Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019

Debate between Lord Bates and Lord Deben

Tuesday 5th March 2019 Lords Chamber

[Lord Deben]

How can we make sure that the measures we take here in this House and in the other place and the measures taken in Gibraltar are in fact congruent? That is really quite important. Who is responsible for that connection so that we make sure that no part of it falls out of line? As my noble friend has said, mistakes do happen. Perhaps I could be told exactly how this is done.

[Lord Bates]

This happens predominantly through the Treasury. It is engaging with the Government of Gibraltar and of course with the Executive there to ensure that the process goes through. It is run through the Treasury at present, but obviously in careful consultation with the relevant regulators in both entities.

My noble friend asked whether we had consulted Gibraltar on the SIs, which is in part relevant to the previous point. Throughout the EU exit process the UK Government have been committed to engaging with the Government of Gibraltar. On the ministerial level that engagement has been largely structured through the Joint Ministerial Council on Gibraltar-EU negotiations. On contingency preparations, the Government of Gibraltar have indeed received both SIs very positively. There have been discussions at both the ministerial and the official level on the onshoring approach taken in the two SIs.

[Lord Deben]

I have one final point. What would happen if the Gibraltarians did not like what we are doing? Is it really that we are deciding it, they are doing it, and that is it? Alternatively, could they say, “Frankly, we would like it done in a different way”? I think it is quite important to know what the relationship with Gibraltar actually is.

[Lord Bates]

It is a very close relationship. How would Gibraltar react to the deliberations in this House? I hope that it would respect them as being the work of Parliament. However, we also realise the crucial importance of financial services to both entities and therefore we want to ensure that Gibraltarian firms can continue to access UK financial services and that UK firms—

[Lord Deben]

I am so sorry, but I should have declared my interest as the chairman of PIMFA.

[Lord Bates]

I thank my noble friend. Similarly, we want to ensure that UK financial services have access to the Gibraltar market as well.

The noble Baroness, Lady Kramer, commented on the recently signed tax treaty. The UK, Spain and Gibraltar have concluded a treaty to improve tax co-operation between them and secure the protection of their financial interests. The treaty provides rules for resolving tax residency conflicts and administrative co-operation. The UK signed the agreement as the state responsible for Gibraltar’s international relations. Whereas this means that the UK will ratify it in due course, the Government of Gibraltar will take forward all domestic legislation required for it to have effect in Gibraltar.

On the follow-up question the noble Lord, Lord Tunnicliffe, asked, on the status of the SIs in the event of a deal, I say that the two SIs will not be needed during an implementation period. He also asked about automatic recognition of resolution actions. The framework referred to relates to the jurisdiction controls in relation to winding-up proceedings. This will not apply to the recognition of the actions taken to resolve a failing bank without winding it up. No firms will qualify for automatic recognition. I hope that is clearer.

The noble Lord, Lord Tunnicliffe, also asked why we needed the long-term replacement framework. I think we dealt with that. Will the replacement framework be ready for 2020 and what will happen if it is not? Again, I think I dealt with that. The Treasury is working with the UK regulators and the Government of Gibraltar to design a replacement framework for 2020. Its implementation will depend on progress between both Governments on this framework. Crucially, we do not want to create a cliff edge in Gibraltar’s access to the UK in 2020. The Treasury has therefore included a temporary extension framework in the Financial Services (Gibraltar) (Amendment) (EU Exit) Regulations 2019. This will extend market access through a new negative SI by one year at a time from the end of 2020.

The noble Lord, Lord Deben, asked what would happen if the Gibraltarians did not like what we are doing. Gibraltar is content with our onshoring approach to the two SIs. To ensure a mirrored and functioning financial services regime, Gibraltar is onshoring its own financial services legislation in the event of no deal.

With those explanations, I again thank noble Lords who have taken part in this and beg to move these two SIs.

