Member for Tooting used the term “mental illness” in her response. She was quite right to highlight that, during this pandemic, there has been pressure on people with pre-existing mental health problems and on the new cohort—frontline workers—who have been particularly susceptible during the pandemic.
Mental health continues to be our priority. We are doing our utmost to ensure that mental health services are there for everybody who needs them during the pandemic. As I said in my opening speech, that is thanks to the hard work and innovative approach of NHS workers, NHS England and NHS Improvement. We have recently announced our winter plan for mental health, in which we will outline the support that is available for people over the coming winter. I hope very shortly—within days—to be able to bring that plan forward. It is one element of our work to deliver a modern mental health service and to meet the demands created by the pandemic. The winter plan, which will be published imminently, is a demonstration of the Government’s firm commitment to supporting the mental health of everyone throughout this winter period and beyond.
We are absolutely committed to continuing our investment and to expanding the transformation plan for mental health services in England. As I have said many times, that amounts to an additional £2.3 billion of extra funding a year in mental health services by 2023-24. The Government are setting out clear commitments to support mental health services to manage pressures over the winter, and we will also do so during our winter plan. All health and social care staff, including those providing mental health services in hospitals, get priority access to testing when they show symptoms. Hospitals can test patients, including those admitted with mental health conditions, in areas with a higher prevalence of covid.
The NHS worked hard to keep mental health services going during the first peak, using technology where needed but also providing face-to-face appointments where appropriate. All mental health trusts have established a 24/7 urgent mental health helpline, where people experiencing a mental health crisis can access support and advice. We took up this idea in late March, when we realised that we were facing the full blast of the pandemic. We had a meeting on, I think, 4 April with NHS England and all the mental health trusts; the 24/7 crisis helpline rolled out across all mental health trusts at a rapid pace. and it has been there for anyone facing a mental health crisis to use.
The Government have committed more than £400 million over the next four years to refurbish mental health facilities, to get rid of dormitories in those facilities and to benefit the patients of 40 trusts across the country. We are committed to supporting NHS staff. The NHS is setting up staff mental health hubs to provide proactive outreach, in addition to the services we are already providing for NHS frontline workers. We are investing £50 million to ensure that all staff get rapid access to those expanded mental health services.
To bring us back to the core purpose of the Committee, the Government committed to keeping all elements of coronavirus under close review and to sunset any provisions that are no longer necessary. The emergency modifications to the Mental Health Act were designed as a backstop to support services if unprecedented constraints in the mental health sector put patient safety at risk during the pandemic, and the Government have remained conscious of the need to balance that with the rights of individuals who are detained under the Mental Health Act. Due to the resilience and the ingenuity of the NHS, we have not needed to switch on the provisions; now is therefore the right time to expire them.
This is an important milestone in our work to make much-needed reforms to the Mental Health Act, which will ensure that patients have greater autonomy and control over their care and treatment. The reforms will be set out in the Government’s White Paper on the subject, which will be published shortly. I commend the draft regulations to the Committee.
Question put and agreed to.
Draft Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2020
(3 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)
I beg to move,
That the Committee has considered the draft Common Fisheries Policy (Amendment etc.) (EU Exit) Regulations 2020.
It is a pleasure to serve under your chairmanship, Sir Edward. These regulations were laid under the European Union (Withdrawal) Act 2018. As with previous EU exit fisheries statutory instruments, the technical amendments made by this SI will ensure that retained EU law provides UK law with a mechanism that is both effective and enforceable. This SI does not make any policy changes to retained EU law, and no change is expected in how the fishing industry conducts itself.
The amendments extend and apply to the United Kingdom. Fisheries management in the UK is largely devolved, so this SI has been developed and drafted in close dialogue with the devolved Administrations, which have given their consent. That ensures an approach that is consistent with both the devolution settlement and existing systems of fisheries management.
The SI makes amendments to retained EU law in three policy areas: discards, quota and data collection. Turning first to discards, the changes implement the requirement to land all catches of species that are subject to catch limits and to count them against quota unless they are specifically exempted. The amendments replace references to EU bodies with references to the relevant UK bodies and remove the requirement to report data to the Scientific, Technical and Economic Committee for Fisheries—an EU body. The UK will of course still ensure that the relevant data is collated and reviewed by a replacement scientific body that we are currently developing. Our discards policy will of course continue to be scientifically based.
Previous EU exit SIs made in March and October 2019 made discard plan regulations that were operable in retained EU law at that time. However, the EU has since introduced new versions of the regulations, so because UK fishermen are already working to the standards in the new versions, we felt it was important to mirror current EU law, which is partly why we are updating the regulations.
