Money Market Funds (Amendment) (EU Exit) Regulations 2019

Lord Young of Cookham Excerpts

Monday 25th February 2019 Lords Chamber

[Lord Bates]

That the draft Regulations laid before the House on 24 January be approved.

Relevant document: 15th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A)

[Lord Young of Cookham (Con)]

My Lords, I will speak on behalf of my noble friend. The Treasury has been undertaking a programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying SIs under the EU withdrawal Act to deliver this, and a number of debates on these SIs have already been undertaken here and in another place.

This SI is part of this programme, and has been debated and approved by the other place. The SI will fix deficiencies in UK law on regulations for money market funds to ensure that they continue to operate effectively post exit. The approach taken in this legislation aligns with that of other SIs laid under the EU withdrawal Act, providing continuity by maintaining existing legislation at the point of exit, but amending where necessary to ensure that it works effectively in a no-deal context.

The European regulation on money market funds relates to their establishment, management and marketing. These funds invest in highly liquid instruments—such as Treasury bonds—and provide a short-term, stable cash management function to charities, local government, businesses and other financial institutions. They are predominately used by investors as an alternative to bank deposits. The regulations were introduced as part of the response to the 2008 global financial crash, to preserve the integrity and stability of the EU market, and to ensure that money market funds are a resilient financial instrument. This is achieved by having further rules on prudential requirements, governance and transparency for operators of money market funds.

Money market funds are structured as either an undertaking for collective investment in transferable securities or alternative investment funds. Consequently, they are required to comply with regulations that apply to UCITS or alternative investment funds. The regimes for UCITS and AIF managers have been separately amended to reflect the UK leaving the EU by the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019 and Alternative Investment Fund Managers (Amendment etc.) (EU Exit) Regulations 2019, which were made on Wednesday 20 February.

First, this draft instrument removes references to the European Union which are no longer appropriate, and to EU legislation which will not form part of retained EU law. These references will be replaced, to refer to the UK and to relevant domestic and retained EU legislation. Secondly, in line with the general approach taken in other instruments, this SI will transfer functions within the remit of EU authorities to UK institutions. All functions exercised by the European Commission will be transferred to the Treasury. These relate to creating rules on standards for money market funds, such as their liquidity and quantification of credit risk.

All functions exercised by the European Securities and Markets Authority will be transferred to the FCA. The FCA will become responsible for technical standards on how funds should stress test their funds, and for two operational powers to establish a register and reporting templates for money market funds. The FCA, as the UK’s regulator for investment funds and the current national competent authority for money market funds, has extensive experience in the asset management sector and is therefore the most appropriate domestic institution to take on these functions from ESMA.

As previously stated, money market funds must be structured and regulated as UCITS or AIFs. This instrument makes provision to ensure that EU money market funds are able to use the temporary marketing permissions regime, which lasts for three years, as legislated for in the regulations for collective investment schemes and alternative investment fund managers. Following an assessment by the FCA and submitting a Written Ministerial Statement to both Houses, the Treasury will be able to extend this by a maximum of 12 months at a time. The temporary marketing permissions regime will allow for EEA money market funds which are currently marketed into the UK, and any subsequent money market fund structured as a UCITS sub-fund, to be able to continue to market into the UK as an MMF for up to three years after exit day.

This instrument amends the scope of the regulation to apply to the UK only, with the effect of only allowing the marketing of UK-authorised MMFs, or MMFs managed by UK fund managers. However, additional amendments maintain the eligibility for EEA MMFs with temporary permissions to continue to market in the UK at the end of the temporary marketing permissions regime period, if they gain the required permissions to market as a third-country fund under existing UK domestic frameworks.

Money market funds structured as UCITS will be required to gain authorisation under Section 272 of the FSMA, while for those structured as AIFs, their managers will need to notify under the national private placement regime.

The UK currently has a very small domestic market of money market funds, so these provisions address the cliff-edge risks that could arise as a consequence of defaulting to a UK-only market. This will ensure that UK investors can continue to access their investments and to have a choice of money market funds to use for cash management.

The Treasury has worked closely with the FCA in drafting this instrument. It has also engaged the financial services industry. This has included engagement with the Institutional Money Market Funds Association, which is the main industry body for money market funds. The House should be aware of remarks by its secretary-general, Jane Lowe, who stated:

“We believe the current draft SIs deal adequately with current EU legislation and consider that the dialogue between HM Treasury and industry was helpful to identify and iron out issues that arose”.


On 21 November, the Treasury published the instrument in draft along with an explanatory policy note to maximise transparency to Parliament and industry.

To summarise, the Government believe that this SI is needed both to ensure that the regulatory regime for money market funds and their operators works effectively, if the UK leaves the EU without a deal or an implementation period, and to ensure continuity for the UK investors they serve. I hope that noble Lords will join me in supporting this instrument. I beg to move.

[Lord Sharkey (LD)]

My Lords, I was grateful for the clarity of the Explanatory Memorandum and the impact assessment for this SI. I understand that the changes are necessary for the proper continuation in business of UK MMFs in a no-deal scenario. I also understand the importance of the temporary marketing permissions regime in allowing continued UK access for existing EEA MMFs, and I note the £250 billion of UK investment in these funds.

I also note that, as set out in paragraph 157 of the consolidated impact assessment,

“this SI transfers the European Commission powers to make delegated acts and implementing acts to HM Treasury, as a power to make regulations”.

This refers, I think, to Regulation 18 of the SI, which states:

“Any power to make regulations conferred on the Treasury by this Regulation is exercisable by statutory instrument … Such regulations may … (a) contain incidental, supplemental, consequential and transitional provision; and (b) make different provision for different purposes”.


It also states that such regulations will all follow the negative procedure. I was not sure of the purpose of the phrase,

“make different provision for different purposes”,

or to what extent it extends the Treasury’s latitude in drawing up these SIs. I would be grateful if the Minister could explain why this additional power is necessary and whether its scope is as unlimited as it might seem at first sight. I would also be grateful if the Minister could explain the use of the negative procedure for the SIs generated by the power. Is there not a case for using the affirmative procedure to allow Parliament more rigorous scrutiny in this obviously critical area of our financial services industry?

--- Later in debate ---

Having said all that, I noticed the standard format: references are changed appropriately; scope is changed appropriately; functions are allocated appropriately; and then there is the old favourite of a temporary marketing permissions regime of three years and as many 12 months as the Treasury feels it needs. However, when you have read all the way through these things, the fundamental issue is that the provisions are asymmetric; they do nothing to allow UK firms to trade in the EU, which will be one of the many economically negative things that are coming out of this exercise.