Equivalence Determinations for Financial Services and Miscellaneous Provisions (Amendment etc) (EU Exit) Regulations 2019

Debate between Lord Bates and Lord Deben

Monday 18th February 2019 Lords Chamber

[Lord Deben]

The only suggestion I made was that the noble Lord might not be here in 10 years’ time. That is a very different comment.

[Lord Bates]

Perhaps the noble Lord was not aware that he and I served in the same Government 25 years ago. He was a personal hero of mine because he abolished the hated Cleveland County Council and returned it to the North Riding of Yorkshire, which was greeted with absolute acclamation. However, it was still not enough to get me past the 1997 general election, so I find myself here in your Lordships’ House. Indeed, the noble Lord, Lord Young, was there 40 years ago—so there is form.

My point is that the Treasury is accountable to Parliament. It is possible to question a Treasury Minister here in the House of Lords in the way that noble Lords could not question a Commissioner in the House of Lords, so I do not want us to run down that particular track. Nor do I want to overegg the situation and say that it is perfect. We are having to prudently prepare for a set of circumstances that nobody in this House wants but for which we need to prepare because the industry requires that assurance.

Let me try to deal with some of the specific points in this debate. The noble Baroness, Lady Kramer, asked what third countries will do to declare the UK equivalent. The Treasury and the regulators have been in close contact with third-country authorities, including the United States regulators. We expect to replicate all arrangements with third countries which are based on equivalence. The UK will have grandfathered all existing Commission decisions through the EU withdrawal Act, and there will be retained EU law—the point I referred to.

The noble Lord, Lord Tunnicliffe, asked about a no-deal scenario, and I have dealt with that.

The noble Baroness, Lady Kramer, asked why the negative resolution procedure is considered appropriate for equivalence. We went through this whole area. I will not repeat it, but, if the House will bear with me, it is good that the usual channels are here. As part of the EU withdrawal Act, there was intense discussion and debate about the correct process for considering the large body of regulation that would be coming onshore. A comprehensive system of scrutiny—involving sifting committees, the Joint Committee on Statutory Instruments and the Secondary Legislation Scrutiny Committee—was set out for your Lordships, and it has been working. I am sure that the noble Lord, Lord Adonis, will come back at a later stage to some of the debate we had, which was probably as interesting to me as it was to him as we listened to Sub-Committees A and B. But the reality is that that scrutiny work is going on through your Lordships’ House and is following exactly the process set out in the Act and agreed through the usual channels.

The noble Baroness, Lady Bowles, said that the legislation is hard to follow. The Government are committed to ensuring that the law is transparent and accessible. That is why the National Archives will publish online a collection of documents capturing the full body of EU law as it stands on exit day. It will also gradually incorporate retained direct EU legislation into the Government’s official legislation website, legislation.gov.uk. She also asked whether decisions will be reviewed every three years because of the forthcoming SI. The future Treasury SI deals with making sure that equivalence directions fit into part of the existing FSMA framework. It does not mean decisions will be reviewed every three years.

Further, the noble Baroness asked why the SIs are being undertaken in such a piecemeal way and wondered why changes cannot be assessed holistically. A number of legislative changes will be necessary to ensure that there is a functioning statute book on exit day. HM Treasury has been as open as possible about this legislation and the potential impact, particularly by publishing draft legislation in advance of laying, alongside explanatory policy decisions.

The noble Lord, Lord Sharkey, asked whether we could provide examples of consultation on proposed rule changes. The regulators have undertaken extensive consultations on the proposed changes to their rules and technical standards. However, the powers in the EU withdrawal Act allow them to proceed without consultation, where necessary, to ensure that the necessary regulations are in place for exit day.

Does relying heavily on secondary legislation leave room for departments to push through unpopular or controversial legislation? These are powers granted under scrutiny by the EU withdrawal Act, as I have already explained.

Let me turn to another point raised by the noble Lord, Lord Sharkey, and my noble friend Lord Deben. They asked why we have chosen a 10-year appraisal period. This is not about when we review the legislation; this is a technical issue about the period over which the costs are allocated. We have committed to further analysis and, if the SIs come into effect, we will need to consider what an appropriate time is, but it will be much less than 10 years.