Secondly, the SI will amend the EU’s 2020 total allowable catch and quota regulation in retained EU law as well as revoking the 2019 version. As we become an independent coastal state in 2021, we will move from having UK quota set at an EU level to the Secretary of State determining the UK quota. These regulations therefore replace EU references with the relevant UK ones to ensure that rules continue to apply effectively to UK vessels. One example is sea bass fisheries, where we are amending the regulations to prohibit UK vessels from fishing for sea bass in certain areas to match the prohibition that exists for EU vessels. We are again changing previous EU exit SIs to remove some earlier amendments that apply to regulations that have now been changed by the EU.
Thirdly, the SI makes amendments to the data collection framework. The regulations require EU member states’ vessels to conduct certain surveys at sea. We are removing the list of surveys and replacing it with a reference to the UK’s national data collection work plan. Without that amendment, UK vessels may inadvertently be required to conduct surveys in areas that are no longer relevant to the UK and are outside our exclusive economic zone.
Finally, as I already mentioned, this SI amends several previous fisheries EU exit SIs because changes have been made by the EU since they were passed by this House. We are therefore updating this SI to reflect those changes. Previous amendments to the retained EU law versions of regulations implementing the European maritime and fisheries fund are also removed by this SI, because the withdrawal agreement contains specific rules that will apply to the EMFF during the period when the fund will wound up and closed.
In short, this SI makes amendments that will assist with the smooth running of fisheries policy in accordance with the Fisheries Bill, which we hope will shortly become the Fisheries Act. I commend the regulations to the Committee.
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward, and to speak for Her Majesty’s official Opposition this morning. Labour does not seek to divide the Committee, but I will ask a few questions of the Minister in relation to the draft statutory instrument before us.
The Government have made a series of promises to voters about sustainable fisheries management and the control of our waters, and we will continue to hold the Government to account on those commitments. The stated intention of this SI is to ensure
“there is immediate continuity in the regulation of UK waters at the end of the Transition Period.”
Some of the changes make sense within the context that several of the retained rules from the common fisheries policy need to be changed where provisions would no longer operate effectively outside EU structures.
While the fisheries administrations will amend retained EU law over time in order to implement their own policies, I am worried by the impact of this Government’s attempts to weaken existing requirements in relation to scientific information and research surveys, sustainability of stocks, and reporting. The changes could limit the use of scientific expertise in decision making and threaten the sustainable management of fish stocks.
As ClientEarth pointed out, the requirements for authorities to submit annual additional scientific information supporting exemptions for plaice, skates, rays to the STECF has been removed. That requirement has not been replaced with a separate requirement on the authorities to collect the data and send it to any scientific body or any authority for review. Furthermore, the SI transfers powers from the STECF to the fisheries administrations to authorise gear types not specified in the regulations. Does the Minister believe that fisheries authorities have an equivalent level of expertise?
I want to press the Minister on the timeframe for the creation of a replacement fisheries advisory framework for the UK. When should we expect to see it, and what will its remit be? Without the assistance of highly qualified scientific personnel, I am worried that the Government will be paying lip service to their manifesto promise to have a legal commitment to fish sustainably. Without expert scientific advice to inform up-to-date and comprehensive data, how do we know that our post-Brexit fisheries regime will be truly sustainable? What assurances can the Minister give to fishers and to businesses in the sector? We are not seeking to divide the Committee, but I hope that she can answer those few questions.
Victoria Prentis
I am delighted to reconfirm the Government’s commitment to sustainable fishing. There is no weakening in our policy at all. Achieving healthy fish stocks is the first step to achieving a vibrant commercial and recreational fishing industry.
The Fisheries Bill, which we hope will become an Act later this week, sets out our commitment to sustainable fishing, The joint fisheries statement, which will be drafted and adopted by the UK Government and the devolved Administrations, will set out the policies in more detail, enabling us to achieve the fisheries objectives that are set out in clause 1 of the Bill. The regulation on total allowable catches is incorporated not in this SI but—much better than that—in the Fisheries Bill itself. The comparable UK provisions are in clauses 2 and 26, and the fisheries management plans will put flesh on the bones of those policy intentions. We are determined to achieve or maintain sustainable levels for the stocks that are covered, and there is no need to duplicate that intention in this SI.
The SI merely ensures that retained EU fisheries law is effective and enforceable after the end of the transition period. It tidies up our previous SIs to ensure that the UK statute book will not contain amendments to regulations that are no longer part of EU law. At the end of this year, EU law will cease to apply directly to the UK, with retained EU law taking its place, and the statute book needs to be correct to ensure that that important change can take place smoothly. The SI is a key part of that preparation and will help us to meet our commitment to deliver a prosperous and sustainable fishing industry for future generations. I therefore commend the regulations to the Committee.