[Lord Young of Cookham]

I am grateful to all noble Lords who have taken part in this short debate and hope that there is no substantive objection to the powers which are proposed in this statutory instrument. I will try to deal with the questions that were raised by noble Lords.

The noble Lord, Lord Sharkey, asked why there is an additional power to make regulations. The power to make delegated regulations simply transfers to the Treasury the power in the EU regulation, which lies with the Commission, to make technical standards such as specifying credit quality assessment criteria. As these are basically technical standards, we believe that the negative procedure is appropriate. I may stand to be corrected, but I do not think that any of the committees that scrutinise legislation in this House have suggested otherwise.

Both the noble Baroness, Lady Kramer, and the noble Lord, Lord Adonis, raised the question of removing the legal obligation to share information. I understand the concern, but I want to reassure both of them that this will not preclude UK supervisors from sharing information with EU authorities where necessary. I take the point that it is important that there is a good cross-flow of information between the UK and regulators in the EU, and there is already a good domestic framework for co-operation on information sharing with countries outside. We already have that, and the legislation allows for that. If you look at the Financial Services and Markets Act 2000 and the associate secondary legislation, all the necessary powers already exist for co-operation and information sharing with countries outside the UK, which will of course include the EU when we leave.

The noble Lord, Lord Adonis, asked about the impact assessment. The costs include a one-off cost for firms examining and understanding the instrument, estimated at £7,200, which will be shared between the 21 funds regulated under the MMFR in the UK.

Finally, the noble Lord, Lord Tunnicliffe, raised the point about reciprocity—I am sorry that he has had another bad day getting on top of these SIs. Of course, we cannot legislate here to make EU countries reciprocate what we are doing to them, but a series of bilateral discussions is under way to ensure that, in the unlikely event of no deal, essential relationships are preserved. I hope that I have answered all the issues raised by noble Lords.

[Lord Sharkey]

Before the Minister sits down, I may have expressed myself badly when talking about the negative instruments. The instrument we are discussing gives the Treasury the power subsequently to make other statutory instruments—that is partly what it does—and my question was about why all those subsequent negative instruments should come under the negative procedure. The Minister responded by talking about the sifting committees, but those committees will not get sight of those because of course they do not yet exist, and when they do, the sifting committees almost certainly will not. So that does not quite address the question I was hoping to put.

I was also not entirely certain about the answer to the point about making,

“different provision for different purposes”.

I am not quite sure I understood exactly what scope that gave the Treasury in drawing up a statutory instrument. However, if the Minister chooses to write to explain, I would be grateful.

[Lord Young of Cookham]

The Minister might indeed prefer to write. I think that it simply transfers existing powers which rest with the Commission to the Treasury, without changing the fundamentals.

On the sifting committee, I think that I am right in saying that wherever the sifting committee has recommended that statutory instruments under the EU withdrawal Act should be affirmative rather negative, the Government have agreed. I hope that that provides some reassurance to the noble Lord.

Motion agreed.

Subordinate Legislation: Transparency and Accountability

Lord Young of Cookham Excerpts

Thursday 21st February 2019 Lords Chamber

[Lord Lexden]

To ask Her Majesty’s Government, further to their response to the report of the Joint Committee on Statutory Instruments Transparency and Accountability in Subordinate Legislation, published on 12 June 2018, what additional consideration they have given to the conclusions and recommendations in the report.

[Lord Young of Cookham (Con)]

My Lords, the Government agree with the report’s main conclusions and continue to take steps to ensure that statutory instruments respect parliamentary processes and conventions, are drafted to a high standard and remain accessible to anyone at any time. The committee made one specific recommendation on the free issue procedure, and the Leader of the House of Commons continues to liaise with the National Archives to take that forward.

[Lord Lexden (Con)]

My Lords, diverting briefly from my campaign for justice for Sir Edward Heath, I put down this Question to draw attention to the work of the Joint Committee on Statutory Instruments, of which I am a member, and to the expertise of our quite excellent lawyers, who go through every instrument line by line—indeed, word by word. The committee has been increasingly concerned recently about the number of drafting mistakes being made by departments. Will my noble friend pursue that issue? In the report referred to in the Question, stress is laid on the importance of avoiding delays in publishing instruments and laying them before Parliament. Will Ministers impress on departments the need to ensure that delays do not occur?

[Lord Young of Cookham]

I pay tribute to my noble friend, those who with him work on the JCSI and the lawyers for their important if unglamorous work in scrutinising subordinate legislation, not least because their work rate has had to increase substantially due to the increased flow of SIs.

On corrections and errors, the Government have laid more than 1,500 SIs in the Session to date, not all related to Brexit. As of a recent report, the committee has for one reason or another reported on 136 of them. In nearly three-quarters of those cases, the Government either made a correction, provided further information or gave an undertaking to do so. On delays, of the 582 SIs considered by the committee since its report in June last year, only one has been reported for an unjustified delay and only one has been reported for an unjustified breach of the 21-day rule. Clearly, we hope to improve on both performances. More resources have been given to departments to improve their performance. I note that in its interim report on the current Session the committee states that,

“the overall percentage of errors in SIs has decreased”.

We are working hard to maintain progress.

[Lord Rowlands (Lab)]

My Lords, it has been a privilege to have served on this committee for a number of years; indeed, at various times I have chaired the committee and I was very much involved in the preparation of this report. As the Minister said, scrutinising statutory instruments can sometimes feel a rather remote, distant, especially technical thing to do, but one must never lose sight of the fact that a statutory instrument can seriously influence or affect a citizen’s rights or duties, so it is particularly important that statutory instruments are accessible. In our report we make specific recommendations to make sure that statutory instruments and the relevant documents are available and accessible to individual citizens. Paragraph 4.9 says:

“Accessibility to legislation is … of obvious importance for the maintenance of the rule of law”.


I hope that the Minister will impress upon the department the significance and importance of making these instruments and relevant documents accessible to citizens.

[Lord Young of Cookham]

I agree with that section of the report that deals with accessibility. Given their increasing availability on the internet, we hope that statutory instruments are more accessible than they were when they were available only in hard copy. We are in touch with the National Archives, which has responsibility for putting these SIs online, and we have taken on board the one specific recommendation in the report about making sure that those who originally had access to a document that was subsequently changed have access to the change without having to make special efforts to find it. I endorse the words of the noble Lord about the importance of SIs: that is why the JCSI and the Secondary Legislation Scrutiny Committee have a key role to play.