The noble Lord, Lord Sharkey, asked about consulting and whether we would allow more than is quantified in the impact assessment. The limitations set out in the impact assessment would not be overcome by consultation at this stage. Firms need to consider all the changes made by these SIs, alongside the broader changes that occur at the point of exit, which cannot be known in advance.

The noble Baroness, Lady Bowles, asked why we have not mentioned the public in the commentary. Consumers benefit from both competition and financial stability. This instrument will allow the Government to have due regard to both.

The noble Lord, Lord Sharkey, asked why no one has come forward to provide transparency around the costs of Brexit. The impact assessments for these SIs focus solely on their direct impacts; the wider costs of Brexit were covered in the cross-government analysis.

When we talk about the costs of these SIs, which just bring onshore regulations that already exist, has anybody thought for a moment to consider what the costs would be if we did not have them ready by exit day? What would that mean for the financial services industry? It would be cataclysmic. It is absolutely the reason that the noble Lords, Lord Sharkey and Lord Tunnicliffe, were right to say that, while they recognise the need for scrutiny, they also recognise how important it is for the industry that we get these measures through.

I will come back to some of the other issues in later debates on this evening’s SIs.

Brexit: Economic Effects

Debate between Lord Bates and Lord Deben

Wednesday 21st November 2018 Lords Chamber

[Lord Bates]

Both the noble Lord’s party and mine stood on a platform of honouring the people’s vote that took place in 2016. We are now on the brink of an agreement which can remove the uncertainty so that this country can move forward, and that is why we are supporting it.

[Lord Deben (Con)]

Would my noble friend reconsider that answer? After all, we had an election, and then two and half years later we decided that there was a chance for the people to have another vote on that. So merely to say that we have had a vote is not to say that we should never have a vote again. Is not the problem that the deal that has been done puts Britain into a significantly worse position than we are in as a member of the European Union?

[Lord Bates]

No, I do not accept that premise. If that were the case, we would not still be the number one location in Europe for foreign direct investments, or judged by Forbes to be the number one place to do business in 2018, which we are, and our exports would not be rising. The reality is that people want to remove the uncertainty, and to do that, we need to get behind this deal and get it done.

Overseas Development Assistance

Debate between Lord Bates and Lord Deben

Tuesday 4th July 2017 Lords Chamber

[Lord Bates]

I am certainly happy to give that assurance. Of course, it was the multilateral development review that we undertook last year that the EDF scored so well in. Around the world we work in partnership with the EU and through its funds, and I cannot envisage a situation where we could do that effectively in the future without working very closely with the European Union. With regard to the fund itself, decisions on whether we want to contribute or stay out will be made as part of the process of exiting the European Union. Now at least we have a choice.

[Lord Deben (Con)]

Will my noble friend the Minister tell me how much it is going to cost to disentangle ourselves from these arrangements in the European Union? Can I have his undertaking that none of that money will come from our overseas aid budget? If he does not have a figure, perhaps I might point out that it is the habit of this House to want to know the cost before we agree to action.

[Lord Bates]

A number of organisations oversee that important element of the budget. There are the Independent Commission for Aid Impact and the National Audit Office—all these organisations will be scrutinising the amounts of money that go out. In relation to the European Development Fund in particular, which is the focus of the Question, that amount is an annual supplement and therefore it should not be that difficult to make a decision on an annual basis, along with other multilateral partners, about how much we put in.

Immigration Bill

Debate between Lord Bates and Lord Deben

Wednesday 20th January 2016 Lords Chamber

[Lord Bates]

I will of course come to that. I realise that there are some very detailed questions and I am certainly not skipping past them, but I wanted to put on record the Government’s response to the amendments before turning to the matters raised in the debate.

There are some interesting points here, the first of which is that, while this scheme has been rolled out into the private sector, the requirement to prove identity has been in operation in the social sector. It was introduced by the Labour Government in the Immigration and Asylum Act 1999. It provides a duty on local authorities to check that those entering social tenancies have a right to be in the UK. Indeed, it goes further and places a duty on local authorities to notify the Home Office where they come across people who do not have a right to be in the UK. What is new is that that requirement is being applied to the private sector.