Question put and agreed to.
DRAFT BANK RECOVERY AND RESOLUTION (AMENDMENT) (EU EXIT) REGULATIONS 2020
DRAFT SECURITIES FINANCING TRANSACTIONS, SECURITISATION AND MISCELLANEOUS AMENDMENTS (EU EXIT) REGULATIONS 2020
DRAFT FINANCIAL HOLDING COMPANIES (APPROVAL ETC.) AND CAPITAL REQUIREMENTS (CAPITAL BUFFERS AND MACRO-PRUDENTIAL MEASURES) (AMENDMENT) (EU EXIT) REGULATIONS 2020
DRAFT BEARER CERTIFICATES (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS 2020
(3 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Bank Recovery and Resolution (Amendment) (EU Exit) Regulations 2020.
The Chair
With this it will be convenient to consider the draft Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020, the draft Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020, and the draft Bearer Certificates (Collective Investment Schemes) Regulations 2020.
John Glen
Thank you, Sir David. It is a pleasure to serve under your chairmanship yet again. The second bank recovery and resolution directive updates the EU’s bank resolution regime, which provides financial authorities with powers to manage the failure of financial institutions in a way that protects depositors and maintains financial stability while limiting the risks to public funds. Under the terms of the withdrawal agreement, the UK has a legal obligation to transpose the directive by 28 December 2020, and the first statutory instrument satisfies that obligation.
In transposing the BRRD II directive, the Government have been directed by the commitment to maintain prudential soundness alongside other important regulatory outcomes, such as consumer protection and proportionality, when leaving the EU. We have also taken account of concerns raised by industry on elements of the directive that could pose potential risks to financial stability and consumers by tailoring the approach for the UK market.
Subsequently, we are not transposing the provisions in the directive that firms do not need to comply with until after the end of the transition period. We are also sunsetting specific provisions so that they cease to have effect in the UK after the end of the transition period, as well as inserting provisions to ensure that the elements that remain in effect after the end of the transition period continue to operate effectively. The sunsetted provisions will cease to have effect in the UK from 11 pm on 31 December 2020. Our approach meets our legal obligations and ensures that the UK’s resolution regime remains robust and in line with international standards. We have interacted with industry and stakeholders to help explain exactly what the change means for them.
Turning to the content of the draft Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020, the SI is vital in ensuring that the UK has a fully effective legal and regulatory financial services regime at the end of the transition period. The approach taken aligns with the general approach established by the European Union (Withdrawal) Act 2018, providing continuity by retaining existing legislation at the end of the transition period, but amending where necessary to ensure effectiveness in a UK-only context. Specifically, this SI amends and revokes aspects of retained EU law and related UK domestic law, makes a small number of necessary clarifications and a minor correction to earlier financial services EU exit instruments, and provides sufficient supervisory powers for the financial services regulators to effectively supervise firms during and after the end of the transition period.
Moving on to the draft Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020, the fifth capital requirements directive—known as CRD V—continues the EU’s implementation of the internationally agreed Basel standards, which further enhance international prudential standards and regulation and aim to help ensure the safety and soundness of financial institutions. This instrument will allow for the transposition of CRD V into UK law, as is legally required under the terms of the withdrawal agreement. It will also ensure that the legislation that transposes CRD V continues to operate effectively in the UK after the end of the transition period. As with previous capital requirement directives, the Government will delegate the majority of the responsibility for implementation to the independent Prudential Regulation Authority, which has the requisite technical knowledge and expertise to ensure an effective and proportionate implementation. This instrument therefore only includes provisions that are legislatively necessary to ensure that the PRA can effectively implement CRD V.
The instrument makes changes to the macroprudential toolkit to preserve the current level of macroprudential flexibility. The most important of these is enabling the PRA to apply an “other systemically important institutions” buffer and a systemic risk buffer to relevant institutions to address particular financial stability risks. In line with requirements of article 21a of CRD V, the instrument also allows holding companies in scope to apply for supervisory approval. The framework and scope of the approval regime will be administered by the PRA and the instrument will also ensure that the PRA has the appropriate tools to ensure compliance with it.
Although the capital requirement directives were created with banks in mind, they also extend to investment firms. However, the risks faced and posed by investment firms are substantially different to those of banks. The instrument therefore excludes non-systemic investment firms from the scope of CRD V. Until the Financial Conduct Authority introduces a prudential regime for investment firms, about which I have spoken to the chief executive just today, following Royal Assent to the Financial Services Bill, investment firms will remain subject to the existing prudential framework.