[Lord Sharkey (LD)]

My Lords, we see too many skeleton Bills. The Healthcare (International Arrangements) Bill is the latest example and one of the very worst. These Bills force us to use secondary legislation scrutiny procedures for what should properly be in primary legislation and subject to amendment. Then there is the flood of Brexit SIs, many laid without proper impact assessments or consultations. We debate but we cannot amend and we are unwilling to reject. We have in fact rejected only seven SIs in the last half-century and this does not lend itself to effective scrutiny. Does the Minister agree that we need a thorough review, both of the use of skeleton Bills and of our procedures for dealing with SIs?

[Lord Young of Cookham]

The noble Lord’s question goes slightly broader than the narrow Question about statutory instruments’ transparency and accountability. On his first point, it is a matter for the DPRRC to draw attention to primary legislation where, in its view, too many powers are being subjected to subordinate legislation. The House, as it knows, can amend legislation as it goes through, and the Government have indeed amended legislation in many cases where the House has expressed the view that too much has been delegated. The particular Bill the noble Lord refers to is being debated later today. On his other question, about a wholesale review of statutory instruments, that goes slightly broader than this Question and at the end of the day it is a matter for the House and not the Government whether it wants to change the way it scrutinises legislation.

[Lord Judge (CB)]

My Lords, the Minister was present when I suggested on Monday that it was something of a disgrace that it is 40 years—1979—since the House of Commons last rejected a statutory instrument. Can the Minister be persuaded to ask the Post Office to issue a commemorative stamp? That way, we will either remember the process and revitalise it or accept that it has been consigned to the dustbin of history.

[Lord Young of Cookham]

I am grateful to the noble and learned Lord. I was present in the House of Commons on that historic date but I cannot remember which side I was on, because I cannot remember whether it was before or after the general election in 1979. The noble and learned Lord’s suggestion of a commemorative stamp is a good one, but it might be subject to a statutory instrument.

[Baroness Smith of Basildon (Lab)]

My Lords, I add my appreciation of the Joint Committee for the work it does, which is hugely valuable, particularly when we have so many statutory instruments coming forward. However, the noble Lord and the committee rightly made much of avoiding delay, and I make a plea about accuracy. One of the problems with SIs, understandably, is that they cannot be amended. If, in the Government’s haste to get so many through in such a short time, they are not accurate, as my noble friend Lord Rowlands said, that has enormous consequences. Can the Minister consider—I do not know whether he knows the answer to this—how many days there are between an SI being published in draft form and its being debated? That is when there is an opportunity to pick up any inaccuracies. Does he think that sometimes, they come through a little more quickly than one would anticipate is necessary to allow proper scrutiny prior to their being tabled?

[Lord Young of Cookham]

Affirmative resolutions cannot come into effect until they have been debated in both Houses, while negative ones should be laid in draft 10 days before they are made and 21 days before their coming into force. Those 10 days are to give the committee time to recommend a change from a negative to an affirmative resolution. In the 48 cases where it has made that recommendation, the Government have agreed. On errors, as I said in response to an earlier question, the overall percentage of errors in SIs has decreased and we are working hard to maintain progress.

Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019

Lord Young of Cookham Excerpts

Monday 18th February 2019 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Regulations laid before the House on 5, 13 and 17 December 2018 be approved. Considered in Grand Committee on 4 February.

Motions agreed.

Representation of the People (Election Expenses Exclusion) (Amendment) Order 2019

Lord Young of Cookham Excerpts

Thursday 14th February 2019 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Order laid before the House on 17 December 2018 be approved.

[Lord Young of Cookham (Con)]

My Lords, the election expenses exclusion order brought forward today aims to make significant improvements to the electoral framework. The order proposes that expenses that are reasonably attributable to a candidate’s disability, and which are reasonably incurred, are excluded from a candidate’s electoral spending limits.

Examples of such expenses include, but are not limited to, British Sign Language interpretation for hearing-impaired candidates, the transcription of campaign material into Braille for visually impaired candidates and specialist equipment. This order will also exclude expenses funded from grants provided through the Government’s interim EnAble Fund for Elected Office from electoral spending limits. This £250,000 interim fund will support disabled candidates and help cover disability-related expenses that people might face when seeking elected office, such as those I have listed.

The Government are committed to ensuring that the diversity of the United Kingdom is sufficiently represented in public office. Around one in five of the UK population has a disability, but disabled people remain insufficiently represented in our Parliaments, Assemblies and councils. The proposed changes will help to create a level playing field between candidates with disabilities and candidates without disabilities, enhancing equality of opportunity.

Alongside the proposals put forward today, I will remind the House of the other work being taken on to increase the number of disabled people in public office. This includes the review by my noble friend Lord Holmes of Richmond into opening public appointments to disabled people. We welcome his report’s recommendations, which suggest improvements across each of the key points of the appointment process, from the data the Government hold to attracting applicants, the application process and interviews and assessments. We are confident that the recommendations will enable the Government to understand better the issue, improve the disability data we hold for public appointees and pinpoint effective approaches to increasing the proportion of disabled public appointees. We are currently assessing how these recommendations might be implemented.

The order brought before the House today has a wide remit of application. It will apply UK-wide to all UK parliamentary elections, including by-elections. In England, the order will also apply to local government elections, Mayor of London elections, London Assembly elections, mayoral elections and combined authority mayoral elections. In Northern Ireland, it will apply to Northern Ireland Assembly elections. I can tell noble Lords that the Government plan to lay a second statutory instrument this year to widen the application of this provision to police and crime commissioner elections across England and Wales.

I will turn briefly to the detail of the proposed changes. The election expenses exclusion order excludes expenses that are reasonably attributable to a candidate’s disability and which are reasonably incurred, by substituting a new paragraph 7(a) in Part 2 of Schedule 4A to the Representation of the People Act 1983. Part 2 of Schedule 4A to that Act sets out a list of matters that are “excluded” from being “election expenses” and therefore are not taken into account when calculating a candidate’s electoral spending limits. This ensures parity with electoral spending limits for non-party campaigners. Schedule 8A to the Political Parties, Elections and Referendums Act 2000 excludes reasonable expenses incurred that are reasonably attributable to an individual’s disability from electoral spending limits of non-party campaigners.