On the criticism of the independence of the office of evaluation—a point made by my noble friend Lord Deben and a number of noble Lords—the Home Office Science evaluation had scrutiny of the consultative panel co-chaired by the noble Lord, Lord Best. It might be helpful for the Committee to have on record the members of the landlords consultative panel, co-chaired by James Brokenshire and the noble Lord, Lord Best. The representatives included: the Association of Residential Letting Agents; the UK Association of Letting Agents; the Residential Landlords Association; the National Landlords Association; the Royal Institution of Chartered Surveyors; the Department for Business, Innovation and Skills; the Department for Communities and Local Government; the Equality and Human Rights Commission; the boroughs of Sandwell, Dudley and Walsall; the National Approved Letting Scheme; Birmingham and Wolverhampton city councils; Universities UK; and Crisis.

[Lord Deben]

I did not criticise this as not being an independent group. My point was that the work should go on for longer before it is assessed, perhaps by the same group. It is not a question of complaining about the independence of the group; I fear that there has not been sufficient time to be able to draw the kind of conclusions which have been drawn. I think that is precisely what the noble Lord, Lord Best, indicated—that it would have been better to have had a longer period. All I was suggesting was that if you had a longer period and then had the independent assessment that would be better, given what a serious matter this is.

Identity Cards

Debate between Lord Bates and Lord Deben

Thursday 26th November 2015 Lords Chamber

[Lord Bates]

The noble Lord will be aware that we have had this debate before. The decision that was taken to abolish the national identity register and identity cards, which had been introduced by the previous Labour Government, was done on two grounds: first, on cost, because it cost £85 million to run and nearly £1 billion was required to maintain the register; and secondly, in terms of effectiveness, because the very people whose identity we might want to have would be the last people in the queue to comply with the requirement for the ID card. That is not to say that we are not doing anything about that; we are simply saying that we have a different approach. We have passports and driving licences—84% of the population have passports and over 60% have driving licences—and all people who come from outside the EEA to live in the UK for a period in excess of six months are required to have a biometric permit to do so.

[Lord Deben (Con)]

My Lords, with hindsight, would it not have been better to have corrected the faults in the Labour Party proposals and put them into operation so that now we would have a system which worked? Is it not odd that we are the only country in Europe that thinks that this system without identity cards is somehow superior? Should we not learn from others just occasionally?

[Lord Bates]

Of course we learn from others, and the reality is that we have a system of photographic ID—I have mentioned lots of types, such as biometric passports, but also general passports and driving licences, which we have in this country. At a time when our principal concern is national security, we have said that we choose to spend the investment that would be required to put in place a system of ID on better equipping our security forces and better securing our borders to ensure that we can keep people secure and safe.

Police and Crime Commissioners

Debate between Lord Bates and Lord Deben

Wednesday 3rd June 2015 Lords Chamber

[Lord Bates]

I just mentioned a turnout of 65%, although of course I accept that that turnout occurred in a referendum. The noble Lord will appreciate that particular circumstances arose in the first police and crime commissioner elections, which took place in November. The role is now established. The England and Wales crime surveys found that awareness of police authorities is 7%, but awareness of police and crime commissioners is 63%. I believe that that will be reflected in the turnout next year.

[Lord Deben (Con)]

Does my noble friend accept that this has been a remarkable success and that some of us who were antagonistic to the idea at first have now learnt through our own experience—mine, for example, in Suffolk—that this is a very good way of ensuring that the public have greater control over the part of policing that they should control? Therefore, we should thank the police commissioners for the work that they are doing.

[Lord Bates]

My noble friend is absolutely right and I absolutely agree with him. That is not just the opinion of my noble friend. The Home Affairs Select Committee has said that police and crime commissioners,

“have provided greater clarity of leadership for policing within their areas and are increasingly recognised by the public as accountable for the strategic direction of their police forces”.