Finally, let me turn to the content of the draft Bearer Certificates (Collective Investment Schemes) Regulations 2020. The UK has played a leading role in transforming tax authorities’ ability to work across borders to tackle emerging international tax risks. Maintaining the UK’s position and driving forward this agenda is a central pillar of the Government’s no safe havens strategy, which aims to improve offshore tax compliance so that everyone pays what they owe. Bearer certificates are anonymous and infinitely transferable, making them an easy means of facilitating illicit activity such as tax evasion or money laundering. It is for this reason that UK companies have been prohibited from issuing them since 2015.
A 2018 report from the OECD’s global forum noted that although the UK had mostly addressed its 2013 recommendations on the prohibition of bearer shares,
“a small cohort of entities and arrangements…are still able to issue bearer shares or equivalent instruments.”
The report went on to recommend that the UK abolish bearer shares. This instrument implements that recommendation and prohibits the remaining entities capable of issuing bearer shares or certificates, which include certain types of collective investment schemes, from doing so. It also makes arrangements for the conversion or cancellation of any existing bearer shares. It brings those remaining collective investment schemes, including open-ended investment companies formed before 26 June 2017 and all unit trusts not authorised by the Financial Conduct Authority, in line with companies formed under the Companies Act 2006, which are already prohibited from using bearer shares by the Small Business, Enterprise and Employment Act 2015. Complying with the global forum’s recommendation will help ensure that the UK maintains its position at the forefront of the international community, continuing to set standards that help improve offshore tax compliance and fund our vital public services.
In summary and in conclusion, the Government believe that these four instruments are necessary and vital for the UK’s financial services regulatory architecture, and I sincerely hope that the Committee will join me in supporting the regulations this afternoon.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to serve under your chairmanship, Sir David.
We have a lot before us this afternoon. These statutory instruments are the latest in a large-scale exercise on the part of the Treasury, and indeed other Departments, to onshore various parts of EU legislation. I make no criticism of the Minister personally; I am sure it was not his decision that that should all be done in this way, and he has been very straight with me in everything we have debated in the six months or so that we have been opposite each other. However, the volume of the provisions before us, which on a quick count amount to around 130 pages of complex legislation, and which we have to go through in a 90-minute process, creates the impression of a Department shovelling legislation out the door before the end of the year. If we are honest, it certainly does not make for a sensible scrutiny process, given that we are expected to debate and scrutinise all these instruments, relating to complex issues such as bank recovery and resolution, capital requirements, holding companies and securitisation, within a short time.
We have four instruments before us, although the bearer one is perhaps a bit different. However, we could almost pose the question: if we are going to do it like this, why not 40 or 400? It would make as much sense as doing these four together. The truth is that there may be items in these instruments that prove to be significant further down the line, but the manner in which they have been presented for debate makes that difficult to judge. If we are honest, this is the appearance of proper parliamentary scrutiny; it is not the reality. Presenting a volume of legislation such as this is Potemkin scrutiny. I repeat: I make no criticism of the Minister personally, and I am not having a go at him, but this is not the best way to debate and handle things, and doing so does not reflect well on Parliament. However, I have a few questions for him on the content.
Bank resolution and recovery became very important after the financial crisis. When banks failed, there was no adequate living will; there was no means of recovery that did not involve either desperate mergers and shotgun weddings between institutions or the state stepping in to bail institutions out. Where they were allowed to fail, the long tail of consequences often proved disastrous for the rest of the financial system, for contracts that had previously been agreed and so on. That experience produced this debate and this legislation about capital levels, leverage ratios and bail-in debt, which could be transferrable into equity if a bank got into trouble. The question really is: to what degree do the instruments before us herald any change from the approach that has been developed over the past decade or so since the financial crisis?
The same question applies to the capital requirements instruments. Over-leveraging was at the heart of the financial crisis. The esteemed former Governor of the Federal Reserve, Paul Volcker, gave evidence to a Committee in this House some years ago. He quoted a leading banker as saying that his bank did not need any capital at all—money could always be borrowed on the wholesale markets. When times are good and markets are very liquid, there may be circumstances where that is true, but we discovered to our cost that, when times are not good, taking the view that a bank does not need any capital can have horrendous consequences. To quote perhaps the most obvious UK example, RBS was leveraged to a ratio of around 50:1 just before the financial crash. Again, I ask the Minister: in what way will this capital buffers instrument make any difference to how we approach the crucial issue of what is, in the end, public insurance against bearing the costs of failure? That is really the question we could ask about all these instruments: do they make any difference one way or the other to the degree of public security against the failure of financial institutions?