I would like to allay concerns about whether the change will require candidates to disclose any disability. It will not. There will be no legal obligation for candidates to report their disability-related expenses. Candidates can declare these expenses if they wish so to do. I would also like to allay concerns that this exclusion could be misused by individuals who want to manipulate their electoral spending limits. The provisions are clear: this exclusion can be used only for expenses that are reasonably incurred and reasonably attributable to a candidate’s disability. Any breach of the spending rules for candidates can be referred to the police and prosecutors for investigation. The order will not give candidates with a disability an advantage. Its purpose is to create a level playing field in respect of electoral spending limits, so that candidates with a disability are not disadvantaged by that disability in standing for election.

We have consulted on the elections expenses exclusion order with the Electoral Commission, the Welsh Government, the Scottish Government and the Northern Ireland Office. There has been cross-government collaboration between the Cabinet Office and the Government Equalities Office. All the consulted stakeholders have been supportive of the proposals. We have also kept the Parliamentary Parties Panel informed of the position with the order.

On a final point, I would like to highlight that it is important that the order is in place as soon as possible so that it can apply at the local government elections in England on 2 May. This order will therefore come into force on the day after the day on which it is made. I commend this order to the House.

[Lord Shipley (LD)]

I thank the Minister for explaining this order and I want to record that I agree with it. It is entirely appropriate that any disability-related expenses in elections should be exempt from spending limits, on principle. That is because it helps disabled candidates to stand for election on equal terms with others. I noted the Minister’s comments about some objections that may have been raised on some of the details—but none is more important than the overall principle of equality of opportunity.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I am very happy to give the order my full support. I was glad that the noble Lord mentioned the political parties panel, because I was going to ask him about it. There is no mention of political parties at all in the consultation referred to in the Explanatory Memorandum. I know that the noble Lord mentioned it in his contribution, because I was going to ask him about it. The bodies listed in the Explanatory Memorandum do not pay election expenses and do not fill out election returns. I am glad that he covered that point. It is important that we keep the political parties informed on all these matters. They can often inform the Government’s thinking in a positive and helpful way. Since the noble Lord answered my question, that is fine. I am very happy to support the order.

[Lord Young of Cookham]

My Lords, I have had a remarkably easy time—oh, I am sorry.

[Lord Campbell-Savours (Lab)]

I will be very brief, so do not worry. Paragraph 14.3 of the Explanatory Memorandum refers to the EnAble Fund for Elected Office having,

“robust checks and balances in place to ensure that grants are allocated to eligible applicants”.

It then sets out the process to ensure that happens, because, obviously, public money is being expended. However, in the case we are discussing here, I will quote paragraph 14.1:

“There are no plans to monitor or review the statutory instrument … monitoring or reviewing of the statutory instrument is difficult to implement and unnecessary”.


The Minister referred in his contribution to “reasonably incurred” and “reasonably attributable”. Whenever I see “reasonably” I always think of the courts. What happens if there is a challenge on the basis that an expense has not been “reasonably incurred” or “reasonably attributable” and therefore should have been declared as part of the base limit? What happens in the event that that is breached?

[Lord Young of Cookham]

My Lords, I obviously spoke too soon when I said I had had a reasonably easy ride. I am grateful to noble Lords for their broad support for the measure. On the issues raised by the noble Lord, Lord Campbell-Savours, as I said, we are extending an exemption that already applies to non-party campaigners to those standing for public office. I am not aware that the existing exemption for non-party campaigners has given rise to the difficulties he presents, but he asked about the precautions we are taking to make sure that this is not abused. The EnAble Fund for Elected Office has robust checks and balances in place. There is an initial triage process—a meeting with the applicant, in person where possible. During these checks, applicants will be asked to confirm that they have a disability that necessitates reasonable adjustments to enable them to stand for election. In addition, applicants intending to stand for election will undergo a verification process to ensure that their intention to stand is genuine.

A risk confronts anybody who stands for elected office and misuses the expenses regime, as we discussed yesterday: they stand to be disqualified if they have not incurred expenditure reasonably. Those definitions, as I think I said, are already on the statute book in relation to non-party campaigners. I do not think that there has been any difficulty.

Motion agreed.

Local Authorities (Mayoral Elections) (England and Wales) (Amendment) (England) Regulations 2019

Lord Young of Cookham Excerpts

Thursday 14th February 2019 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Regulations laid before the House on 12 December 2018 be approved.

Motion agreed.

Combined Authorities (Mayoral Elections) (Amendment) Order 2019

Lord Young of Cookham Excerpts

Thursday 14th February 2019 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Order laid before the House on 12 December 2018 be approved.

[Lord Young of Cookham (Con)]

My Lords, in moving this order I shall also speak to the draft Local Authorities (Mayoral Elections) (England and Wales) (Amendment) (England) Regulations 2019.

The order and regulations make changes to the rules governing the conduct of elections of combined authority mayors and local mayors in England. The instruments also make important changes to the electoral framework in relation to candidates standing at these polls. They remove the existing requirement that each candidate’s home address must be published during the election process and be included on the ballot paper at elections of combined authority mayors and local mayors. These changes are designed to enhance the security of candidates standing at these polls and of their families, and to deliver commitments made by the Government in response to recommendations from the Committee on Standards in Public Life.

I should explain that these are two of four instruments that we have brought forward on this issue. In December 2018, we made two statutory instruments that implement the recommendation made by the CSPL in relation to candidates at local government and parish council elections. Electoral law provides that these statutory instruments are made under the negative resolution procedure, and they are therefore not required to be debated in Parliament before being made. This reflects the requirement that the rules for local government and parish council elections are to follow those for UK parliamentary elections. These orders are laid under the affirmative procedure.

Since 2010, candidates at UK parliamentary elections have been able to choose for their home address not to be made public at these polls. The changes we are making in the four instruments that relate to local and parish council elections and to combined authority and local mayoral elections will bring the procedure at these polls into line with that at UK parliamentary elections.

By way of background, in December 2017, the CSPL published its report, Intimidation in Public Life: A Review by the Committee on Standards in Public Life. It made a package of recommendations on ways to enhance the security of those wanting to take part in public life and to reduce the risk of intimidation. This included the recommendation that:

“The Government should bring forward legislation to remove the requirement for candidates standing as local councillors to have their home addresses published on the ballot paper”.


