Draft Payment Accounts (Amendment) (EU Exit) Regulations 2018

Alison Thewliss Excerpts

Wednesday 19th December 2018 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Mr Rosindell. I agree with many of the comments by the hon. Member for Oxford East; I will not reiterate them all. To pick up a point that was made earlier, yes, we need to do this. Late in the day though it is, we need to be prepared for the worst, because it seems the worst is coming.

I have a few concerns about the SI. It mentions that power to enforce compliance will be moved to the FCA. I have asked other Ministers in other Committees whether the FCA has the capacity to do that. If we say it has to but it does not have the capacity, clearly there will be a huge gap in our financial system, which we cannot afford.

I also note that there are issues with the cross-border opening of accounts. The explanatory memorandum states at paragraph 2.14 that the SI

“removes the requirements for PSPs to facilitate the cross-border opening of accounts”,

and at paragraph 2.17 that

“it will be at the discretion of the nine designated credit institutions whether to offer non-sterling services to customers of a payment account with basic features, and they can continue to charge a reasonable fee for those services.”

Will the Minister say a little more about how the cross-border opening of accounts will work in the event of a no-deal Brexit? What will happen to people who have existing accounts?

I declare a slight interest—my parents have an account in France. Will that account continue to function? Will they be allowed to make transactions? Will arrangements be put in place for the millions of people with accounts across Europe, and will those arrangements be reciprocal? If we do something at this end, we cannot guarantee that individual EU member states will not make different decisions. We may have 27 different approaches as a result of what we do here, and the Minister needs to tell us a wee bit more about what discussions have been had about that.

It seems clear to me that people will get less of a service. They will also get less protection, for the reasons the hon. Member for Oxford East mentioned to do with advice agencies and everything else. How will people continue with their business or personal banking in the event of their bank accounts being closed with two months’ notice? Will they be able to get another bank account, or will the door be firmly closed to them? How do they go about restarting all the transactions that happened through their old account, if they have no certainty that the new account will be good in the future?

As I have noted previously in SI Committees, under the Government’s hostile environment, many non-EU nationals in this country have been prevented from having bank accounts to make it as difficult as possible for them to live here. I have just come from the Chamber, where the Home Secretary made a statement about immigration that suggested to me that European economic area nationals in this country will be treated in pretty much the same despicable way as non-EEA nationals. What assurances can the Minister give us that the draft regulations will not be used as part of a hostile environment for EU nationals?

It would be good to have clarity about the number of people affected by the draft regulations. What research has been done on exactly how many EU nationals hold bank accounts in the UK and how many UK nationals hold bank accounts in EU countries? We need to know that to know how many people will be impacted. As the hon. Member for Oxford East said, we have not seen an impact assessment. We really ought to have one.

I note finally that the European Commission seems to have been trolling the UK Government today. It tweeted earlier that it is making cross-border payments in euros across the EU easier and cheaper, which is more of a future than the UK is willing to offer its own citizens and citizens of EU countries.

--- Later in debate ---

[Robert Jenrick]

The hon. Lady is absolutely right, and I will come on to that as my final comment. First, I will answer what I think was the final comment from the hon. Member for Glasgow Central, in respect of potential discrimination against EU nationals resident in the UK. What she suggests is not the case under this statutory instrument. Any resident of the United Kingdom who is legally resident in the United Kingdom will have access to a basic bank account, just as they would if they were living elsewhere in the EU.

[Alison Thewliss]

This is the very point that I was making, though. The issue is the “legally resident” part. I have many non-EU national constituents who end up in dispute with the Home Office, and who could fall foul of being not seen to be legally resident. The Government are now throwing EU nationals into that pot as well, and there is every risk that they could be not legally resident in the eyes of the bank or in the eyes of the Home Office. That is the problem with this situation.

[Robert Jenrick]

With respect, the hon. Lady is not correct. The position under this statutory instrument will be exactly the same as the position today. Anyone legally resident in an EU country and anyone legally resident in the United Kingdom after exit day will have access to a basic bank account, so nobody will be disadvantaged as a result of the SI. The Treasury is working very carefully to ensure, for example, that bank accounts are available to those who are homeless and to ex-offenders as they leave prison. The Government are working carefully with difficult and vulnerable groups to ensure that they have basic bank accounts, but people must be legally resident in the UK. It goes without saying that we cannot legislate for those people who are illegal. We have to work on the premise that this will apply only to those who are legally resident in the UK, just as the existing EU rules do.

The hon. Member for Oxford East asked about the impact assessment. We have prepared an impact assessment, as she would expect, and we hope to publish it shortly. The impact assessment is with the Regulatory Policy Committee for consideration, along with a series of other statutory instruments. Together, they form the second tranche of statutory instruments coming from the Treasury. This is the first one, as I understand it, from that tranche that has come before the House. We will publish the assessment once the committee’s opinion has been received. We have tried to ensure that impact assessments have completed all the usual processes in time to be published before debates, but that has not always been possible, for the reasons that the hon. Lady helpfully gave. The sheer quantity of statutory instruments coming forward is placing pressure not just on the civil service, but on the Regulatory Policy Committee, which is a relatively small organisation. These statutory instruments are being prepared at pace, to ensure that we have a robust stand-alone regime in place before March 2019.

This statutory instrument is needed to ensure that consumers in the UK continue to benefit from the regulation of the payment account market, and that the legislation functions appropriately if the UK leaves the EU without a deal or an implementation period. I hope that the Committee has found this afternoon’s sitting informative and will join me in supporting the regulations.

Question put and agreed to.