My third question for the Minister relates to the draft Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020, and I refer him to regulation 72 on cross-border payments. He will be aware of the long-standing problem of hidden charges in remittances, which can end up costing people a lot of money and depriving those to whom the money is intended of the full value of the transfer. This is a multibillion-pound industry, and many people living in the UK send remittances home to families in other countries every year. Will the Minister clarify that this instrument does what he said was the Government’s intention in a written answer released on 3 July to a question from the hon. Member for Altrincham and Sale West (Sir Graham Brady)? The Minister said that
“the full cost of any fees and charges”
must now be explicit and cannot be hidden in interest rates that are obscure to the person purchasing the service.
My final question is, again, more about the process. What is the relationship between this onshoring process through these statutory instruments and what we are doing in the Financial Services Bill, which is currently in Committee? That, too, contains a lot of onshoring, so why are some things being onshored through statutory instruments, which are debated in this forum with all its constraints and lack of amendments, yet the ones in the Bill are going through the full legislative process, with a Committee stage at which amendments can be tabled and matters can be dived into more deeply and a Report stage and so on? I know the difference between the two processes, but why are there different approaches to some types of onshoring?
John Glen
I listened carefully to what the right hon. Gentleman had to say, and he is, as always, the model of courtesy and constructive opposition. The substantive challenge that he offered was about the value, legitimacy and appropriateness of a four-in-one SI debate. It is vital that we deliver each of these financial instruments before the end of the transition period both to ensure continuity and a fully functioning and effective legal and regulatory regime from 1 January 2021 and, in the case of the draft Bearer Certificates (Collective Investment Schemes) Regulations 2020, to ensure that the UK meets its international obligations.
Given the links across each of the financial services instruments and the importance of them coming into force before the end of the year, it is appropriate for the Committee to consider them together, and it is the most effective use of parliamentary time. It is also the case that the SIs could not have been brought forward sooner. Several of the provisions in the instruments fix deficiencies in changes to EU regulations that have only recently become applicable during the transition period.
The right hon. Gentleman asked three specific questions about the SIs and then one about the process. He first asked about the extent of the changes from the BRDD II resolution regime. Under the terms of the withdrawal agreement, the Government will implement EU legislation, such as this regime, that evolved during the transition period. In our transposition of BRDD II, we have considered which provisions would not be suitable for the UK resolution regime after leaving the EU, while still maintaining that prudential soundness and the other important regulatory outcomes, such as consumer protection and proportionality. We have also taken into account concerns raised in consultation responses about the potential risk to financial stability and consumers. Given the complexity of those considerations, I am happy to write to the right hon. Gentleman to set things out more clearly.
The right hon. Gentleman asked about the extent to which CRD V changes the capital requirements regime. The capital buffers instrument is being introduced partly to ensure that the current macroprudential flexibility is maintained. The purpose of the buffers is to allow the regulators to continue to be able to address financial stability risks, including those posed by large institutions.
The right hon. Gentleman asked about hidden charges in remittances and referenced an answer I gave on 3 July about their cost. I am sorry, but I will have to write to him on that matter as well. I am sorry that I cannot offer him a clear answer now. I do not want to busk it.
Mr McFadden
No, I am grateful to the Minister for giving way. I would be grateful if he clarified the point. Let me be clear why. A clarification from him that the intention is to make transparent the full cost of fees and charges will help the regulators to police the charging of the instruments. If the Minister clarifies the matter in that way, that might help stop some of the practices that we have seen in the past whereby charges are hidden, to consumers’ cost. Clarification would therefore be helpful.
John Glen
I respect that point and I am happy to give that clarification at the earliest opportunity.
The final process point that the right hon. Gentleman set out is the relationship between the onshoring programme and the Financial Services Bill that is now in Committee. The EU exit legislative programme, known as the onshoring programme—I seem to have been engaged with it all my life—is about ensuring a fully functioning legal and regulatory financial services framework at the end of the transition period.
The Financial Services Bill is an important step in taking responsibility for our financial services regulation, ensuring that we maintain the highest regulatory standard and remain an open and dynamic global and financial centre now that we have left the EU. It will deliver several existing Government commitments and ensure that the UK maintains that world-leading standard. It goes beyond the simple process of onshoring what we have had to date and what has gone live this year. It looks forward and sets out, with a new accountability framework, how the regulators will act. It also enacts a number of other smaller measures. However, I concede that it is a complex process—I do not mean that to sound patronising—whereby we have been trying to onshore and then look forward. The Bill, which we will hopefully take through Parliament, is the first in a series of steps that will involve legislation in subsequent Sessions.
I hope that I have substantively, if not exhaustively, addressed the points that have been made. As ever, I thank the right hon. Gentleman for the constructive way that he has brought his points to the Committee. I hope that the Committee is sufficiently satisfied to support the regulations.
Question put and agreed to.