In responding to the CSPL report, the Government accepted this recommendation in relation to local councillors. Indeed, they went further in their response and stated that the practice of removing the requirement for home addresses to be published on the ballot paper should be applied equally to all those standing for election to public office, and should apply to those standing at any level of local authority elections, including for mayoral positions. We are therefore going beyond the CSPL’s report in taking action on this important issue.

As I indicated, in December last year, we made two statutory instruments that implement the recommendation made by the CSPL in relation to candidates at local government and parish council elections. The two instruments we are considering today will apply the changes to the elections of combined authority mayors and local mayors.

The CSPL heard from a number of individuals that the requirement for candidates standing for election as local councillors to publish their home address on the ballot paper has been a significant factor in enabling intimidatory behaviour, and would put people off standing as a council candidate due to that risk of intimidation. A number of former local election candidates stated that the disclosure of their home address enabled intimidatory behaviour to escalate when they subsequently stood as a parliamentary candidate. These personal accounts reinforce the need to take action to address this issue.

I turn briefly to the detail of the proposed changes. Currently, candidates standing at combined authority and local mayoral elections are required to give their home address, which will appear on certain election documents and the ballot paper. The only exception to these existing requirements is for persons standing at combined authority mayoral elections where the mayor will have police and crime commissioner functions. These candidates may already require that their home address is not made public. Under the proposed changes, candidates at any combined authority mayoral election and at all local mayoral elections will not be required to provide their home address on the nomination form or consent to nomination form. In future, candidates at these polls will be required to complete a home address form and to include their home address on it. Candidates will be able to choose that their home address is not made public and so not included on the ballot paper or other electoral documents.

We recognise that we need to strike a balance between transparency of the electoral process and the safety of candidates running for public office. We think it is important for electors to know whether a candidate lives locally and whether they have a link to the area in which they are standing for election. For this reason, under the proposed changes, if a candidate chooses not to make their home address public, they must state the name of the local authority area within which they live; this will appear on the ballot paper, the statement of persons nominated and the notice of poll for the election, instead of the candidate’s home address. Again, we are mindful of the need to ensure that there is openness in the electoral process. We are therefore providing that the home address forms will be available for inspection by certain authorised people, including other candidates standing at the poll.

We have consulted on the two mayoral instruments with the Electoral Commission, the Association of Electoral Administrators and the Society of Local Authority Chief Executives. We have also kept the Parliamentary Parties Panel—which is made up of representatives of the main political parties—informed of the position of the two instruments. There is broad support among stakeholders for the proposed changes.

On a final point, I highlight that it is important that the instruments are in place as soon as possible so that they can apply at the local government elections in England on 2 May. These instruments will therefore come into force on the day after they are made. The instruments presented before the House today make sensible and fair changes to the electoral framework. I commend them to the House.

[Lord Shipley (LD)]

My Lords, I thank the Minister for his explanation of these orders. I am supportive of them. They bring the regulations into line with the election of police and crime commissioners and of Members of Parliament. They also respond to the recommendations of the Committee on Standards in Public Life. It will of course be a voluntary matter and, where an individual candidate makes a decision not to show their home address on the ballot paper, it is right that the local authority area they live in is shown on the ballot paper to assist voters.

It is a finely balanced issue but a decision to allow candidates for the mayoral election not to publish their home address seems justified by the evidence, as long as a candidate whose home address is not shown has their local authority area published on the ballot paper, the statement of persons nominated and the notice of poll. I emphasise to the Minister that my comments relate to mayoral elections, which cover large geographical areas. We will need to look more closely at the precise regulations for local councillors, who have a much more local focus, but that is for another occasion.

--- Later in debate ---

[Lord Young of Cookham]

I am grateful to all noble Lords who have taken part in this short debate and for their support for the Motions we are bringing forward.

As I said, the background is a recommendation from the Committee on Standards in Public Life. We have already extended this facility to a large number of people who are standing for election, and the relatively modest Motions before us simply extend that facility on a voluntary basis to those standing for combined authority and local mayoral elections. As a number of noble Lords said, we do not want people to be discouraged from putting themselves forward for public office due to fear of intimidation; there has been some evidence of publicly elected people being subjected to intimidation. That is why we are doing it. However, I understand the point made in this debate that it is a matter of regret that we need to do so.

On the specific questions, as far as I am aware, we have no plans to revisit the voting procedures at local or parish council elections. The noble Lord, Lord Campbell-Savours, suggested that before you stand for public office there should be some pre-election financial declaration. The Committee on Standards in Public Life might look at that in the first instance; it seems to fall within its remit, rather than being something for the Government to initiate.

On the final point raised by the noble Lord, Lord Kennedy, it is for individual local authorities to decide what information they put on their websites about individual councillors. I hope that they would consult local councillors before putting their home address and telephone number on a website, and that they would not do that automatically. However, I imagine this is a matter best decided by local authorities, and I am sure they will have taken on board the point the noble Lord made. With those brief points, I commend these instruments to the House.

Motion agreed.

Election Expenditure

Lord Young of Cookham Excerpts

Wednesday 13th February 2019 Lords Chamber

[Lord Rennard]

To ask Her Majesty’s Government what assessment they have made of the merits of providing greater clarity in legislation about what constitutes (1) constituency expenditure on behalf of a candidate and (2) national expenditure on behalf of a party, following the verdict of R v Mackinlay, Gray and Little.

[Lord Young of Cookham (Con)]

My Lords, the Government believe that the law governing elections should be clear and operate effectively. We are working closely with the Electoral Commission on new codes of practice for election expenses. These will be informed by the issues that arose in the recent case, including the question that was referred to the Supreme Court. In the first instance, this will provide greater clarity for those taking part in our democratic process.

[Lord Rennard (LD)]

Since the judgments of the Supreme Court and the Southwark Crown Court confirmed that many of the common practices in recent general elections were illegal, saying, “We did not know that it was against the law to classify expenditure targeted at an individual constituency as national expenditure”—thereby trying to avoid the constituency expenditure limits—will no longer be a strong defence in court. In those talks with the Electoral Commission and the parties, will the Minister seek not just clarity in the law and improved guidance but to uphold properly the principle of a level playing field in constituency campaigning, so that it is not possible for one party to seek to buy a seat in Parliament?

[Lord Young of Cookham]

I entirely agree with the principle that the noble Lord has just enunciated. I was looking at the Corrupt and Illegal Practices Prevention Act 1883, which enshrined the principle to which he referred. The preamble states that,

“if its provisions are honestly carried out, the length of a man’s purse will not, as now, be such an important factor”.

