Draft Financial Services (Miscellaneous) (Amendment) (EU Exit) (No. 2) Regulations 2019

Lord Hanson of Flint Excerpts

Wednesday 22nd May 2019 General Committees

[David Hanson (Delyn) (Lab)]

Before the Minister says “finally”, will he clarify one point in the explanatory memorandum? Paragraph 7.6 states that

“If the UK were to leave the EU without a deal, the UK would be outside the EU’s framework for financial services. The UK’s position in relation to the EU would be determined by the default Member State and EU rules that apply to third countries at the relevant time. The European Commission has confirmed that this would be the case.”

What does that actually mean in practice?

[John Glen]

That would depend on the prevailing circumstances at the time. I cannot give the right hon. Gentleman an accurate depiction of what the rules will be, because we are not in that situation at the moment.

[David Hanson]

The current Prime Minister—it is quarter to 3, and I think she is still in post—has indicated that she does not want a no-deal scenario. The next Prime Minister, whoever he or she may be, may well run the clock down until 31 October, when there would be a no-deal scenario. Before the Minister sits down, will he clarify what paragraph 7.6 of the explanatory memorandum means in practice if a no-deal scenario comes to pass?

[John Glen]

Like any Minister at any point in time, I can speak only for the Government I represent at this moment in time. The assumption behind the right hon. Gentleman’s question is one that I cannot take on board, because that is a hypothetical scenario that I am not, at the moment, privileged to answer.

[David Hanson]

rose—

[John Glen]

I am very happy to give way.

[David Hanson]

If the assumption is hypothetical, why is paragraph 7.6 in the explanatory memorandum?

[John Glen]

As has been indicated throughout the process, the explanatory memorandums set out the situation in the event of a no deal. The right hon. Gentleman wants me to explain where we will be at a certain point in time, but I am not able to answer him at this point.

Finally, during the debate on this instrument in the other place, Lord Young committed the Treasury to reviewing the explanatory memorandum for this instrument. Although the original was factually correct and followed the guidance issued to Government Departments for the drafting of EU exit instrument explanatory memorandums, I accept that it could have provided a clearer and more accessible explanation of the provisions in the instrument, which is why I submitted a revised version of the explanatory memorandum to Parliament on Thursday 16 May.

As I explained in my opening remarks, it was not essential for the additional measures and corrections, including this instrument, to be in law by the original proposed exit day of 29 March. That is why the instrument was not considered earlier by the Committee. Now that the article 50 process has been extended by six months, we can ensure that the provisions are in place and that the UK’s regulatory regime will continue to be prepared for withdrawal from the EU in all scenarios. I hope that colleagues will join me in supporting the regulations, which I commend to the Committee.