DRAFT SECURITIES FINANCING TRANSACTIONS, SECURITISATION AND MISCELLANEOUS AMENDMENTS (EU EXIT) REGULATIONS 2020
Resolved,
That the Cttee has considered the draft Securities Financing Transactions, Securitisation and Miscellaneous Amendments (EU Exit) Regulations 2020.—(John Glen.)
DRAFT FINANCIAL HOLDING COMPANIES (APPROVAL ETC.) AND CAPITAL REQUIREMENTS (CAPITAL BUFFERS AND MARCRO-PRUDENTIAL MEASURES) (AMENDMENT) (EU EXIT) REGULATIONS 2020
Resolved,
That the Committee has considered the draft Financial Holding Companies (Approval etc.) and Capital Requirements (Capital Buffers and Macro-prudential Measures) (Amendment) (EU Exit) Regulations 2020.—(John Glen.)
DRAFT BEARER CERTIFICATES (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS 2020
Resolved,
That the Cttee has considered the draft Bearer Certificates (Collective Investment Schemes) Regulations 2020.—(John Glen.)
Draft Hazardous Substances and packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020
DRAFT OZONE-DEPLETING SUBSTANCES AND FLUORINATED GREENHOUSE GASES (AMENDMENT ETC.) (EU EXIT) REGULATIONS 2020
(3 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
Before we begin, I remind hon. Members about the social distancing requirements. Spaces available to Members are clearly marked, and our Hansard colleagues would be grateful if you sent any speaking notes to hansardnotes@parliament.uk.
The Lord Commissioner of Her Majesty’s Treasury (James Morris)
I beg to move,
That the Committee has considered the draft Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020.
The Chair
With this it will be convenient to consider the draft Ozone-depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2020.
James Morris
It is a pleasure to serve under your chairmanship, Mr Hollobone. I will take each instrument in turn, starting with the Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020. The statutory instrument is needed to make small but important changes to ensure that our domestic legislation reflects that the United Kingdom is no longer part of the European Union. The SI covers two different subject areas. The first is the regulation of hazardous substances in electrical or electronic equipment, or EEE. The second is the regulation of essential requirements for packaging—the requirements that producers need to fulfil if they place packaging on the market, such as manufacturing and composition requirements.
Hazardous substances in EEE are regulated by the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment Regulations 2012, the so-called RoHS regulations that implement the EU’s RoHS directive. The SI that we are debating transfers to the Secretary of State powers that are currently held by the European Commission under the RoHS directive. After the end of the transition period, the powers will allow the Secretary of State to grant, review, renew or revoke exemptions to the restriction of hazardous substances in electrical and electronic equipment, as specified in the RoHS regulations. Exemptions allow the use of restricted hazardous substances above threshold limits for specific uses, such as solders in medical equipment. The Secretary of State will also be allowed to amend the list of restricted substances and maximum concentration values, and to prescribe detailed rules for complying with maximum concentration values.
Those powers will apply in England, Wales and Scotland, but not in Northern Ireland, because the RoHS directive will continue to apply in Northern Ireland after the end of the transition period, as it is listed in Annex 2 of the Northern Ireland protocol. The changes are important, as we are taking powers back from the European Commission to the UK. The SI will allow the Secretary of State to make important decisions on RoHS, and it also amends the RoHS regulations and the Packaging (Essential Requirements) Regulations 2015. It amends both sets of regulations separately for Great Britain and for Northern Ireland. The amendments to the RoHS regulations for Great Britain introduce key measures to ensure a smooth end to the transition period for business, placing manufactured goods on the GB market. They include transitional provisions for importer labelling in order to provide a 24-month period in which importer details can be provided on accompanying documentation, and a similar transitional provision for the application of the new UK marking, which will replace the European Union’s CE marking.
This instrument ensures that, except for qualifying Northern Ireland goods, the automatic recognition in Great Britain of EEE meeting EU requirements will expire 12 months after the end of the transition period. It amends both the RoHS regulations and the essential requirements for packaging regulations, to make provision for access for qualifying Northern Ireland goods to the GB market. The instrument amends the RoHS regulations and the essential requirements for packaging regulations separately for Northern Ireland. The amendments that apply in Northern Ireland are more limited. They are to reflect the fact that the RoHS directive and the packaging directive will continue to apply in Northern Ireland—although not in the rest of the United Kingdom—by virtue of the Northern Ireland protocol. They will allow the UK to meet its obligations under the Northern Ireland protocol when it comes to packaging and RoHS.
We have ensured that the changes for Northern Ireland are as minimal as possible while also allowing the UK to fulfil its obligations under the Northern Ireland protocol. However, there are some unavoidable costs for businesses as a result of amendments to the RoHS regulations, including familiarisation and new labelling costs. No impact assessment was prepared for this instrument, as any costs to or benefits for businesses, charities and voluntary bodies were predicted to fall below the limit of £5 million in one year.