I am afraid that a woman’s purse did not get a mention, it being 1883. The text continued,

“and the way will be opened for many men of talent, with small means, to take part in the government of the country, who have been hitherto deterred from seeking a seat in the House of Commons by the great expense which a contest entails”.

That principle is timeless, even if the language may not be.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, does the Minister agree that while guidance, codes and statutory instruments may deliver some of the change we need, it is only through primary legislation that we will get the electoral law fit for purpose?

[Lord Young of Cookham]

That is why, in my Answer, I said that in the first instance, the code of practice will provide greater clarity for those taking part in our democratic process. At the meeting attended by the noble Lord and six other noble Lords yesterday, the point was made that there may be some inconsistency in the primary legislation, which may need addressing. What I have said does not preclude a more radical look at primary legislation, as the noble Lord suggested.

[Baroness O’Neill of Bengarve (CB)]

My Lords, does the Minister agree that the primary threat to the integrity of elections in this country is not because of failure by the political parties but because of anonymous online targeting of our fellow citizens, whereby people cannot trace the source of funds or what is happening? What do the Government plan to do about that?

[Lord Young of Cookham]

The noble Baroness raises a valid point. The Electoral Commission produced a report last year, Digital Campaigning: Increasing Transparency for Voters, which had recommendations along the lines suggested by the noble Baroness. The DCMS Select Committee in another place is looking at exactly this issue, and when we have its report, we will see whether fresh legislation is needed in order to provide greater transparency on who is paying for what.

[Lord Hayward (Con)]

First, I declare a personal interest, in that I know well all three individuals named in the Question. I follow the noble Lord, Lord Rennard, in seeking clarification, particularly in relation to the upcoming local elections on 2 May. There is uncertainty for both candidates and agents. Will the Electoral Commission and other bodies urgently seek to provide as much clarification as possible, so that, where possible, that element of uncertainty is removed?

[Lord Young of Cookham]

My noble friend raises a good point. The recent guidance by the Electoral Commission was issued before we had the judgment of the Southwark court. Certainly, the commission might see whether that guidance might be updated to help candidates and agents in the light of the judgment of the Supreme Court and the Southwark case.

[Lord Stunell (LD)]

My Lords, does the Minister agree that it is vital to retain a robustly independent Electoral Commission with political input but with a majority of independent members, and that we never return to the bad old days when the rules were decided by the party which formed the Government in the House of Commons?

[Lord Young of Cookham]

Yes. Before we had the Electoral Commission many of its responsibilities were discharged by the Home Office, which was, of course, run by political animals; namely, Ministers. It enhances confidence in the democratic process to have an independent commission, such as the Electoral Commission, in charge of the rules. We have no intention of departing from the principles which underpin the Electoral Commission. I think I am right in saying, as the Opposition spokesman at the time, that my party supported its establishment.

[Lord Leigh of Hurley (Con)]

Despite my noble friend’s last answer, does he think that the Electoral Commission provides good value for money, with a budget of £17 million a year and 200 staff, which is more than most of the organisations it regulates?

[Lord Young of Cookham]

It is within my recollection that at the beginning of the coalition Government, when all public bodies were put under scrutiny, the Electoral Commission was asked to reduce its core expenditure by 30% in real terms—a very substantial target—so it had to make economies. I hope that, like all public bodies, it will seek efficiencies in every way possible. I note from its most recent annual report and accounts that it underspent by just over £1 million last year, and that money was returned to the taxpayer.

Money Laundering and Transfer of Funds (Information) (Amendment) (EU Exit) Regulations 2018

Lord Young of Cookham Excerpts

Thursday 7th February 2019 Lords Chamber

Moved by

[Lord Young of Cookham]

That the draft Regulations laid before the House on 29 November, 6 December and 13 December 2018 be approved.

Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee (Sub-Committee A). Considered in Grand Committee on 23 January

[Lord Tunnicliffe (Lab)]

May I just refer back to our previous exchange on this matter? When we last discussed credit rating agencies, I asked what would happen if there was a deal and I got a somewhat amorphous answer. Can the Minister be clearer than he was in his original answer on this point? I have asked this question in every SI debate that I have attended and I have received a slightly different answer from each Minister concerned, so it would be good to know whether the Government have a unified position on this.

Looking at the Explanatory Memorandum, which was discussed in Grand Committee, there is the registration process and the three bullet points. The first two points were that there would be a conversion regime with automatic registration, and that the registration regime would be available to new legal entities. The third, however, which nobody seemed able to understand, was that the automatic certification process would enable certified CRAs established outside the EU to notify the FCA of their intention to extend the certifications to the UK. Like the conversion regime, these notifications must be made before exit day. The Minister’s answer, which I checked in Hansard, was again a little woolly.

Finally, there is the whole issue of how the law relates to the staff of credit rating agencies. We have improved the control of financial services and banks by having a senior management regime. I understand that that regime does not extend to credit rating agencies. The Minister went on to say that other regulations do, but I believe that those other regulations have the same sort of weak reservations that were there in 2008 and allowed the shambles in the money market. It seems somewhat deficient, because what happened in that period, as we know, and the reason nobody was prosecuted, is that everyone said, “It’s not me, guv”. There was not a clear single point of responsibility for the various exceptions to be made.

[Lord Young of Cookham (Con)]

I am grateful to the noble Lord, who has maintained his reputation for holding the Government to account on statutory instruments. I understand exactly why he sought to raise these issues. He referred to my comment that we would “switch off” the SIs in the event of a deal. It is a phrase that appears in some of the briefing for Ministers, so I hope it was not the wrong thing to say. To help the noble Lord, I will set out in more detail the process of switching off.

As we set out in the White Paper on the EU withdrawal agreement Bill, that Bill will amend the European Union (Withdrawal) Act 2018 so that the conversion of EU law into retained EU law takes place at the end of the implementation period instead of on exit day. While the UK remains subject to EU law, and before the conversion of EU law into UK retained law, there is no requirement for most instruments relating to our exit from the EU to be enforced. I come to the question the noble Lord asked: the intention, therefore, is that the EU withdrawal agreement Bill will contain provision to delay all relevant SIs—including these—that enter into force on exit day until the end of the implementation period. The Bill will also ensure that Ministers can revoke or amend the SIs as appropriate so that they deal effectively with any deficiencies arising from the end of the implementation period. Some provisions may remain in effect, such as powers that allow us to prepare for the end of the implementation period.

