Financial Services (Implementation of Legislation) Bill [HL]

Baroness Liddell of Coatdyke Excerpts

2nd reading (Hansard): House of Lords
Tuesday 4th December 2018 Lords Chamber

[Baroness Liddell of Coatdyke (Lab)]

My Lords, like other noble Lords, I welcome the introduction of the Bill. It is not the most exciting piece of legislation we will consider in this House, but it is pretty vital in the event of a no-deal exit. Taking up points that have been made by other noble Lords, it also points to the intensity of the negotiations that have been taking place outside the Brexit scenario on future financial services regulation. There is poignancy in it as well because for more than 20 years the British voice in the councils of Europe on financial services legislation has been dominant. We have helped to craft that legislation and regulation over those years, and this legislation points out how critical that is. It also reminds us that we are about to move from being rule makers to rule takers. This is one of the steps along the way. I know that that irritates the Brexiteers, but it is a statement of fact.

I am very conscious that a number of points have been made by other noble Lords. There is one specific question that I would like to ask because some confusion has been caused. I think all of us who are speaking on this Bill have been approached by members of the sustainable investment community. I have a difficulty: the number of pieces of in-flight legislation that they refer to does not match the number of pieces of in-flight legislation that the Minister has referred to in this Bill. Particularly in relation to sustainable investment, there is a reference at point 2.52 in the very helpful policy note that the,

“proposal aims to enhance the transparency and comparability of low carbon benchmarks”.

That comparability is an area where there could be widespread interpretation, and it would be helpful if the Minister could give us some idea of the parameters within which that comparability would take place.

Moving to the last part of the policy document, which refers to the European supervisory authority review and the action that the Government will have to take post exit, I would like to see some indication of the timescale that the UK would be considering in making regulatory changes to allow for the exchange of information and delegation to function smoothly. That is a pretty critical part of the functioning of markets. I would be grateful to have some guidance on this; it would be useful because this is not really covered by the sunset clause in the Bill.

There are a number of points that will no doubt be teased out as we go through Committee, and most of them have been referred to before. I too was a bit confused by the use of the word “similar” in the first clause, conscious as I am that I am sitting beside a former Lord Chancellor. It would be useful to have a much clearer definition of what “similar” actually means.

It is important to get this legislation on the statute book as quickly as possible. I hope it is not needed, but again it causes us to reflect on how significant financial services are. It is regrettable that in the political declaration and indeed in the withdrawal Act we do not have any proper explanation of the nature of the regulatory compromises that will be made, particularly in relation to going from passport into equivalence. A big gap is opening up there. I do not expect the Minister to answer that but it is something that we need to have at the back of our minds as we look at this legislation.