This instrument is reserved, as it covers specific technical standards and requirements on all businesses in relation to products, the subject matter of which is covered by EU law obligations until the end of the transition period. This is a reserved matter under all three devolution settlements.
This instrument makes small but important changes to ensure that regulations, processes and systems that deal with packaging and RoHS will continue to operate and be enforceable at the end of the transition period. It ensures that the UK fulfils its obligations on packaging and RoHS under the Northern Ireland protocol and, crucially, returns powers from the RoHS directive back to the UK to allow the UK to maintain its high product safety standards.
I now turn my attention to the second instrument for debate—the Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2020. This instrument enables the UK to meet the requirements of the Northern Ireland protocol in relation to restricting the use of ozone-depleting substances, ODS, and fluorinated greenhouse gases, F gases, as required for transition period completion day. That will be done by making changes to existing legislation. The instrument also amends dates to prevent errors of law caused by those dates currently falling before the end of the transition period.
Ozone-depleting substances damage the ozone layer, while F gases are powerful greenhouse gases. The UK is a party to the United Nations Montreal protocol, which places controls on both ODS and F gases. The EU ODS regulation implements the Montreal protocol by restricting ozone-depleting chemicals to certain limited uses where there are no viable alternatives. Registration and quota limit requirements apply to those exempted uses. Imports and exports must also be licensed.
The EU F gas regulation cuts by 79% the use of hydrofluorocarbons, the most common type of F gas, by 2030 and implements other measures to reduce F gas emissions. The HFC phasedown is achieved through allocating quota to producers and importers. It underpins UK and EU compliance with international obligations to reduce HFC use under the Kigali amendment to the Montreal protocol.
The Northern Ireland protocol requires that the EU F gas and ODS regulations remain applicable to and in the United Kingdom in respect of Northern Ireland. This instrument makes necessary amendments to enable the UK to meet the requirements of the protocol. That means establishing quota systems for Great Britain that are separate from the EU systems. Northern Ireland will remain part of the EU systems. Producers or importers will require GB quota to place things on the GB market, with businesses seeking to sell into Northern Ireland needing EU quota.
This instrument introduces provisions to control the movement of F gases and ODS between Great Britain and Northern Ireland. The provisions define that the movement will be deemed as imports or exports for the purposes of F gas and ODS trade. Controlling such trade between Great Britain and Northern Ireland is vital to maintain the integrity of the GB F gas and ODS systems, meet the Northern Ireland protocol requirements and ensure that the UK remains compliant with its international obligations under the Montreal protocol.
This is not about stopping trade. The approach in the instrument has been developed to meet two key principles—first, that we continue to contribute to the UK ambition on climate change through complying with our obligations under the world-renowned Montreal protocol and, secondly, that we impose the most light-touch measures on movements of goods between Northern Ireland and Great Britain that we can, adhering to the Northern Ireland protocol, while still meeting our international obligations.
The previous EU exit SI—the Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2019—as amended by this instrument will transfer powers and functions previously held by European institutions, including the European Commission and the European Environment Agency, to appropriate authorities and regulators in England, Scotland and Wales. The Scottish and Welsh devolved Administrations will have the competence to establish and operate their own ODS and F gas systems, if they choose to in the future. I am pleased to say that all the devolved Administrations have agreed to this instrument.
I also confirm that the Scottish and Welsh devolved Administrations have agreed in principle to the operation of GB-wide ODS and F gas systems. Compliance and enforcement arrangements will remain, as under the current EU regulations, with the Environment Agency and devolved Administration regulators undertaking the same sort of activity as they do at present. We do not expect enforcement costs to increase significantly as the number of companies being regulated will be similar.
The impacts of this instrument are well below the £5 million per annum threshold, which is why no formal impact assessment accompanies it. The Joint Committee on Statutory Instruments considered the instrument and cleared it without comment on 4 November.
Ruth Jones (Newport West) (Lab)
Thank you, Mr Hollobone, and I start by wishing you a belated happy birthday. I welcome the hon. Member for Halesowen and Rowley Regis, and congratulate him on his promotion to Minister, if only for today.
It is good to be with colleagues this afternoon and to have the chance, once again, to scrutinise and unpick more delegated legislation from the Government. I have to say that the way things are happening now, it is beginning to feel like this is Government by statutory instrument and, although I have only been a member of this House for 18 months, I know that is not how things should be done.