The noble Lord raised two other issues in the Moses Room on 23 January. One question was on the process of CRAs registering before exit day. The CRA SI includes an automatic conversion regime for UK-based CRAs with an existing ESMA registration, and a temporary registration regime, or TRR, for CRAs establishing a new legal entity in the UK. To enter the conversion regime, a CRA will simply need to notify the FCA 20 days prior to exit day. A CRA that meets the criteria will enter the TRR if it has submitted an advanced application that has not yet been determined to the FCA prior to exit day. Basically, these regimes will help to ensure there are no gaps between the UK leaving the EU and UK-based CRAs not being registered with the FCA. The FCA will be provided with powers to start the preparatory work for registering UK CRAs prior to exit day.

The third issue the noble Lord raised is another that he touched on in his intervention in the Moses Room. He asked about the senior management structure of credit rating agencies and whether individuals could be held responsible. As I said then, it is a good question. The senior managers and certification regime does not currently apply to credit rating agencies. One of the reasons is that they do not actually handle customers’ money, which banks and other agencies do. Regulation 22 of the SI applies Section 400 of the FSMA, which provides that if an offence committed was,

“with the consent or connivance of an officer”,

of the body corporate, or due to neglect on its part, the individual as well as the corporate is guilty of an offence.

[Lord Tunnicliffe]

Part of that answer jarred a little with me then and jars now on repetition—the part that says it is because they do not handle customers’ money. Looking back at the disaster of 2008, one has to recognise that the credit rating agencies were a substantial part of that disaster. The fact they were giving very high ratings to essentially junk stock was one of the issues that compounded the crisis. As a minimum, I would be grateful if the Minister would take this issue back to the Treasury and recognise that it might be an unfortunate hole in the legislation.

[Lord Young of Cookham]

I understand why the noble Lord is pressing me on this. As I said, the senior managers and certification regime does not currently apply to credit rating agencies. The noble Lord makes a good point; I hope he is now satisfied with some of the answers I have given. In answer to his last intervention, although the regime does not currently apply to CRAs, we will of course take his suggestion on board and see whether in future that might be amended. I beg to move.

[Lord Tunnicliffe]

I thank the noble Lord for his courteous replies and his help.

Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019

Lord Young of Cookham Excerpts

Monday 4th February 2019 Grand Committee

Moved by

[Lord Young of Cookham]

That the Grand Committee do consider the Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019

Motion agreed.

Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019

Lord Young of Cookham Excerpts

Monday 4th February 2019 Grand Committee

Moved by

[Lord Young of Cookham]

That the Grand Committee do consider the Collective Investment Schemes (Amendment etc.) (EU Exit) Regulations 2019

[Lord Young of Cookham (Con)]

My Lords, as this instrument has been grouped, I will speak also to the Long-term Investment Funds (Amendment) (EU Exit) Regulations 2019. The Treasury has been undertaking a programme of legislation to ensure that if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying SIs under the European Union (Withdrawal) Act to deliver this, and a number of debates on these SIs have already been undertaken here and in another place. The SIs being debated today are part of this programme and have been debated and approved in the other place.

These SIs will fix deficiencies in UK law on investment funds to ensure they continue to operate effectively post exit. The approach taken in this legislation aligns with that of other SIs being laid under the EU withdrawal Act, providing continuity by maintaining existing legislation at the point of exit but amending where necessary to ensure that it works effectively in a no-deal context.

Turning to the substance of these instruments, noble Lords may remember previous debates relating to alternative investment funds and their subcategories on 16 January. Those instruments, along with these being debated today, will ensure there is a functioning legislative and regulatory system for investment funds in the UK. The first instrument focuses specifically on the regulation of Undertakings for Collective Investments in Transferable Securities, commonly known as UCITS, which are funds aimed at retail investors. The second instrument relates to long-term investment funds, a further subcategory of alternative investment funds that promote long-term investment, such as in infrastructure and small and medium-sized enterprises. In a no-deal scenario, the UK would be outside the EEA and the EU’s legal, supervisory and financial regulatory framework. Retained EU and domestic law relating to the regulation of UCITS and long-term investment funds needs to be updated to reflect this.

I will begin with the collective investment schemes regulations. First, this instrument removes references to the Union and to EU legislation that will no longer have legal effect, replacing them where appropriate with references to the UK and UK legislation. It removes obligations to co-operate with EU authorities and defunct references to the EEA passporting system. However, as set out in FSMA and other legislation, it maintains the ability for co-operation between authorities which may be in the interests of both the UK and the EEA.

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, we have allowed my noble friend Lady Bowles to go off to her committee today so I am afraid that there is somebody on these Benches with a far less-detailed knowledge of the intricacies of the relevant pieces of legislation. That may be of some relief but she will be back on future occasions so the respite is only temporary.

We have no objection to these two SIs, although I would like to probe around them a little. Clearly the UK Government should make this move because, frankly, EEA UCITS with a presence here in London suddenly fleeing because of a lack of temporary permissions would be a hole beneath the waterline for the future of fund management in London. The measure is absolutely necessary. The vast majority of those funds have said that if they had to go back and apply again as third countries for third-country permissions to keep their existing funds in place, they would prefer to exit. That is the situation with which we are dealing so the Government’s move is appropriate.

However, noble Lords will be aware that a great deal of money has already fled London. Two or three weeks ago, EY provided a report setting the number of assets to have left the City, primarily funds, at around £800 billion. With the latest Barclays announcement, that takes the number to about £1 trillion, which is a reasonable amount of assets under management to have left because of Brexit. So that everybody understands, I say that this is not about people being disloyal or unpatriotic. One of the companies involved, Somerset Capital Management—co-founded by Jacob Rees-Mogg—domiciled two recently launched funds in Dublin, apparently because of the demands of various clients. Clearly, a great deal of the movement out of London has been client-led.

That is a problem because conglomeration is a very powerful factor in driving this industry forward. Losing something like £1 trillion of funds under management and finding that many players are playing double-handed, with a presence in both London and somewhere else—typically in Dublin but perhaps in other places in the EU 27—puts into doubt a future never before doubted: that London would dominate in this area. Did I understand correctly from the Minister—and do I understand correctly from reading the instrument—that the transitional arrangements described are simply to provide continuity for existing London-domiciled EEA UCITS? Has there been any assessment of the likelihood of new funds to open choosing London for their headquarters? Has there been any assessment of whether the limited reach of the regulations means that, if we leave on 29 March, funds to open later in the year are far less likely to be London-domiciled because they will have to apply through a third-country process? I would be interested to understand that.