That seems a pretty good endorsement.

Counterterrorism Policy: Syria and Iraq

Debate between Lord Bates and Lord Deben

Monday 2nd March 2015 Lords Chamber

[Lord Bates]

The right reverend Prelate raises a very serious and sensitive point. I would say very carefully that whatever your perspective on the crisis in Syria, our recommendation is that you do not travel. There are other international agencies which are doing incredible work in trying to bring peace and protect individuals and particular groups in that area. We should give them our full support without adding further to the difficulties by introducing independent people into that very complex and dangerous theatre of terrorism.

[Lord Deben (Con)]

Does my noble friend accept that there are many people who are caused great pain by some of the comments made in the newspapers, particularly those who have been responsible for the education of some of these young people? Perhaps he heard the headmistress of the school which one famous character attended. Will the Minister do all he can to stop people pointing the finger at those who have done a job, tried to do it as well as possible and are now left in this awful position of being blamed for something that has nothing to do with them and that they could not have prevented?

[Lord Bates]

My noble friend is absolutely right. I am sure that whenever we see a horrific crime committed by an individual, every head teacher wonders if they could have done more. That is in the nature of the educational professionals that we have.

I am afraid that there are some people who have that sadistic, vile, criminal bent within them. That reinforces the fact that what we are talking about here is not any ideological or religious struggle. It is pure and simple criminality—and in the case of that particular individual, murderous criminality. It is a tragedy for the family and people who know them, but we should not blame ourselves for what an individual had responsibility for and should have controlled himself.

EU: Migration

Debate between Lord Bates and Lord Deben

Wednesday 19th November 2014 Lords Chamber

[Lord Bates]

First, my initial Answer was yes not no. It was that we have been engaging with Europe. The European Commission has endorsed this approach. The noble Lord referred to Germany. The German Government are passing legislation through the Bundestag to restrict the benefits of those who come to Germany when they are not genuinely seeking work. It was tested in the European Court of Justice. These are exactly the types of reforms and reviews which we have been pushing, from our side, and which are getting greater support across the other member states of the European Union.

[Lord Deben (Con)]

Does my noble friend agree that tone is very important in these issues? We should show quite clearly how much we benefit from the large number of people from the rest of the European Union working here, and how much the rest of the European Union benefits from people from the United Kingdom going there. If we talked a bit more cheerfully about this—the greatest peacetime achievement that has happened in Europe—perhaps people would be more willing to listen to our comments.

[Lord Bates]

I totally agree with my noble friend about tone. The British people have a reputation for hospitality and tolerance and have welcomed people who are making a positive contribution to our society. However, that of course has its limits and we need to be mindful that there is great concern about unrestricted, uncontrolled immigration into this country and the impact it has upon social cohesion and our public services.

European Arrest Warrant

Debate between Lord Bates and Lord Deben

Wednesday 29th October 2014 Lords Chamber

[Lord Bates]

My Lords, the noble Lord is right to point to the importance of this; 5,000 foreign criminals have been deported since it came into effect in 2009. Of course the desire is to opt back in by 1 December, but this needs to be negotiated and there need to be agreements. Those negotiations are continuing. Her Majesty’s Government’s position is that we want to be there by 1 December. In terms of when the House will have the opportunity to discuss this, discussions are ongoing between the business managers to make time for that to happen before 20 November.

[Lord Deben (Con)]

My Lords, does my noble friend accept that the only people who gain from our non-membership of the European arrest warrant arrangements are fraudsters, child molesters and gangs? Should we not say that this is another example of the excellent reasons why we should be full and really committed members of the European Union?

[Lord Bates]

My noble friend is absolutely right in respect of these measures. To keep a balance, though, let us remember that being part of the European Union is not just about signing up to everything that comes down the track. With regard to justice and home affairs, there were 135 measures in the package, 100 of which we did not feel passed the test regarding our national interest. However, 35 did and those are what we want to rejoin.