We have two SIs before us and I shall speak to each in turn. First, the Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020 refer to legislative functions that are currently held and carried out by the European Union on the restriction of the use of certain hazardous substances in electrical and electronic equipment. The instrument seeks to transfer the functions currently exercised in Europe to the Secretary of State, in relation to England and Wales, and to Scotland, after the end of the transition period following our departure from the European Union, which, as you know, Mr Hollobone, is on 31 December 2020—or, to put it another way, in 44 days’ time.
Her Majesty’s Opposition will not seek a Division on the regulations; I know hon. Members will be disappointed to hear that. I just wish we were not discussing this important transfer of powers on 18 November 2020, to be ready for 44 days’ time, but we have to do so, because we need to be ready for what comes next. We need to ensure that all the necessary steps are taken for what life will be like on 1 January next year and beyond.
For those hon. Members who have listened to me speak in Delegated Legislation Committees before, it will be no surprise that I am going to raise concerns about impact assessments, the language used in them and the language more generally. This statutory instrument makes an important transfer of powers, and the importance of those powers means that I am very concerned about the wording of the explanatory memorandum. I refer hon. Members to paragraph 12 of the explanatory memorandum. The first sentence of 12.1 says,
“there will be an impact on business”.
Paragraph 12.3 then says,
“an Impact Assessment has not been prepared for this instrument because no significant impact on business, charities or voluntary bodies is foreseen”.
I would be grateful if the hon. Member for Halesowen and Rowley Regis squared this circle for us—and for the people who will be affected by the transfer of these powers. There is an impact on business, but there is no impact assessment because no impact is foreseen. Perhaps he could clarify that when he sums up.
I know that Ministers across Whitehall are stretched, and I pay tribute to all the hard-working civil servants in the Department for Environment, Food and Rural Affairs and across Government, but this simply is not good enough from Ministers. For many Opposition Members, it seems odd to identify a difference between “no impact” and “no significant impact”. We need clarity and coherence on this, please, this afternoon.
I have two specific questions for the hon. Gentleman. First, I want him to confirm that the power to amend the list of substances will not be used to weaken environmental protection. This is vital for us as a country and for how we tackle the climate emergency that people across—and outside—the House want us to tackle now.
Secondly, I note that the Department’s response states that it is “the Government’s intention” to carry out a general public consultation; we all know about good intentions, but they are different from delivering real results. Will the hon. Gentleman confirm that a public consultation—including seeking the views of environmental groups—will be carried out when the list of substances is amended? When will it start, and how long will it last? That is vital and we all need answers.
The second statutory instrument, the draft Ozone-Depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2020, deals with a specific policy area that is one of the international obligation exemptions to the Government’s unfettered market access policy. There will be two separate systems in Great Britain and Northern Ireland that require the introduction of controls and checks on the movement of certain gases, substances and equipment across the Irish sea between Northern Ireland and Great Britain. With the potential practical impact on trade between NI and GB, these are issues that I suspect the House will consider with greater urgency in the coming weeks.
Her Majesty’s Opposition will not seek to divide the Committee on this SI either because we are recognise its technical nature and, most important, we are keenly focused on the integrity of the Union and on doing right by the people of Northern Ireland.
The regulations show once again how much we need to get done in the next 43 days. The Opposition are prepared to play our part in ensuring that this country—and by that, I mean Scotland, Wales, England and Northern Ireland—is ready for what happens next. We will hold Ministers to account every single day from now until 31 December and beyond.
James Morris
I thank the hon. Lady for her remarks. She raised three issues in relation to the hazardous substances regulations. On her point about impact assessments, there is a definition of “minimal impact”, which leads to the conclusion that an impact assessment is not required. On her second question about whether the powers to implement the lists will lead to a diminution in environmental protection, my answer is simply no. On the third issue, about public consultation, I will write to her to give her the clarity she requires. I hope that that has addressed some of the questions that she raised.
I trust that the hon. Members understand and accept the need for the instruments. Failure to make these regulations would mean failing to meet the requirements of the Northern Ireland protocol. We would also be unable to control the flow of ozone-depleting substances and fluorinated greenhouse gases that cause so much harm to our planet. The UK would, as a result, be deemed non-compliant with our obligations under the Montreal protocol, where we have traditionally been at the forefront of driving environmental ambition. Domestically, we would jeopardise our legally binding targets under the Climate Change Act 2008 and, ultimately, the aim of achieving a net zero economy.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Hazardous Substances and Packaging (Legislative Functions and Amendment) (EU Exit) Regulations 2020.
DRAFT OZONE-DEPLETING SUBSTANCES AND FLUORINATED GREENHOUSE GASES (AMENMENT ETC.) (EU EXIT) REGULATIONS 2020
Resolved,
That the Committee has considered the draft Ozone-depleting Substances and Fluorinated Greenhouse Gases (Amendment etc.) (EU Exit) Regulations 2020.—(James Morris.)