In a sense, that leads me on to the impact statement, which is peculiar. The Minister is absolutely right that the statement is recent: I think it went online on Friday and was printed only today. The costs are defined in the summary as “Unknown: likely significant”. But the description which follows that brief table says that the only really quantifiable costs on businesses are,

“marginal compared to the … costs arising from the UK leaving the EU”—

thank goodness, as this is one tiny area—and that they,

“mainly consist of familiarisation costs”.

Has there been any attempt in that estimate of significance to estimate the changing pattern of investment for new funds that will follow, because of the limited nature of this new SI? From a cost perspective, I do not know whether that has been included in the numbers.

The benefits are described as “significant” but, again, we have no numbers around any of that. I suppose that one person’s significant differs from another’s but it seems that it is significant compared to having nothing to protect us from a cliff edge. I can certainly understand that that is significant but it seems peculiar, frankly, to suggest it as a benefit. The status quo is clearly the benefit; there are no costs and there is no reduction in the future location of funds in the UK. A benefit that basically avoids the damage of a cliff edge seems a terribly odd description.

Finally, I saw the humour on the Minister’s face, and I share it, at the second SI, which deals with long-term investment funds. Since, as I understand it, this is a continuity and rollover SI and there are no funds, can he help me with the logic of why we are bothering with it? I do not mind it being on the statute book but it seems slightly redundant to provide for the continuity of nothing. I thought that the Minister might help me in this context with these issues, but we will of course oppose neither instrument.

[Lord Young of Cookham]

I think I can help the noble Baroness on that. There are no UK-based funds of this nature but there are some based in the EU—about five—that market into the UK. Those are the ones that will be able to apply for a temporary passport.

[Baroness Kramer]

I find that very helpful and I thank the Minister for saying that.

--- Later in debate ---

[Lord Young of Cookham]

I am grateful to all noble Lords who have taken part in this debate for their broad support for the statutory instrument before us. The noble Baroness, Lady Kramer, implied that she was not well informed on financial matters, but we all know that not to be the case. I agree with what she said about the TPRs. These are sensible measures, not least for seeking to keep the City of London’s pre-eminent position in financial markets at the forefront of our priorities.

The noble Baroness mentioned the migration of funds. I, too, saw the EY report. The £800 billion figure was an estimation of firms’ stated intentions rather than of actual assets transferred. The report states that the estimate is a “modest” sum when compared to the total assets of the UK banking sector, which stand at almost £8 trillion. None the less, it underlines the case for taking forward measures such as this to prevent any unnecessary migration of funds out of the UK. She also asked whether new funds could be established. The answer is that where there is an umbrella fund with lots of sub-funds, an existing umbrella fund with a sub-fund approved under the TPR can then get another sub-fund approved subsequently because it shares the same governance structure as the original one, so it has already been validated. Otherwise, a brand new one would have to start from scratch, in the way that the noble Baroness implied.

The noble Baroness asked about the impact assessment, She is quite right that it was published recently. These impact assessments focus narrowly on the changes that these SIs make and how businesses will need to respond. They do not deal with the broader economic impact of leaving the EU. The whole point of these SIs is to try, wherever possible, to maintain stability and continuity and minimise the amount of turbulence for firms involved. An impact assessment for the EU withdrawal Act deals with the impact of the parent Act; the Government have also published analysis of the potential economic impact of a range of scenarios, including no deal. These SIs mitigate the impact of leaving the EU without a deal. As the noble Baroness said, if they were not in place, there would be substantially more disruption and turbulence for the industry as a whole.

I think I have dealt with temporary marketing permissions. New EEA UCITS that are not sub-funds with temporary permissions, as I have just described, will have to use the third-country regime to market into the UK after exit day. The instrument does not change the process for authorising UK UCITS; that remains the same. There should be minimal change for the domestic industry.

The noble Lord, Lord Tunnicliffe, reiterated his opposition to no deal, which I understand and which he has made absolutely clear on earlier occasions. The best way to avoid no deal is to agree a deal; as I think he knows, the Prime Minister wants to meet others to identify what would be required to secure the backing of the House.

I think I answered the question from the noble Baroness, Lady Kramer, about removing LTIFs, in that some market and want to go on doing so. It will allow for EEA funds that market into the UK before exit day to continue to do so through the temporary marketing permission regime. The noble Lord, Lord Tunnicliffe, is right that it can be renewed at the end of three years. The TMPR can be extended only by the Treasury, pursuant to an FCA assessment on the effect of extending, or not extending, on financial markets, funds in the TMPR and the FCA’s objectives. It must also go through the House.

I was asked, if reciprocity is so important that they can continue marketing into this country, what about the reverse? The answer is that we can legislate only in relation to EEA funds and managers that passport into the UK. We cannot, through our own unilateral action, oblige them to do the same to us. That is why we are seeking to agree a deep and special partnership with the EU, as well as an implementation period—important for both of us—so we can have this reciprocity.

[Baroness Kramer]

On reciprocity, we know that some temporary permissions are now being provided by the EU. For example, the London Clearing House has been given 12 months. Does the Minister anticipate temporary permissions in this area? Some guidance would be extremely helpful for the industry.

[Lord Young of Cookham]

The noble Baroness makes a valid point. The answer may become available before I sit down. I agree that it would be of great value to firms based in this country if they could continue marketing into the EU in the event of no deal. I have just been handed the answer to an earlier question, which I have already replied to off the cuff. There may be some more in-flight refuelling.

On the response of industry to what we are doing, I draw the Committee’s attention to the remarks of Richard Withers, the head of government relations for Vanguard in Europe—one of the world’s largest asset management firms. He said that the collective investment scheme regulation that the Committee is debating now is a well-considered and well-drafted piece of secondary legislation, which removes possible disruptions to the UK public’s long-term investment and pension savings activity while also ensuring that the UK remains an attractive and pre-eminent target market into which global fund management companies distribute their products.

On the last point, it looks as if I may not be able to give a response to the very good question aimed at what representations are now being made by the Government or City institutions to encourage the EU and the relevant authorities there to do to us what we are in the process of doing to them. If I have not got the information by the time we reach the end of the next statutory instrument, I will write to the noble Baroness, Lady Kramer. I beg to move.

Motion agreed.